[Federal Register Volume 59, Number 166 (Monday, August 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20497]


[[Page Unknown]]

[Federal Register: August 29, 1994]


_______________________________________________________________________

Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 70




Operating Permits Program Rule Revisions; Proposed Rule
ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[FRL-5053-2]

 
Operating Permits Program Rule Revisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is today proposing a number of revisions to the 
operating permits rule mandated by title V of the Clean Air Act (Act) 
as amended in 1990. That rule, codified in part 70 of chapter I of 
title 40 of the Code of Federal Regulations, was originally promulgated 
on July 21, 1992 (57 FR 32250). Part 70 requires each State to 
establish and administer a program for issuing to each covered source 
in the State an operating permit. Part 70 also sets forth the minimum 
elements of any State or local agency operating permits program. 
Today's notice proposes revisions to several of part 70's provisions 
establishing these elements. Most of the proposed revisions relate to 
those provisions that define when and how a permit must be revised to 
reflect changes at a permitted source. In addition, today's notice 
proposes numerous minor changes to part 70 to clarify its scope or 
effect or address issues that have surfaced in the course of its 
implementation. It also provides clarification of some regulatory 
provisions that do not require revision.

DATES: Comments on the proposed regulatory changes must be received by 
November 28, 1994. The EPA is unlikely to be able to extend the public 
comment period. The EPA will hold a public hearing at 9:00 a.m. (EDT) 
on October 19, 1994. Requests to present oral testimony must be 
received on or before October 5, 1994.

ADDRESSES: Comments must be mailed (in duplicate if possible) to: EPA 
Air Docket (LE-131), Attn: Docket No. A-93-50, room M-1500, Waterside 
Mall, 401 M Street SW, Washington, DC 20460. The public hearing will be 
held in the Waterside Mall auditorium at the EPA's Headquarters Office 
in Washington, DC.
    Docket: Supporting information used in developing the proposed 
regulatory revisions is contained in Docket No. A-93-50, at the 
preceeding address. This docket is available for public inspection and 
copying between 8:30 a.m. and 3:30 p.m. Monday through Friday. A 
reasonable fee may be charged for copying.

FOR FURTHER INFORMATION CONTACT: Michael Trutna (telephone 919/541-
5345), mail drop 15, United States Environmental Protection Agency, 
Office of Air Quality Planning and Standards, Air Quality Management 
Division, Research Triangle Park, North Carolina 27711.

SUPPLEMENTARY INFORMATION:

Public Comments

    If possible, comments should be sent in both paper and computerized 
form. Two paper copies of each set of comments are requested. Comments 
generated on computer should also be sent on an IBM-compatible, 3\1/2\ 
inch diskette and clearly labeled. Comments should refer to specific 
page numbers and regulatory section numbers whenever possible.

Table of Contents

    The contents of today's preamble are in the following format:

I. Introduction

II. Background

A. Basic Statutory Requirements
B. Rule Promulgation and Litigation
C. Settlement Negotiations and Resulting Proposals for Rule Changes 
and Clarifications
D. Program Implementation and Resulting Proposed Revisions

III. Proposed Revisions of the Flexibility Provisions

A. Overview
B. Off-Permit Provisions
C. Operational Flexibility Provisions
D. Other Elements of the Rule Providing Operational Flexibility
E. Permit Revisions
F. General Permits

IV. Other Changes and Clarifications

A. Section 70.2--Definitions
B. Section 70.3--Applicability
C. Section 70.4--State Program Submittals and Transition
D. Section 70.5--Permit Applications
E. Section 70.6--Permit Content
F. Section 70.7--Permit Issuance, Renewal, Reopenings, and Revisions
G. Section 70.8--Permit Review by EPA and Affected States
H. Section 70.9--Fee Determination and Certification
I. Section 70.10--Federal Oversight and Sanctions
J. Section 70.11--Requirements for Enforcement Authority

V. Decision-Making Flow Charts

A. Flow Chart for Changes Subject to Major NSR
B. Flow Chart for Changes Subject to Minor NSR
C. Flow Chart for Section 112(g) Modifications

VI. Administrative Requirements

A. Public Hearing
B. Docket
C. Office of Management and Budget (OMB) Review
D. Regulatory Flexibility Act Compliance
E. Paperwork Reduction Act

I. Introduction

    The provisions of title V of the Act and the implementing part 70 
regulations are far-reaching in both scope and effect. By the terms of 
title V and part 70, every State must establish an operating permits 
program under which every major source of air pollution must obtain and 
abide by a permit that includes all of the requirements applicable to 
it under the Act. The operating permits program's potential 
consequences for air pollution control and for sources' ability to meet 
changing market demands have made the process of developing and 
implementing a program complex and controversial. Indeed, nearly 20 
entities, including State and local governments, environmental groups, 
and industry associations, petitioned for judicial review of the part 
70 regulations. Today's proposed revisions are the result of EPA's 
continuing efforts to ensure that part 70 is effective and workable. 
Many of the revisions stem from the Agency's discussions with the State 
and local agency, environmental, and industry group petitioners. Other 
revisions grow out of EPA and State and local agency experience in 
implementing part 70.
    As required by the Act, many State and local agencies have already 
developed operating permits programs in accordance with the current 
part 70 and submitted the programs to EPA for approval. Others are well 
along in their efforts to develop and submit programs. The EPA has 
considered these circumstances in deciding whether and how to revise 
part 70. The Agency believes the revisions proposed today are necessary 
for the legal and policy reasons explained below. At the same time, EPA 
wants to minimize any disruption caused by these revisions. The Agency 
is thus proposing that State and local program approvals be governed by 
the version of part 70 in effect at the time of a program's submittal, 
except that programs submitted within 6 months after the publication 
date of the part 70 revisions will be judged by whichever version of 
part 70 the permitting authority chooses.
    In light of ongoing discussions with petitioners in the part 70 
litigation, EPA expects to propose several additional revisions to part 
70 in the near future. The EPA is proposing revisions today in part 
because of agreements reached with petitioners and in part because 
several of the revisions are important to better program 
implementation. In addition, most State and local agencies are likely 
to need program revisions to correct the deficiencies identified by EPA 
in granting their programs interim approval. The Agency wishes to avoid 
requiring permitting authorities to engage unnecessarily in multiple 
rounds of program revision. As a result, EPA is proposing that 
permitting authorities be required to revise their programs in a time 
frame that would allow permitting authorities options to combine 
rulemakings where possible.

II. Background

A. Basic Statutory Requirements

    Title V, added by the 1990 amendments to the Act, requires the 
establishment of an operating permits program in every State for 
stationary sources of air pollution. The purpose of the program is to 
improve the enforceability, and thus the effectiveness, of the Act's 
requirements by issuing to every covered source a permit that lists all 
of the requirements applicable to the source under the Act and that 
includes monitoring provisions sufficient to determine compliance with 
those requirements.
    Title V directs EPA to issue regulations setting forth the minimum 
elements of an operating permits program (section 502(a)). It further 
directs every State to submit by November 1993 an operating permits 
program meeting those minimum elements to EPA for approval (section 
502(d)(1)). The EPA has 1 year to approve or disapprove State or local 
agency program submissions (section 502(d)(1)). Once EPA has approved a 
State or local agency's program, the covered sources within that 
agency's jurisdiction have 1 year to submit permit applications to the 
permitting authority (section 503(c)) unless the permitting authority 
establishes an earlier date. Within the first 3 years of the program, 
the permitting authority must act on all applications submitted in the 
first year of the program (section 503(c)). Before the permitting 
authority may issue a permit, the public must have an opportunity to 
comment on the draft permit (section 502(b)(6)), and EPA must have an 
opportunity to object to the proposed permit if it does not comply with 
the Act's requirements (section 505(b)).1 Once the permitting 
authority issues a source its part 70 permit, the source may not 
violate any requirement of its permit or operate except in compliance 
with it (section 502(a)).
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    \1\If EPA objects to issuance of a permit, the permitting 
authority may not issue the permit unless it is revised to meet the 
objection. If the permit has already been issued by the time the 
permitting authority receives an objection by EPA, the permit must 
be revised and reissued to meet the objection.
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B. Rule Promulgation and Litigation

    On July 21, 1992, the part 70 operating permits regulations were 
published in the Federal Register. Nearly 20 entities filed 12 
petitions for review of the part 70 regulations with the U.S. Court of 
Appeals for the District of Columbia Circuit. Petitioners included 8 
State and local permitting authorities (Maine, Vermont, Connecticut, 
New York, New Jersey, Pennsylvania, and two California air quality 
control districts, South Coast and Mojave Desert); three national 
environmental groups (Natural Resources Defense Council, Sierra Club 
Legal Defense Fund, and Environmental Defense Fund); and industry 
umbrella groups, trade associations, and individual corporations (Clean 
Air Implementation Project, Chemical Manufacturers Association, 
American Petroleum Institute, American Forest and Paper Association, 
American Mining Congress, Alabama Power and other utilities, and Eli 
Lilly and Company). Many of the petitioners intervened in one another's 
lawsuits and several other entities intervened as well (e.g., Motor 
Vehicle Manufacturers Association, Synthetic Organic Chemical 
Manufacturers Association, and Pharmaceutical Manufacturers 
Association). The petitions were consolidated into one suit, Clean Air 
Implementation Project v. EPA, No. 92-1303.
    Taken together, the petitions raised over 60 issues for judicial 
review. Approximately one-third of the issues related to the provisions 
of part 70 that had been most contentious during the rulemaking, i.e., 
those that determine when and how a source must revise its permit to 
account for changes at the source that could affect emissions. Other 
major issues concerned part 70's provisions regarding the deferral of 
the permitting requirement for minor sources; an emergency defense for 
violation of permit terms; general permits; compliance plans and 
schedules; the designation of State-only requirements included in part 
70 permits as not federally enforceable; and the inclusion in part 70 
permits of monitoring terms sufficient to ensure that applicable 
requirements included in the permit are practicably enforceable.

C. Settlement Negotiations and Resulting Proposals for Rule Changes and 
Clarifications

    After the petitions were filed, EPA and the litigants explored the 
prospect of settling some or all of the issues raised, and over the 
past year have engaged in active and ongoing settlement negotiations. 
The Agency and the litigants early on identified approximately 10 
issues that were the result of misunderstandings of the relevant 
regulatory provisions. In an effort to resolve those issues, EPA has 
decided to provide appropriate clarifications. Today's notice provides 
those clarifications, either in the preamble alone or together with 
minor revisions to the regulatory language.
    The EPA and the relevant litigants also addressed the issue of the 
appropriate treatment of fugitive emissions in making major source 
determinations. The current rule expressly provides that in determining 
whether a source is major for purposes of part C (prevention of 
significant air quality deterioration) or part D (nonattainment) of 
title I of the Act, the source's fugitive emissions are to be counted 
if the source is in a source category subject to any standard under 
section 111 (providing for new source performance standards (NSPS)) or 
section 112 (providing for emissions standards to control hazardous air 
pollutants (HAP's)) of the Act. For the reasons subsequently set forth 
in this notice, the Agency today generally proposes to revise part 70 
to no longer designate sources in source categories subject to a 
section 111 or 112 standard promulgated after August 7, 1980 as sources 
for which fugitive emissions must be counted for purposes of 
determining major source status under part C or part D of title I of 
the Act. In addition, today's notice clarifies that fugitive emissions 
of HAP's must be counted for purposes of determining major source 
status under section 112 of the Act.
    As previously noted, nearly one-third of the issues raised by the 
petitioners pertain to the so-called ``flexibility'' provisions of part 
70, i.e., those provisions that determine when and how a source must 
revise its permit to account for a change at its facility. They were 
and remain the most controversial provisions of part 70. Most of the 
issues in this category were raised by State and local agency and/or 
environmental group petitioners. These petitioners were primarily 
concerned that the flexibility provisions are vague, fail to provide 
for public participation, or inadequately provide for State or local 
permitting authority review. Industry petitioners also raised several 
issues with respect to the flexibility provisions, alleging generally 
that the Agency lacked authority or justification for several of the 
related requirements imposed on industry.
    Although settlement negotiations usually involve only the party or 
parties raising the particular issue being discussed, industry 
petitioners requested that they be allowed to participate in 
negotiations of the flexibility related issues raised by State and 
local agency and environmental group petitioners. In view of the 
importance of those issues to industry's ability to make changes to 
meet market demands, EPA and the other petitioners agreed that all 
litigants should be involved in the relevant discussions. Accordingly, 
over a 9-month period, EPA conducted a series of negotiating sessions 
that involved all of the litigants.
    The litigants represented a broad spectrum of the interests with a 
stake in the operating permits regulations. While State and local 
petitioners were not representative of all permitting authorities, they 
sought a rule that would allow State and local agencies to fashion 
programs that achieve air quality benefits at a minimum of cost and 
disruption to existing pollution control programs. Environmentalists 
sought a rule that provided an opportunity for public participation in 
permitting decisions, not only to augment citizens' role in air quality 
control, but to ensure the integrity of the permitting process. 
Industry petitioners represented nearly all of the major industry 
sectors affected by the rule; only small business was not represented 
at all. For its part, industry sought a rule that allowed sources to 
make changes expeditiously, so that they could respond to changing 
market conditions in a timely manner.
    The multilateral settlement discussions fostered a common 
understanding of the different stakeholders' interests in the permits 
regulations and a constructive effort to fashion permit flexibility 
provisions that would strike an appropriate balance between those 
interests. A broad consensus was achieved on the basic structure of 
revised flexibility provisions, i.e., a clear definition of those 
changes that require a permit revision and permit revision procedures 
that provide for public process for environmentally-significant changes 
on a sliding scale, with more process provided as the significance of 
the change increases.
    On several issues related to permit revision procedures the 
litigants did not reach a consensus. These issues typically required 
more information to resolve than the litigants, including EPA, had 
available at the time. For instance, one of the proposed revision 
tracks provides only after-the-fact public notice of, and an 
opportunity to comment on, ``small'' changes at a permitted facility. 
The parties could not agree on what constitutes a ``small'' change, at 
least in part because the information needed to determine the 
consequences of choosing any particular definition was lacking.
    Today's proposed revisions to the flexibility provisions of part 70 
grow out of the progress made in the settlement discussions. The basic 
framework developed by the litigants is followed, and on those issues 
the litigants were unable to achieve consensus, alternatives are 
proposed for public comment. The proposal does not, however, represent 
a formal agreement among the parties as to how part 70 should be 
ultimately revised. All of the litigants are free to request changes to 
the proposal in their public comments. For its part, EPA is satisfied 
that today's proposed changes represent a reasonable compromise of the 
conflicting concerns and objectives of the various petitioners. 
However, EPA is concerned that the proposed changes are intricate and 
complex and are based on discussions with only a fraction of the 
companies, regulators, and citizen groups that have an interest in the 
permit program provisions at issue. For this reason, EPA encourages all 
interested parties to provide detailed comments on these changes and to 
address in these comments not only the specifics of the four-track 
permit revision system proposed today, but simpler alternatives that 
achieve the same regulatory goals.

D. Program Implementation and Resulting Proposed Revisions

    Since part 70 was promulgated, EPA has also participated 
extensively in State and local agency efforts to implement part 70. As 
indicated above, permitting authorities were statutorily required to 
submit their programs to EPA by November 1993. Thus, permitting 
authorities could not wait until the part 70 litigation had been 
resolved to develop their programs. These development efforts have 
revealed other issues not covered by the litigation.
    In addition, EPA has made progress in its own efforts to implement 
section 112 of the Act, which requires the Agency to comprehensively 
regulate HAP emissions. The form and timing of recently promulgated 
standards under section 112(d) (i.e., maximum achievable control 
technology (MACT) standards) have made necessary further revisions of 
part 70 to provide for orderly incorporation of MACT standards. The EPA 
is therefore including in today's notice proposed revisions to deal 
with certain issues arising from implementation of part 70 and section 
112.

III. Proposed Revisions of the Flexibility Provisions

A. Overview

    As mentioned above, the flexibility provisions of part 70 prescribe 
what changes at a source require a revision2 to the source's 
permit and what procedures apply if a revision is required. These 
provisions fall into three categories. The first two, containing the 
``off-permit'' and ``operational flexibility'' provisions, define 
changes that do not require permit revision. For changes requiring 
permit revision, the third category specifies the procedures to be used 
to revise the permit. This preamble sets forth the proposed revisions 
to each category in turn. It describes the current provisions, the 
issues they have posed, and the proposed approach to resolving those 
issues.
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    \2\The term ``revision'' is used in this preamble to refer to a 
change made to the permit during the permit's term, as opposed to a 
change at the time of permit renewal. Under the current rule, many 
changes that do not require permit revision must nevertheless be 
incorporated into the permit when it is renewed at the end of its 
term.
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    One issue, however, is common to all three categories and should be 
explained at the outset. The current rule limits the availability of 
the off-permit, operational flexibility, and minor permit modification 
(revision) provisions to changes that are not ``modifications under any 
provision of title I'' of the Act. The rule does not define the term 
``title I modification,'' and much confusion and controversy has 
surrounded its interpretation. Industry and most States, pointing in 
particular to footnote 6 of the proposed part 70 regulations (56 FR 
21712, 21746-7 (May 10, 1991)), have read that phrase as not including 
modifications governed by State or local agency minor new source review 
(NSR) programs. Environmentalists, on the other hand, have read the 
phrase as including minor NSR modifications (i.e., changes subject to 
minor NSR), since the statutory basis for minor NSR is section 
110(a)(2)(C), which is in title I of the Act.
    The confusion stems from EPA's failure to state explicitly whether 
or not ``modification under any provision of title I'' includes minor 
NSR changes. Several commenters requested that EPA clarify the meaning 
of title I modification in the final rule, but the Agency declined to 
do so, stating in its response to comment document that footnote 6 of 
the proposed rule (56 FR 21712, 21746-21747) contained an adequate 
description. Footnote 6 refers to other title I provisions addressing 
``modifications,'' but does not mention section 110(a)(2)(C), which 
requires States to regulate the ``modification'' (as well as 
construction) of stationary sources as necessary to assure that 
national air quality standards are met. Footnote 5 of the same preamble 
(56 FR at 21746) refers to footnote 6 ``for what constitutes a 
`modification' under CAA title I.'' Footnotes 5 and 6 thus imply that 
the phrase title I modifications excludes minor NSR modifications. The 
final rule's preamble discussion of minor permit modifications also 
implies that title I modifications do not include minor NSR 
modifications.
    At the same time, the phrase, ``modifications under any provision 
of title I,'' is broad enough to cover modifications under section 
110(a)(2)(C). As noted above, section 110(a)(2)(C) appears in title I 
and covers modifications of stationary sources. The prior rulemaking 
notices did not address how the phrase ``title I modifications'' can be 
read to exclude modifications under section 110(a)(2)(C), nor did they 
address how exclusion of minor NSR would affect the regulatory purposes 
of the NSR program.
    As previously noted, the purpose of section 110(a)(2)(C) is to 
assure that new or modified sources do not cause an area to fall short 
of achieving air quality standards. Virtually every State currently 
administers a minor NSR program. Section 110(a)(2)(C) and EPA's 
implementing regulations (40 CFR 51.160-164) leave States discretion to 
craft de minimis exemptions from the minor NSR program, and State 
programs broadly differ, in large part as a reflection of States' 
differing air quality conditions. Under section 110, these State 
programs must be included in State implementation plans (SIP's) and 
thus are integral parts of the Federal-State program for controlling 
air pollution under the Act.
    Congress defined ``modification'' under various title I provisions 
for purposes of determining the scope of particular Federal pollution 
controls; it did not define that term for purposes of section 
110(a)(2)(C). An argument can be made that the phrase ``title I 
modification'' only refers to modifications defined in title I 
provisions (e.g., section 112(a)(5)). It does not necessarily follow, 
however, that those title I modifications that States are left to 
define as a function of their minor NSR programs should be ignored. 
Indeed, given the Federal-State partnership established under the Act, 
``modifications under any provision of title I'' could be construed as 
including modifications of significance to States under minor NSR as 
well as those defined by Congress itself.
    Since 1977, when Congress established a separate and much more 
stringent NSR program for ``major'' new and modified sources (see parts 
C and D of title I of the Act), NSR programs under section 
110(a)(2)(C), i.e., minor NSR, have taken on the additional important 
function of providing a means for sources to avoid major NSR 
requirements. The statute defines ``major'' in terms of a new source's 
potential to emit, and EPA's implementing regulations provide that 
federally-enforceable controls and operational limits be considered in 
determining a source's potential to emit. As to modifications, EPA has 
by regulation also limited the reach of NSR under parts C and D to only 
``major'' modifications. Since minor NSR programs approved into SIP's 
establish federally-enforceable emissions limits, minor NSR permits 
have become the vehicle of choice for creating ``synthetic minor new 
sources'' and ``synthetic minor modifications.'' Available information 
indicates that many minor NSR permits issued in the last decade serve 
the function of creating ``synthetic minors.''
    Thus in light of the role of minor NSR in creating synthetic 
minors, the integrity of minor NSR programs is linked to the integrity 
of the major NSR program. Underscoring the importance of both programs 
is EPA's regulatory requirement that State or local permitting 
authorities provide an opportunity for public participation in major 
and minor NSR permitting (40 CFR 51.160, 161, 165, and 166). Against 
this backdrop, EPA believes that ``modifications under any provision of 
title I'' should be interpreted to include minor NSR modifications. The 
Agency solicits comment on this interpretation.
    The EPA is aware that many State and local agencies interpreted 
EPA's regulatory language to exclude minor NSR and developed their part 
70 programs accordingly. The Agency believes that it bears primary 
responsibility for the confusion that has surrounded the interpretation 
of ``a modification under any provision of title I.'' It is therefore 
proposing in another rulemaking action to revise the part 70 
regulations to allow the Agency to grant interim approval to State or 
local operating permits programs that allow minor NSR actions to be 
processed as minor permit modifications.

B. Off-Permit Provisions

    The first question to be addressed in designing a flexible permit 
program is what changes at a permitted facility that have the potential 
to affect regulated air emissions require a revision to the facility's 
permit.3 The current rule addresses that question in its ``off-
permit'' and ``operational flexibility'' provisions. The off-permit 
provisions generally define the realm of changes that a source can make 
without first revising its permit because the changes are neither 
prohibited nor addressed by the permit. It should be noted, however, 
that off-permit changes may need to be incorporated into a source's 
permit at permit renewal. The operational flexibility provisions, 
discussed in the next section of this preamble, describe particular 
categories of changes that a source can make without revising its 
permit because the permit provides for those changes, the changes 
involve emissions trading authorized by the permit, or the changes meet 
specified criteria.
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    \3\This discussion is not concerned with changes in those 
activities that have no bearing on regulated air pollutant 
emissions. Such activities do not give rise to permit terms, and 
thus changes to those activities cannot require a revision of permit 
terms. Examples of such ``unconstrained activities'' could include 
moving process equipment and conducting routine maintenance 
activities. Changes to activities that only insignificantly affect 
regulated air emissions are also not at issue here. The current rule 
provides that a source need not include in its permit application 
insignificant activities and emissions levels, provided they are not 
relevant to determining a source's applicable requirements or the 
permit fees the source owes. However, insignificant activities or 
emissions levels that are exempted because of their size or 
production rate must be listed in the permit application. A 
permitting authority is required to submit to EPA for approval as 
part of its part 70 program a list of activities to be considered 
insignificant.
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1. Current Rule
    Section 70.4(b)(14) of the current rule provides that a permitting 
authority may allow a source to make changes that are ``not addressed 
or prohibited by the permit'' without revising its permit. As EPA 
explained in the preamble to the current rule, while section 502(a) 
prohibits a source from operating ``except in compliance'' with its 
permit, a source does not violate this prohibition when it operates in 
ways that are neither addressed nor prohibited by its permit.
    At the same time, the current Sec. 70.4(b)(15) prohibits any source 
from making changes that are modifications under any provision of title 
I or subject to any requirements under title IV (acid rain) of the Act 
without revising its permit. As EPA explained, section 502(b)(10) 
indicates that permits should be revised to reflect modifications under 
any provision of title I, and the allowance trading system for acid 
rain sources under title IV would not be feasible if changes subject to 
title IV requirements could be made off-permit.
    In the case of sources required to obtain a permit under parts C or 
D of title I or section 112(g) of the Act, however, the current part 70 
allows for the permit to be revised after the source begins operation 
of the change. Under Sec. 70.5(a)(1)(ii), applications for permit 
revisions for such sources or source changes must be received within 12 
months of commencing operation of the modification or new unit, unless 
the permit prohibits such a change in operation, in which case the 
permit must be revised first.4
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    \4\The Agency discussed the relationship of these two provisions 
in the preamble to the proposed section 112(g) rulemaking (see 59 FR 
15537-39 (April 1, 1994)). In that rulemaking, EPA proposed that 
Sec. 70.5(a)(1)(ii) rather than Sec. 70.4(b)(15) govern when part 70 
permit revisions are needed to implement the requirements of section 
112(g). In today's rulemaking, EPA is proposing that 
Sec. 70.5(a)(1)(ii) govern when part 70 permit revisions are needed 
for changes, including section 112(g) changes, that qualify for off-
permit treatment under today's proposal.
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    Even in the case of changes eligible for ``off-permit'' treatment, 
Sec. 70.4(b)(14)(ii) requires sources to provide contemporaneous notice 
to the permitting authority and EPA of each such change, any resulting 
change in emissions, and any requirements under the Act that apply as a 
result of the change. The purpose of this provision is to allow the 
permitting authority and/or EPA to confirm that the change is eligible 
for ``off-permit'' treatment and to determine if the source is subject 
to any new applicable requirements.
2. Issues Raised
    Part 70's off-permit provisions have been another source of 
confusion and controversy. Questions about what changes qualify for 
off-permit treatment grow out of the title I modification criterion 
discussed above as well as the other criteria set out in the relevant 
regulatory provisions. Very different views of what changes qualify 
have been suggested. Some have argued that the off-permit provisions 
allow a source to change its operations in ways not contemplated by the 
permit and to no longer comply with permit terms that were developed in 
light of the source's pre-change operations, even if the permit terms 
on their face remain applicable. Others have argued for a much narrower 
interpretation, suggesting that as long as a permit term applies to a 
unit or operation at a source, no change that affects which 
requirements are applicable to that unit or operation can be made on an 
off-permit basis.
    Further, industry has questioned whether the off-permit provisions 
extend even to changes that neither violate a permit term nor change 
the applicable requirements to which a source is subject. As noted 
above, Sec. 70.4(b)(14) authorizes changes that are ``not addressed or 
prohibited'' by the permit to be made without revising the permit, but 
requires that such changes be reported to the permitting authority and 
EPA. On its face, it does not distinguish between changes that do and 
changes that do not affect the requirements applicable to the source, 
although the accompanying discussion in the preamble to the final part 
70 rule suggests that it was intended to cover only changes that affect 
which requirements apply to the source. Industry has been concerned 
that the provision could be read to cover all changes ``not addressed 
or prohibited'' by the permit, not just changes that affect which 
requirements are applicable to a source.
    As to the effect of the off-permit provisions, many State and local 
agencies have expressed concern that allowing sources to make changes 
off-permit is inconsistent with their current operating permit 
programs. Under those State or local programs, permits effectively cap 
a source's emissions; in other words, a source is prohibited from 
emitting more or differently than the terms of its permit provide. 
Permitting authorities with this type of permit program are concerned 
that the current rule's off-permit provisions may result in sources 
being allowed to make changes before the permitting authority has 
approved them. Other permitting authorities whose permits do not 
establish caps are nevertheless similarly interested in reviewing a 
source's changes before they are made to ensure that they comply with 
all applicable requirements.
3. Changes Not Requiring Permit Revision
    At the outset, EPA believes it is important to make clear that 
under title V and the current part 70, not all changes that bear on 
regulated air emissions require a change in the permit (either through 
permit revision or at permit renewal). A change at a source does not 
require a change in its part 70 permit if the source can make the 
change (1) without violating any permit term, and (2) without rendering 
the source newly subject to an applicable requirement. Since such a 
change does not violate permit terms, the permit need not be revised to 
accommodate the change. Since such a change does not make the source 
newly subject to an applicable requirement, the permit need not be 
updated to accurately reflect the requirements applicable to the 
source. Simply put, under part 70, such a change is within the scope of 
the permit and therefore does not require a change to the permit. This 
flexibility is inherent in the current part 70 rule, irrespective of 
the additional flexibility provided by Sec. 70.4(b)(14).
    The EPA is concerned that the rule does not clearly express this 
principle. As mentioned above, industry in particular has been 
concerned that the rule could be read to require any change to be 
reported and ultimately incorporated into the permit. The EPA is 
therefore proposing to revise part 70 to make clear that the only 
changes requiring a permit revision are those that a source cannot 
operate (1) without violating a permit term, and (2) without rendering 
a source newly subject to an applicable requirement. The Agency's 
reasons for requiring the permit to be revised during the term of the 
permit as opposed to updated at renewal are set forth below.
    This clarification of the rule's effect on changes that are within 
the scope of the permit is not meant to preclude permitting authorities 
from taking a more stringent approach to reviewing changes at permitted 
sources. As noted above, some permitting authorities are interested in 
reviewing all changes (or all changes with an emissions effect greater 
than a specified amount) to ensure that they meet all applicable 
requirements. Section 506(a) of the Act provides that States may adopt 
permitting requirements more stringent than EPA's permit rule requires. 
Permitting authorities may thus provide for review of all changes, even 
those within the scope of the permit, if they so desire. Permitting 
authority review of all changes has the advantage of ensuring that all 
changes meet applicable requirements, but EPA does not believe it 
necessary or appropriate to require permitting authorities to take this 
approach. Permitting authorities have differing air pollution control 
needs, and many permitting authorities may justifiably conclude that 
their situations do not warrant such comprehensive review of changes.
4. Appropriate Scope of Off-Permit Changes
    As described above, very different approaches have been taken to 
interpreting the off-permit provisions. These differences stem from 
differing views about what part 70 permits should attempt to 
accomplish. One of the principal purposes of title V is to create a 
single document for each covered source listing all of the applicable 
requirements that the source must meet under the Act. To the extent a 
source can make changes off-permit that affect which applicable 
requirements it must meet, its part 70 permit becomes at least somewhat 
outdated. A related goal of the part 70 permit is to ensure that the 
requirements applicable to a source are correctly determined and 
practicably enforceable. To the extent a source can make changes off-
permit, there is a risk that the source will incorrectly determine what 
requirements apply to it as a result of a change and will not 
adequately monitor its compliance with any newly applicable 
requirements.
    Beyond these purposes, some permitting authorities treat permits as 
licenses that allow a covered source to emit no more or no differently 
than the terms of its permit prescribe. Allowing sources to make off-
permit changes is inconsistent with this approach to permits. On the 
other hand is industry's concern for flexibility. If a source cannot 
make any change without first revising its permit, the source could 
lose valuable time in responding to changing market conditions.
    The Agency has re-evaluated the statutory basis and role of off-
permit changes, and believes several revisions of the current rule's 
off-permit provisions are warranted. As EPA noted in the preambles to 
the proposed and final part 70 regulations, section 502(a) of the Act 
prohibits a source from operating except in compliance with its permit. 
A source that could operate a change while remaining in compliance with 
its permit would not violate this prohibition, even if the change 
affected the composition of emissions or increased emissions. At the 
same time, sections 502(b)(5)(A) and 504(a) require that a permit 
program and permit ``assure compliance with applicable requirements.'' 
How far a program or permit must go to ``assure compliance'' is not 
clear, since it is not possible for any program or permit to guarantee 
that a covered source will comply with all of its applicable 
requirements all of the time. The EPA believes that these provisions 
require that the permitting process include reasonable measures for 
ensuring that the requirements applicable to a source are correctly 
determined and made enforceable. Obviously, to the extent a source can 
make changes before revising its permit, the permitting process cannot 
ensure that the source has properly assessed any resulting change in 
applicable requirements or undertaken to adequately monitor its 
compliance with them by the time it makes the change. The EPA does not 
believe, however, that sections 502(b)(5)(A) and 504(a) necessarily 
require that the permitting process screen all changes before they are 
made. Depending on the nature and significance of the change and the 
incentives created for sources to carefully assess the effect of a 
change on applicable requirements, it may be adequate for purposes of 
``assuring compliance'' for the permitting process to review the change 
within a reasonable amount of time after the change is made.
    Section 502(b)(9) is also relevant. It provides that permits with a 
remaining term of at least 3 years must be expeditiously revised to 
incorporate standards or regulations promulgated under the Act after 
the permit is issued. It thus indicates that Congress did not 
contemplate that permits would necessarily include all of the 
applicable requirements to which a source is subject at any given time. 
At the same time, it also indicates that Congress wanted permits 
updated quickly, so that they would remain reasonably comprehensive.
    The EPA believes that the statutory language and structure of title 
V indicate that Congress intended to carefully circumscribe, but not 
entirely foreclose, a source's ability to make changes without first 
revising its permit. Section 502(a) makes clear that a source may not 
violate any term of its permit. It also provides that a source may not 
operate ``except in compliance with'' its permit. If a source makes a 
change that violates a permit term, then it violates section 502(a). If 
it makes a change and no longer complies with permit terms that remain 
applicable on their face, it also violates section 502(a). In short, a 
source may live within section 502(a) and make a change without first 
revising its permit if it can and does operate the change while 
continuing to comply with all of its applicable permit terms.
    The Agency considers the preceding sentence to describe the legal 
outer bounds of off-permit changes under section 502(a). It therefore 
rejects the interpretation of the current rule's off-permit provisions 
that would allow sources to no longer comply with permit terms that 
remain applicable on their face but that the source believes to be out-
dated because it changed its operations in a manner not contemplated by 
the permit. In today's notice, EPA proposes to revise Sec. 70.4(b)(14) 
to clarify that off-permit changes do not relieve the source from 
complying with permit terms that remain applicable on their face.
    The question remains whether the full extent of off-permit changes 
allowable under section 502(a) should be provided in view of sections 
502(b)(5)(A) and 504(a). The effect of the proposed clarification of a 
source's ability to avoid permit terms by making off-permit changes 
could largely depend on the way in which its permit is written. To the 
extent a permit requires a source to conduct its operations in a 
certain way, there may be little or no ability on the part of the 
source to make off-permit changes, since any change to its operations 
may conflict with permit terms. At the other extreme, to the extent a 
permit requires a source to conduct its operations in a certain way 
only under certain circumstances, the source may well be able to more 
or less sidestep its permit by merely changing those circumstances. For 
instance, a permit that requires the application of a particular 
control technology if a source uses a certain fuel in a boiler unit 
does not constrain the operation of that boiler unit if the source 
switches fuels. Where the permit is written in such a conditional 
manner, the source is not violating its existing permit terms when it 
switches to a different fuel.
    To give effect to sections 502(b)(5)(A) and 504(a), however, a 
permit program may not allow permits to be so narrowly written as to 
guarantee their early obsolescence. To contain the potential realm of 
off-permit changes, a source's permit should identify and make 
enforceable the applicable requirements with which the source must 
comply over the foreseeable range of its operations. Put another way, 
permits should be crafted to remain reasonably comprehensive during 
their term. So, under the preceding example, where the source is 
designed to operate its boiler unit using alternative fuels, a permit 
that addresses only one mode of operation would not satisfy the section 
504(a) requirement for comprehensiveness. To help ensure that permits 
are reasonably comprehensive, EPA is proposing a minor change to the 
current rule to authorize a permitting authority to identify and 
include in a source's permit reasonably anticipated alternative 
operating scenarios.
    In addition to provisions for including alternative operating 
scenarios in permits, EPA is considering whether the realm of off-
permit should be more directly contained by limiting the kinds of 
changes that can be made off-permit. As noted above, title V was 
enacted to provide an accurate, enforceable compilation of the 
requirements applicable to every covered source. When a source makes a 
change that triggers a newly applicable requirement not contemplated by 
its permit, there is a public interest in ensuring that the correct 
requirements are identified and made enforceable. The source, on the 
other hand, has an interest in making changes as quickly as possible, 
and the changes at issue here by definition do not jeopardize the 
source's compliance with its permit.
    The EPA believes that a source should not be required to revise its 
permit before making a change (1) that it can make and still comply 
with its existing permit, and (2) that decreases emissions allowable 
under the permit.5 In the case of changes that decrease allowable 
emissions, the public interest in reviewing the change before it is 
made is offset by the public interest in maximizing emissions 
decreases. Further, such changes are at least sometimes the result of 
voluntary pollution prevention efforts, which might be discouraged by 
requiring a prior permit revision. In discussing when a source could 
make a change that does not violate permit terms but does trigger a 
newly applicable requirement, the litigants in the part 70 litigation 
agreed that emissions-decreasing changes should not await permit 
revision.
---------------------------------------------------------------------------

    \5\The change need not decrease actual emissions so long as it 
results in a decrease in allowable emissions. A decrease only in 
allowable emissions could occur where a source has been emitting at 
levels below its permit allowables and then makes a change that 
results in the source being subject to a more stringent limit on 
allowable emissions that nonetheless requires no decrease in actual 
emissions to meet.
---------------------------------------------------------------------------

    The EPA similarly believes that a source should not be required to 
revise its permit before making a change while still complying with its 
permit, if the change does not result in a net increase in emissions 
allowable under the permit. When a no-net increase in allowable 
emissions is expected, the public's interest in ensuring that 
applicable requirements have been correctly identified and made 
enforceable is adequately served by review after the change is made. 
The Agency is interested, however, in examples of changes that would 
not cause a net increase in allowable emissions and comments on how 
straightforward determinations of a no-net increase in such emissions 
would be. The Agency also solicits comment on whether the test for a 
net increase in emissions should be based on actual emissions instead 
of allowable emissions and what factors the Agency should consider in 
implementing such a test.
    The EPA solicits comment on whether a change that meets the off-
permit test but nonetheless causes allowable emissions to increase (for 
instance, as a result of the addition of a new unit or change in raw 
materials not prohibited by the permit) should be made without first 
revising the permit. As stated above, the Agency does not believe the 
statute requires that part 70 permits effectively cap a source's 
allowable emissions. A source may be able to make certain emissions-
increasing changes and still operate in compliance with its permit. At 
the same time, the public interest in ensuring that applicable 
requirements are correctly identified and practically enforceable is 
greatest in the case of emissions increases. Arguably, the public 
should have an opportunity to ensure that any increases are in keeping 
with applicable requirements and that any limits on those increases are 
enforceable before a source may increase its allowable emissions over 
that level effectively established by its current permit. The EPA 
solicits comment on whether a source should be allowed to make changes 
meeting the off-permit test without first revising its permit even if 
those changes increase allowable emissions.
    Some have urged EPA to entirely foreclose a source's ability to 
make off-permit changes as a way of ensuring that permits are 
comprehensive. The EPA solicits comment on this option. The Agency 
believes, however, that this source of flexibility is likely to be 
important to a source's ability to meet not only changing markets, but 
new standards. Under section 112, EPA foresees promulgating a 
potentially large number of MACT standards. Sources will become subject 
to those standards either at the time the standards are promulgated or 
on making changes that trigger the application of the standard. To 
comply with those standards, sources may well need to make changes 
before their permits can be revised. To the extent they can make those 
changes while still complying with their permits, EPA believes they 
should be allowed to do so.
    Even though the Agency believes that at least some changes meeting 
the off-permit test can be made without first revising the permit, it 
believes such changes should be incorporated into the permit within a 
reasonable period of time after the source begins to operate the 
change. As also noted above, the primary purpose of part 70 permits is 
to compile sources' applicable requirements. To meaningfully serve that 
purpose, part 70 permits must be kept reasonably up-to-date. Sections 
502(b) (9) and (10) confirm the need to keep permits reasonably 
current. As also noted above, the permitting authority and public have 
an interest in ensuring that applicable requirements have been 
correctly identified and made practically enforceable. Revising the 
permit within a reasonable time to reflect an off-permit change gives 
the permitting authority and the public an opportunity to provide that 
quality control. Accordingly, EPA proposes that a source be required to 
submit an application to revise its permit to reflect an off-permit 
change within 6 months of commencing operation of that change. Six 
months should provide the source with ample time to prepare a permit 
application and should not prevent the source from commencing the 
change when it needs to.
    Since a source could wait up to 6 months before filing a permit 
revision application for a change that it had made off-permit, the 
Agency is proposing to largely retain the current rule's requirement 
that a source provide contemporaneous notice to the permitting 
authority and EPA of off-permit changes. The requirement would be 
revised to make clear that only changes that render a source newly 
subject to an applicable requirement must be reported. Contemporaneous 
reporting would provide the permitting authority and EPA with an early 
opportunity to ensure that the source was operating the change in 
compliance with both its permit and the requirements applicable to the 
source as a result of the change.

C. Operational Flexibility Provisions

    The current rule provides that a source can make several types of 
changes without ever revising its permit. Most of these changes are 
defined by the ``operational flexibility'' provisions of the rule, so-
called because they implement section 502(b)(10).6 That section 
requires that the minimum elements of an approvable permit program 
include provisions to allow changes within a permitted facility without 
requiring a permit revision, so long as those changes do not constitute 
a modification under any provision of title I or increase emissions 
above permitted levels. An additional type of change not requiring 
permit revision is that defined by the ``alternative scenarios'' 
provision of the rule. Since alternative scenarios do not implement 
section 502(b)(10), they are not discussed in this section of the 
preamble, although they do provide another sort of operational 
flexibility. A minor revision to the alternative scenarios provision of 
the rule is proposed in the next section of this preamble.7
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    \6\Section 502(b)(10): The Administrator shall promulgate * * * 
regulations establishing the minimum elements of a permit program * 
* * These elements shall include each of the following: * * * 
Provisions to allow changes within a permitted facility (or one 
operating pursuant to section 503(d)) without requiring a permit 
revision, if the changes are not modifications under any provision 
of title I and the changes do not exceed the emissions allowable 
under the permit (whether expressed therein as a rate of emissions 
or in terms of total emissions: Provided, That the facility provides 
the Administrator and the permitting authority with written 
notification in advance of the proposed changes which shall be a 
minimum of 7 days, unless the permitting authority provides in its 
regulations a different timeframe for emergencies. (Parenthesis 
missing in original.)
    \7\Other regulatory provisions (e.g., the off-permit provisions) 
also provide sources with operational flexibility, but not as a 
function of section 502(b)(10).
---------------------------------------------------------------------------

    The current rule contains three provisions implementing operational 
flexibility under section 502(b)(10). Section 70.4(b)(12)(i) allows a 
source after providing the permitting authority with seven days prior 
notice to contravene permit terms that are unrelated to assuring 
compliance with applicable requirements (section 502(b)(10) changes). 
Section 70.4(b)(12)(ii) authorizes a permitting authority to allow a 
source to opt into an emissions trading program contained in the SIP, 
but not necessarily in the permit, to comply with limits established in 
its permit (trading based on a SIP). Section 70.4(b)(12)(iii) requires 
permitting authorities to allow a source to comply with an independent 
emissions cap in its permit through emissions trading when the source 
proposes an acceptable trading plan.
    Concerns have been raised about some or all of these provisions by 
State and local agencies, environmentalists, and industry. In response 
to these concerns, EPA is proposing to revise some aspects of the 
operational flexibility provisions and to clarify the operation of 
others. This section of the preamble examines each of the operational 
flexibility provisions and the proposed changes to it in turn. It is 
important first to understand EPA's general theory for implementing 
section 502(b)(10), however, before discussing the details of the 
proposed rule changes.
1. Statutory Interpretation
    As indicated above, EPA believes that section 502(b)(10) requires 
State and local permitting authorities to provide a minimum level of 
operational flexibility in a federally-approved part 70 program. 
Several of the petitioners in the permits case, however, challenged 
this view. They argued that section 506(a) allows permitting 
authorities to establish additional permitting requirements that may 
limit operational flexibility, and further that section 116 of the Act 
secures the permitting authorities' rights to enforce any requirement 
respecting air pollution control as long as it is no less stringent 
than Federal requirements.8
---------------------------------------------------------------------------

    \8\Section 506(a): Nothing in this title shall prevent a State * 
* * from establishing additional permitting requirements not 
inconsistent with this Act. [42 U.S.C. 7661e(a)]
    Section 116: Except as otherwise provided in sections [not 
relevant to title V] nothing in this Act shall preclude or deny the 
right of any State or political subdivision thereof to adopt or 
enforce * * * any requirement respecting control or abatement of air 
pollution; except that if an emissions standard or limitation is in 
effect under an applicable implementation plan or under section 111 
or 112, such State or political subdivision may not adopt or enforce 
any emission standard or limitation which is less stringent than the 
standard or limitation under such plan or section. [42 U.S.C. 7416]
---------------------------------------------------------------------------

    The EPA believes the language of section 502(b) clearly settles the 
issue. Section 502(b) requires EPA to promulgate regulations 
establishing the ``minimum elements'' of a State or local operating 
permit program. It then lists what these elements must include, and 
section 502(b)(10) is one of the specified elements. Thus, section 
502(b) requires that operational flexibility as prescribed by section 
502(b)(10) be included in an approvable permit program.
    Section 506(a) does allow a permitting authority to adopt 
additional permitting requirements, but those additional requirements 
must not be inconsistent with the Act, and the Act contains a mandate 
for operational flexibility in a federally-approved permitting program. 
Similarly, while petitioners correctly point out that section 116 gives 
State and local authorities considerable autonomy in operating an air 
pollution control program, section 116 does not alter the mandate for 
this minimum element; it simply preserves the permitting authority's 
right to enforce its own air pollution control requirements.
    Various groups have expressed differing views on how EPA should 
require permit programs to meet the Act's mandate for operational 
flexibility. Some argue that section 502(b)(10) merely authorizes the 
permitting authority to put alternative scenarios into a source's 
permit. For a source which anticipates making specific changes in its 
operations, its permit may be written to identify and enforce the 
applicable requirements to which the source would become subject on 
making the specified changes. A permit containing such alternative 
scenarios allows a source to change its operations from one scenario to 
the other without requiring a permit revision. At the other extreme, 
others argue that section 502(b)(10) allows sources, after 7 days' 
notice, to implement changes at the facility in contravention of their 
existing permit terms as long as the total allowable emissions from the 
permitted facility do not increase.
    The Agency disagrees with both extremes. Interpreting section 
502(b)(10) to only mandate that programs provide for the inclusion of 
alternative operating scenarios in permits makes the operational 
flexibility provision a virtual redundancy. The Agency does not believe 
that Congress would have included section 502(b)(10) in the 1990 Act 
amendments if it were merely a mandate providing for permits containing 
alternative scenarios, because section 504(a) effectively requires the 
same. As explained above, section 504(a) provides that a source's 
permit must contain the terms and conditions necessary to assure 
compliance with applicable requirements. For a source whose operations 
change in routine or foreseeable ways, its permit should accordingly 
anticipate those changes and specify the requirements that will apply.
    On the other hand, EPA cannot support the idea that section 
502(b)(10) obliges permitting authorities to allow unrestricted ad hoc 
proposals for emissions shifts across the permitted facility after only 
7 days' notice. This interpretation would effectively allow sources at 
will to revise requirements of the Act, revise the compliance 
requirements in their permits, or both. Neither practice is defensible 
as a legal or policy matter, for they would render the permit 
unenforceable, in violation of the mandates of sections 502(b)(5)(A) 
and 504(a) that permit programs and the permits themselves assure 
compliance with the requirements of the Act.9
---------------------------------------------------------------------------

    \9\The current rule does allow sources to make some changes that 
contravene permit terms. However, the rule's definitions governing 
section 502(b)(10) changes (``section 502(b)(10) change'' and 
``emissions allowable under the permit'') are drawn tightly to limit 
such changes to those permit terms that are unrelated to enforcing 
the applicable requirements of the Act. The EPA believes that such 
changes are only available in a case where some extraneous term has 
found its way into the federally-enforceable part of the permit. A 
well-drafted permit should not contain any terms subject to section 
502(b)(10) changes.
---------------------------------------------------------------------------

    In view of the necessarily limited scope of section 502(b)(10) 
changes, EPA interprets this section primarily as a mandate to promote 
emissions trading within permitted facilities that is consistent with 
the applicable underlying requirements. The EPA does not believe, 
however, that Congress intended to create free-floating authority for a 
source to revise unilaterally the compliance requirements in its 
permit. The combination of sections 502(b)(5)(A), 502(b)(10), and 
504(a) appears to contemplate changes in a facility's operations that 
do not require rewriting the permit and that do not increase emissions 
allowable under the permit. This is a reasonable description of a well-
crafted emissions trading plan with compliance terms governing pre-
established emissions trading parameters. The common theme shared by 
the program elements EPA is proposing today to implement section 
502(b)(10) is that they provide opportunities for emissions trading, 
while requiring that the trading plans be clearly enforceable according 
to established compliance terms.
2. Section 502(b)(10) Changes
    For the reasons presented above, EPA considers the potential scope 
of section 502(b)(10) changes to be very narrow. Many State and local 
agencies, however, contend that section 502(b)(10) changes are illegal, 
unworkable, and unwise. They argue that these changes allow a permittee 
to violate its permit terms without going through a permit revision 
process, in violation of sections 502(b)(5)(A), 502(b)(6), and 504(a). 
As a policy matter, they argue that the section 502(b)(10) change 
process will be susceptible to misuse and possible abuse by permittees 
seeking to confuse the permitting authority and avoid enforcement 
actions.
    As noted above, EPA views section 502(b)(10) changes as providing 
an opportunity for a source to clean up its permit by avoiding 
compliance with provisions that unnecessarily constrain its operations 
in ways unrelated to implementing the Act's requirements. However, EPA 
now believes that section 502(b)(10) changes will create a mechanism 
that could potentially wreak havoc with orderly compliance 
determinations under the permit.
    As permitting authorities began developing programs and probing the 
operation of this provision, it became clear that determining what 
qualified as a section 502(b)(10) change is a delicate evaluation of 
just what terms are absolutely necessary to enforce applicable 
requirements. At its root, this evaluation involves the fundamental 
question of applicability: are the permit terms justified by the 
applicable requirements? The process for these changes allows the 
source to make these determinations unilaterally and act on them after 
only 7 days' notice, with the likelihood that neither the permitting 
authority nor EPA will have reviewed them in any detail, and with no 
systematic opportunity for review by the public. A permit with a series 
of section 502(b)(10) notices attached to it voiding various permit 
terms would be a cumbersome document to enforce at best, and may 
include mistaken determinations of inapplicability which would cloud 
the enforcement of the permit terms which are avoided by using the 
section 502(b)(10) change notices.
    The Agency believes that the risks posed by this mechanism far 
outweigh the relatively slight contribution it makes to a permittee's 
operating flexibility. One central goal of the permit program is to 
settle disputes in the permit issuance process about the applicability 
of the Act's requirements at a source and to keep such disputes out of 
enforcement actions. Section 502(b)(10) changes could inject such 
disputes into enforcement action where a facility claims to have 
properly avoided a permit term that the permitting authority seeks to 
enforce. Litigating the availability of the section 502(b)(10) process 
to avoid the permit term would basically reopen the question of the 
applicability of the permit term and the underlying applicable 
requirement to the facility.
    Moreover, the permit issuance process already protects a source's 
interest in avoiding permit terms unrelated to the Act's requirements. 
If a permit contains an unnecessary or extraneous term, the facility 
will have good grounds to challenge it in the permit issuance process, 
and ultimately to seek review in State court. This is the forum where 
such fundamental disputes of applicability are appropriately resolved, 
not with a unilateral 7-day notice. Section 502(b)(10) changes give the 
source another opportunity for contesting applicability, and arguably 
rewards a source that is not diligent in scrutinizing the basis for the 
permit terms established in the permit issuance process.
    Consequently, EPA proposes today to eliminate section 502(b)(10) 
changes as a mechanism for implementing operational flexibility. The 
Agency solicits comment on the rationale for this proposed elimination.
3. Trading Under Permitted Emissions Caps
    Section 70.4(b)(12)(iii), as described earlier, requires permitting 
authorities to allow a source to comply with a certain type of cap 
through emissions trading if it can suggest a workable trading program. 
The type of cap eligible for trading under this section is a cap the 
source undertakes in its part 70 permit to limit emissions independent 
of any applicable requirement, usually to avoid an applicable 
requirement to which the source would otherwise be subject.
    Several State and local agencies have expressed concern that this 
provision requires them to approve emissions trading proposals that 
they would find inadequate absent the mandate of section 502(b)(10). 
They are also concerned that the trading regime established pursuant to 
this provision would supplant enforcement or other requirements 
associated with underlying applicable requirements, perhaps undoing a 
permitting authority's decisions regarding whether and how to include 
emissions trading in its SIP. In addition, some State and local 
agencies are concerned that this provision is designed to authorize 
sources to create ad hoc bubbles after only 7 day's notice.
    Industry, for its part, has objected to the fact that the benefit 
of this provision is only available when a State or local agency, in 
its discretion, allows a source to establish a cap in its permit. They 
argue that this provision can hardly be considered adequate 
implementation of section 502(b)(10)'s ``mandate'' to provide 
operational flexibility if State or local agencies can unilaterally 
block the use of the provision by simply refusing to grant caps.
    The Agency proposes to retain this provision as the basic mandate 
for implementing section 502(b)(10), but to revise it to address the 
concerns expressed by permitting authorities and by industry. As to 
permitting authorities' concerns, the proposed rule makes clear that a 
permitting authority must allow trading if it determines that the 
trading plan proposed by the source is consistent with all applicable 
requirements (including any SIP provisions governing trading) and meets 
the criteria for responsible emissions trades (described below). The 
permitting authority retains its discretion to evaluate proposed 
trading plans using those criteria. Of course, this provision also 
creates an obligation for the permitting authority to evaluate proposed 
trading plans, and its exercise of discretion will be subject to the 
appropriate standard of review applicable in State court where a permit 
applicant believes the permitting authority has arbitrarily rejected a 
trading proposal. The permitting authority may not reject a trading 
proposal simply because as a matter of policy it does not allow trading 
in circumstances when SIP or other applicable requirements would not 
otherwise restrict such trading.
    The Agency also proposes to revise the language in the current rule 
to clarify that any emissions trading plan developed pursuant to this 
provision should operate independently of the measures a source 
undertakes to meet (as opposed to avoid) applicable requirements. This 
provision would require the permitting authority to consider emissions 
trading plans designed to comply with emissions caps that the 
permitting authority establishes in the part 70 permit in addition to 
applicable requirements. The rule would go on to specify that the 
permit must in addition require compliance with all applicable 
requirements. Further, if an emissions cap is established in the permit 
pursuant to a requirement in the SIP, and the SIP does not provide for 
emissions trading to demonstrate compliance with the cap, the mandate 
in the SIP for line-by-line compliance under the cap controls. The 
section 502(b)(10) emissions trading provision therefore attaches only 
where the part 70 permit alone creates the cap, not where the 
underlying applicable requirement provides for one.
    As to State and local agency concern over ad hoc bubble authority, 
EPA proposes to clarify what is implicit in the current rule. That is, 
the compliance terms governing emissions trading under permit caps must 
be established along with the cap in a permit issuance or revision 
process subject to public review and comment. All the terms and 
conditions of any emissions trading plan must be contained in the 
permit. The function of the 7-day notice under this provision is not to 
establish the terms of emissions trading, but rather to notify the 
permitting authority and EPA that the source is utilizing the trading 
opportunities already provided for in the permit.
    In response to industry's concern, EPA is proposing to revise the 
language of the current rule to require permitting authorities to grant 
a source's request to establish as well as trade under an independent 
cap, if the source proposes an acceptable cap and trading plan. The 
Agency understands industry's concern about the potential 
unavailability of trading under this provision as currently drafted, 
although EPA did not expect permitting authorities to arbitrarily 
reject well-crafted caps. As provided above for trading, permitting 
authorities would have discretion to reject proposed caps if they were 
not allowed under the relevant applicable requirement(s) or did not 
meet the relevant criteria described below for trading under SIPs. 
Permitting authorities would also have the same duty to scrutinize 
proposed caps and approve them if they do meet these criteria.
    The Agency believes that affording sources an opportunity to 
establish an emissions cap and an opportunity to comply with that cap 
through trading is an appropriate means of implementing section 
502(b)(10). Accordingly, a source could request an emissions trading 
plan to meet a cap that would allow the source to shift emissions among 
several emissions units operating under the cap. At the same time, the 
permit must contain the emission limits and compliance terms, including 
monitoring, that are necessary to assure compliance with SIP limits and 
other applicable requirements. Indeed, it would probably behoove the 
source to attempt to employ the same monitoring regime for both the 
applicable requirements and the cap.
    In addition, a source could request a cap that would restrict total 
plant emissions of a particular pollutant (including emissions of that 
pollutant from new or modified units and activities) at an emissions 
level that would avoid a specific applicable requirement. Two examples 
serve to illustrate traditionally accepted options for such cap 
development. First, a source that must obtain a part 70 permit because 
it is already major for NOx emissions might wish to avoid also being 
major for volatile organic compounds (VOC) emissions in order to avoid 
the reasonably available control technology (RACT) requirements that 
apply only to major VOC sources (e.g., for this example, sources of 100 
or more tons per year (tpy) VOC's are major). To accomplish this 
result, the source could establish in its part 70 permit an enforceable 
emissions cap for VOC's of 99 tpy and an enforceable means to track 
total plantwide VOC emissions from the source (including any emissions 
from new or modified units). Compliance with such a cap would have the 
effect of insulating the source from the RACT requirement to which any 
major source of VOC's would be subject.
    Second, a plant-wide emissions limit could be set for a major 
source of VOC's at a level which, if not exceeded, would allow the 
source to avoid triggering preconstruction review under part C of the 
Act even when it made physical changes that increased VOC emissions. In 
this example, the cap would be set at a VOC emissions level which is 
representative of actual source emissions over the preceding 5-year 
(contemporaneous) period plus an amount just below the significance 
level defining a major modification for VOC (i.e. 40 tpy). If a 
practical, enforceable means can be defined in the permit to track 
emission changes from new as well as existing emissions sources at the 
plant, then compliance with the cap would avoid the triggering of 
otherwise applicable PSD requirements.
    In designing a cap such as in the second example, it is important 
to remember that, by its terms, section 502(b)(10) cannot accommodate 
title I modifications. As explained earlier, EPA believes that the 
better interpretation of the term ``title I modifications'' would 
include changes subject to a SIP-approved minor NSR program. Industry 
representatives have expressed concern that under this interpretation 
of title I modifications, the utility of section 502(b)(10) trading 
could be significantly limited to the extent changes made pursuant to a 
trading regime were minor NSR modifications. They contend that under 
this interpretation such changes would be outside the scope of section 
502(b)(10) and would require permit revision, even if they did not 
exceed the cap established in the permit.
    The Agency believes that section 502(b)(10) trading plans need not 
be circumscribed by State or local minor NSR programs. The effect of a 
minor NSR program on trading plans would initially depend on the scope 
and design of the minor NSR program. The more inclusive the minor NSR 
program, the greater the likelihood that a trade might involve a minor 
NSR modification. At the same time, a minor NSR program that allows a 
source to undertake a practicably enforceable emissions cap to avoid 
the need for modification-by-modification application of minor NSR 
requirements would allow section 502(b)(10) trading plans to avoid the 
same.
    Regardless of the availability of emissions caps under a minor NSR 
program, trading plans could be developed consistent with section 
502(b)(10) to the extent the plans anticipated and provided for minor 
NSR requirements that the source would have to meet as a result of 
changes made pursuant to the trading plan. As described in more detail 
later in this preamble, permitting authorities could use the device of 
``advance NSR'' to avoid modification-by-modification application of 
minor NSR requirements. The EPA expects that a source may often be able 
to anticipate both the prospective minor modifications that would occur 
at a facility as a result of trading, as well as the technology or 
other minor NSR requirements that would apply as a result of the 
modification. To the extent the trading plan provided for these 
requirements to be met when the changes are made, the changes 
themselves would at that time not trigger NSR and thus would not be 
title I modifications.
    It is also worth noting that the Agency's regulations at 40 CFR 
51.160-164 give permitting authorities significant discretion in 
shaping their minor NSR programs to meet the statutory requirements of 
section 110(a)(2)(C) of the Act. This discretion would enable 
permitting authorities to tailor their minor NSR programs to better fit 
the desired shape of emissions trading programs under proposed 
Sec. 70.4(b)(12), provided that the structure of any program or cap 
would adequately safeguard all applicable ambient constraints (e.g., 
national ambient air quality standards). This limitation might 
constrain caps to VOC emissions trades unless additional ambient 
safeguards are added for other criteria pollutants (e.g., PM-10 or 
SO2). For instance, a permitting authority that wanted to make full use 
of emissions trading under proposed Sec. 70.4(b)(12) could as part of 
its minor NSR program allow sources to establish plant-wide emissions 
caps that are practicably enforceable for the combination of new and 
existing emissions units at the plant site. Individual changes under 
this cap would then not trigger either major or minor NSR and would 
fall within the scope of section 502(b)(10).
    These options for cap development should effectively address many 
of the concerns that have been raised by industry about the potential 
effect of minor NSR on a source's ability to trade. In addition to 
these options, it should be noted that today's proposal contains other 
provisions that would also be useful in addressing these concerns. As 
previously described, the proposal would provide that changes 
qualifying for off-permit treatment could be made before even a permit 
revision application is submitted. Moreover, changes not qualifying for 
off-permit treatment might qualify for the streamlined permit revision 
tracks (described later in this notice) that allow a source to begin 
operation of the change as early as the day it submits its permit 
application. These proposed provisions would reduce delay and 
opportunity costs to affected sources. The Agency solicits comment on 
whether these aspects of the proposal together with the options for cap 
development and ``advance NSR'' noted above would adequately address 
the concerns raised by industry while assuring compliance with the Act.
    The foregoing discussion on caps points out the ramifications of 
the intersection of minor NSR and part 70 permit revision requirements 
generally for plant-wide caps, whether or not developed pursuant to the 
part 70 provisions implementing section 502(b)(10). Plant-wide caps 
currently are being used to both limit applicability (as in the case of 
a NSR cap) and as an air quality management tool (as in the case of a 
ratcheting cap within the Regional Clean Air Incentives Market program 
in the South Coast Air Quality Management District of California). The 
EPA believes that plant-wide caps represent a sound alternative for 
sources seeking to maximize their production flexibility while still 
meeting Act mandates. However, under either the current or proposed 
part 70, care must be used in constructing caps to avoid triggering 
part 70 permit revision requirements.
    The Agency wishes to clarify that neither the proposal nor the 
current rule would interfere with the establishment of other plant-wide 
caps set by permitting authorities that are in addition to applicable 
requirements. It notes that changes at a source operating in compliance 
with a plant-wide cap developed by a State or local agency would not 
need a permit revision, provided the change did not violate an existing 
permit term or trigger an applicable requirement to which the source 
was not previously subject.
4. Trading Under the Implementation Plan
    As noted above, Sec. 70.4(b)(12)(ii) authorizes, but does not 
require, permitting authorities to allow a source to engage in 
emissions trading as provided by the applicable implementation plan 
without revising its permit. Environmental groups argue that this 
provision creates the risk of a ``shell game'' in which neither the 
permit nor the SIP contain adequate compliance requirements to assure 
that the emissions trades allowed are enforceable. They believe that 
after incorporating carefully crafted emission limits into the permit 
at issuance, a source could send in a 7-day notice to opt into a SIP 
trading regime that no one scrutinized at permit issuance.
    In response to this concern, the proposed part 70 revisions would 
require that the permit identify as part of a permit issuance, renewal, 
or significant permit revision process those permit terms which may be 
replaced with the emissions trading provisions in the implementation 
plan.
    A similar concern has been expressed that this provision allows 
sources to replace enforceable emission limits in the permit with as 
yet undefined trading programs in SIP's. The Agency's response is that 
the trading provisions which a source may use under this provision must 
be approved into the SIP through a process that involves rulemaking on 
the State or local level (including a hearing) and on the Federal level 
with public notice and an opportunity for public comment. As EPA stated 
when it promulgated this provision, there are currently no approved 
SIP's that are designed to implement these trading provisions (57 FR 
32268). If permitting authorities choose to develop such SIP 
requirements, the public will have ample opportunity to scrutinize the 
ability of a SIP trading plan to supply the compliance terms that would 
replace permit terms.
    Furthermore, EPA envisions that there will be substantial effort 
required to formulate such SIP provisions, which would be roughly 
analogous to developing a general permit within the SIP consistent with 
the criteria for emissions trading outlined below for classes of 
emissions trades at source categories. One reason EPA has made this 
method for implementing section 502(b)(10) optional for permitting 
authorities is that it would entail a significant restructuring of 
existing SIP's to accomplish. Moreover, such SIP's would have to supply 
sufficient detail to enforce compliance with the level of emissions 
reduction required by the permit term that the SIP's requirements could 
replace. If any party believed that a proposed SIP revision did not 
contain sufficiently clear or detailed compliance requirements, they 
could challenge the SIP proposal or the proposed permit that identified 
the units eligible for such trading based on its failure to include 
enforceable emission limitations consistent with section 110(a)(2)(A) 
of the Act. Therefore, there is no risk of a ``shell game'' in which 
the public searches fruitlessly in the permit or the SIP for 
enforceable compliance terms.
5. Criteria for Emissions Trading Provisions
    As a result of the above interpretation of section 502(b)(10) and 
other elements of the part 70 rule, EPA anticipates that State and 
local permitting authorities will be evaluating proposals for emissions 
caps and trading plans in a variety of contexts. Therefore, EPA 
believes it is useful to emphasize the key criteria it has identified 
for evaluating emissions caps and trading caps. These criteria are 
drawn from EPA's Emissions Trading Policy Statement (51 FR 433814 (Dec. 
4, 1986), hereinafter the ET Policy) and the final Economic Incentive 
Program Rules (59 FR 16690 (April 17, 1994), hereinafter the EIP rule. 
See also the preamble to the final part 70 rules (57 FR 32268). 
Although each of these prior statements discusses emissions caps or 
trading in a slightly different context (e.g., setting up an entire 
program as opposed to determining an emissions reduction credit at an 
individual source or establishing a plant-wide emissions cap below 
which a particular requirement such as major NSR or 112(g) would not 
apply for that pollutant), there are critical criteria that run through 
all responsible emissions caps or trading plans as they would apply in 
the context of this rule.
    a. Quantifiable. Emissions being capped or traded in an emissions 
trading plan must be quantifiable. There must be a workable, reliable 
method for determining the amount of emissions being counted towards a 
cap or being traded. ``Quantification may be based on emissions 
factors, stack tests, monitored values, operating rates and averaging 
times, process or production inputs, modeling, or other reasonable 
measurement practices. The same method of calculating emissions should 
generally be used to quantify emission levels both before and after the 
reduction'' (ET Policy, 51 FR 43832, see also final EIP preamble, 59 FR 
16689). For example, emission sources that are regulated by work 
practice standards because emissions are difficult to quantify using an 
emission limit would be unlikely candidates for inclusion in an 
emissions cap or trading plan, absent some new development in 
measurement or monitoring methodology.
    b. Enforceable. The emissions cap or trading plan must be embodied 
in a federally-enforceable instrument with clear and unambiguous 
compliance requirements which EPA, the permitting authority, and 
citizens may readily enforce as a practical matter. Typically this will 
be the part 70 permit, although, as discussed above, it may also be the 
SIP. An emission limit must also be practicably enforceable, with 
monitoring and recordkeeping requirements that match the emissions 
limits and averaging time designed into the emissions trading plan. 
``Bubbles should be incorporated in an enforceable compliance 
instrument which requires recordkeeping based on the averaging period 
over which the bubble is operating, so it may easily be determined over 
any single averaging period that bubble limits are being met'' (ET 
Policy, 51 FR 43832).
    c. Replicable. Caps and trading procedures should be structured so 
that two independent entities applying the procedures would obtain the 
same result when determining compliance with the emission cap or 
trading provisions. In the context of an emissions cap or trading plan 
approved into a permit, this involves objective methods of quantifying 
and accounting for emissions. ``All source-specific program 
requirements must be structured in such a way that both inspectors and 
facility owners can judge the compliance status of a facility at any 
time. * * * This will require an authoritative, reliable repository of 
all relevant information at each facility'' (EIP rule, 59 FR 16690).
    d. Surplus. Where a permitting authority is establishing SIP rules 
to authorize trading at permitted facilities, as described above, those 
rules must be consistent with the assumptions made in the demonstration 
of reasonable further progress, attainment, or maintenance supporting 
the SIP. For example, emissions reductions which a source may use as an 
emissions reduction credit in any trading rule must not already be 
relied upon for SIP planning purposes (see generally ET Policy, 51 FR 
43832), nor may the reductions be otherwise required under any 
provision of the Act.
    e. Accountable. Correspondingly, the reasonable further progress, 
attainment, or maintenance demonstration must account for the aggregate 
effect of the emissions cap or trades allowed under any such cap or 
trading rules (see 57 FR 32268).

D. Other Elements of the Rule Providing Operational Flexibility

    Beyond the mandate in section 502(b)(10), the current rule requires 
that permit programs contain other elements providing operational 
flexibility. The Agency is proposing to retain these provisions with 
minor adjustments subsequently described.
1. Emissions Trading Based on Applicable Requirements
    Section 70.6(a)(8) of the current rule requires that permits state 
that no permit modification shall be required under approved economic 
incentive and similar programs for changes that are provided for in the 
permit. Section 70.6(a)(10) further provides that permits must also 
include terms and conditions for emissions trading where the applicant 
requests them and the underlying applicable requirements provide for 
emissions trading without requiring a case-by-case review of each 
emissions trade.
    Several of the petitioners in the permits case expressed concern 
that the rule is not clear that economic incentive programs must be 
approved in the SIP and that the permit terms and conditions governing 
the trading must be established in the permit pursuant to procedures 
that involve public comment. They also objected that these provisions 
improperly require a permitting authority to include trading 
requirements in a permit, preempting their authority to deny emissions 
trading to sources.
    The Agency is not proposing to change these provisions 
significantly, other than to clarify in Sec. 70.6(a)(8) that any 
economic incentive or similar program or process providing for 
emissions trading in the permit must first be approved in an 
implementation plan or other applicable requirement. Both provisions 
read in context make clear that the permit must contain the compliance 
terms and conditions governing any emissions trades authorized in the 
permit pursuant to these requirements. Section 70.6(a)(8) requires that 
any emissions trading changes must be provided for in the permit. 
Nothing in that section removes the obligation for all permits to have 
terms and conditions pursuant to Secs. 70.6(a) and (c) to assure 
compliance with all permit terms, including the trading provisions. 
Section 70.6(a)(10) explicitly refers to the rest of Secs. 70.6(a) and 
(c) in directing that compliance terms must be in the permit. 
Therefore, when the permit is issued, the public will have ample 
opportunity in the permit issuance process to scrutinize those 
compliance terms governing the emissions trades.
    The Agency does not agree that these trading provisions preempt the 
discretion of State and local permitting authorities. Rather, these 
provisions require a permitting authority to include in the permit 
emissions trading opportunities already contained in the underlying 
applicable requirements. Note, however, that where the opportunity for 
trading to meet an applicable requirement is optional and subject to 
the discretion of the permitting authority, this discretion is limited 
by the requirement in Sec. 70.6(a)(10) which requires the permitting 
authority to provide for such trading. Commenters may raise any 
complaint they may have with the appropriateness of mandatory emissions 
trading when the applicable requirement is established, through either 
an approval or rulemaking process for a SIP or Federal standard. The 
permitting authority will be required to incorporate the applicable 
requirement and its trading opportunity into the permit.
2. Alternative Operating Scenarios
    Section 70.6(a)(9) requires that reasonably anticipated alternative 
operating scenarios must be provided for in the permit to the extent 
all scenarios comply with applicable requirements. The current rule 
specifies that the permitting authority include such scenarios in the 
permit at the request of the source. As explained above, the inclusion 
of all reasonably foreseeable alternative scenarios in the permit is 
important to the permit's comprehensiveness. The Agency is therefore 
proposing a minor revision to this section of the rule to make clear 
that the permitting authority is authorized to include in a source's 
permit the alternative scenarios that it identifies as likely.
    Section 70.6(a)(9) further requires that a source keep a 
contemporaneous record of all changes among alternative scenarios in an 
on-site log. Several petitioners in the permit case have challenged the 
use of an on-site log to record changes among scenarios. They argue 
that the risk of post hoc manipulation of an on-site log is too great, 
potentially allowing a facility to change records of which scenario was 
in effect at specific times in an effort to reconcile the recorded 
scenarios with the monitoring data the source must submit semi-
annually.
    In response to these concerns, today's proposed revisions to part 
70 would allow a source to use an on-site log of changes among 
operating scenarios when each of those scenarios has monitoring that 
meets two conditions. First, each scenario must be monitored in a way 
that yields objective, contemporaneous measurement and recordation of 
the relevant emissions or parameters. Second, each scenario must have a 
sufficiently different means of measurement that the contemporaneous 
record reveals the scenario under which the source was operating when 
the record was made. In any other case, the facility would be required, 
for each week during which one or more changes to a different operating 
scenario was made, to copy the on-site log of changes for that week and 
mail it to the permitting authority. These proposed new provisions 
would assure that either the scenarios are monitored in a way that 
inherently reveals the scenario in effect at all times, or the 
permittee reports changes among scenarios within a sufficient period of 
time to avoid any significant possibility of after-the-fact tampering.
    The Agency invites comments on two aspects of this proposal to 
revise the reporting requirements associated with alternative 
scenarios. First, EPA is concerned that this framework for reporting 
would create another layer of complexity and paperwork in order to 
address a risk that may be theoretically important, but actually small. 
Subsequently in today's notice, EPA proposes to clarify that the 
required monitoring reports must indicate the alternative scenario that 
was in operation during each monitored period. In light of this 
clarification, EPA requests information concerning the need for and 
burden of the proposed changes to the alternative scenarios reporting 
requirements. The Agency is particularly interested in permitting 
authorities' experiences with monitoring alternative scenarios. In 
their experience, has tampering with compliance reports been a problem? 
Would the proposed revisions effectively address any such problem? 
Specific accounts of experiences and practices in the field would 
assist EPA in deciding whether to include the proposed revisions in the 
final rule.
    Second, assuming EPA promulgates revisions requiring reporting of 
changes between alternative scenarios, the Agency is interested in 
receiving comments on the appropriate interval for reporting. Weekly 
reports are proposed, but EPA requests comments and information on 
whether monthly or quarterly reporting would be sufficient to 
significantly reduce any risk of tampering with the relevant records.
3. Advance NSR Approval
    The Agency also proposes to allow the use of alternative scenarios 
to provide advance approval of construction or modification subject to 
NSR. If a permit applicant can anticipate its construction or 
operational needs with sufficient particularity, the permitting 
authority may be able to build into the permit an alternative scenario 
that sets forth and makes enforceable the applicable NSR requirements 
to which the source would become subject on constructing or modifying 
its operations in that fashion. The permitting authority would 
essentially be approving a construction permit in advance and placing 
its terms within the operating permit. The opportunity for the source 
to act on the permission to construct would expire consistent with the 
limits in the underlying program for the duration of a construction 
approval (e.g., a PSD permittee must generally begin a continuous 
course of construction within 18 months of permit issuance). Where the 
applicable NSR requirement(s) would not allow the source to implement 
an advance NSR change as an alternative scenario through the full term 
of the permit, EPA solicits comment on allowing a permitting authority 
to extend the availability of the advance NSR option subject to certain 
additional constraints. For example, when the period over which a 
specific control determination is authorized would be exceeded, the 
permit might still provide that the advance NSR option remains 
available to the source if the source resubmits the control approach to 
the permitting authority before its expiration and it is reaffirmed. If 
no change from the originally approved approach is required, the source 
could again have the option to implement the related operational change 
as an alternative scenario.
    The Agency anticipates that the advance opportunity may prove 
useful in enhancing the flexibility under the permit for facilities 
that can anticipate their expansion needs with reasonable specificity. 
Comment is invited on the use of ``advance NSR'' for any of the 
following programs: nonattainment area NSR under part D of the Act, PSD 
under part C, minor NSR under section 110(a)(2)(C), and modifications 
at HAP's sources under section 112.

E. Permit Revisions

1. Introduction
    As set forth above, the only changes requiring a permit revision 
are those that cannot be operated without (1) violating a permit term, 
or (2) rendering the source subject to a requirement to which the 
source has not been previously subject. The number of changes requiring 
permit revision can be minimized, moreover, through the use of 
alternative scenarios and operational flexibility provisions, as well 
as ``worst-case'' permitting (i.e., writing permits to reflect maximum 
allowable emissions). In view of these provisions, EPA believes that a 
permit can and should be crafted to accommodate a broad spectrum of 
changes at the covered source.
    There is a limit, however, to a source's ability to predict the 
future, and some changes at a facility will require permit revision. 
The issue then becomes how to revise the permit. Of course, changes 
qualifying for off-permit treatment need not await permit revision 
before being operated. But for all other changes requiring permit 
revision, the procedures for revising the permit will be key to a 
source's ability to make changes in time to meet market demands. 
Finding the right balance between industry's need for flexibility and 
the public's interest in permit decisionmaking has been a challenge for 
the Agency.
    The current rule establishes a three-track revision process that 
provides differing levels of review depending on the nature of the 
change being made. Administrative amendments receive the least process 
(i.e., no public, affected State, or EPA review), and are consequently 
limited to changes that either are trivial in nature or have already 
undergone a preconstruction permit process (e.g., NSR) that met part 70 
permit content and process requirements (see Sec. 70.7(d)(1)(v)). Minor 
permit modifications receive EPA and affected State review, but only 
after the source has begun to operate the change. They receive no 
public review, and are accordingly limited to changes that, among other 
things, are not modifications under any provision of title I and do not 
involve case-by-case determinations. Significant permit modifications 
are processed using full permit issuance procedures, including public, 
affected State, and EPA review. All changes not eligible for 
administrative amendment or minor permit modification treatment must be 
processed as significant permit modifications. In addition, such 
changes may not be operated until the permit has been revised to 
accommodate the change.
    Related to these procedures is the availability of a ``permit 
shield'' against enforcement action. Under Sec. 70.6(f) of the current 
rule, States are authorized to include in a source's permit a provision 
stating that compliance with the conditions of the permit shall be 
deemed compliance with any applicable requirement to which the source 
was subject as of the date of permit issuance and which is addressed by 
the permit. In other words, so long as a source complies with its 
permit, and its permit indicates which applicable requirements do and 
do not apply to the source, the source may not be prosecuted for 
failing to comply with a requirement that the permit failed to 
incorporate either correctly or at all. The rule, however, does not 
extend the shield to permit terms that are revised via administrative 
amendment or minor permit modification procedures, because of the lack 
of public process associated with those permit revision tracks.
    As noted above, many of the issues raised in the part 70 lawsuit 
relate to one or more of the revision tracks. State petitioners are 
concerned that the rule allows sources to make changes eligible for 
administrative amendment and minor permit modification procedures 
without adequate permitting authority review or prior approval. 
Environmental groups and some State litigants argue that public notice 
and opportunity for comment must be provided for minor permit 
modifications; otherwise, sources will be able to rewrite with 
virtually no process substantive permit terms that had been established 
through full public process. They also assert that the public's right 
under the statute and the rule to petition EPA or the courts to 
overturn permitting decisions is effectively mooted in the case of 
minor permit modifications by the rule's failure to provide public 
notice of those changes.
    Industry, on the other hand, believes that the current rule's 
revision procedures are more burdensome than necessary for small 
changes or changes that have undergone prior permitting authority 
review. In general, they argue that there is some level of changes that 
may be incorporated into a part 70 permit without public process on de 
minimis grounds. In particular, they contend that changes that have 
already received preconstruction approval (e.g., pursuant to NSR) do 
not warrant further process before being incorporated into a part 70 
operating permit. They therefore recommend that the rule allow such 
changes to be treated as administrative amendments and included in a 
part 70 permit without public, affected State, or EPA review. They also 
suggest that minor permit modifications do not warrant affected State 
and EPA review and should get the benefit of a permit shield.
    Clouding the debate over the sufficiency of the current rule's 
revision procedures has been the issue of the proper interpretation of 
the phrase, ``modifications under any provision of title I.'' As 
indicated above, under the current rule title I modifications are not 
eligible for minor permit modification procedures. The scope of minor 
permit modifications thus depends in part on the interpretation of 
``title I modification.'' Under a narrow reading of that term, a change 
subject to minor NSR can be operated before affected State and EPA 
review and then incorporated into a part 70 permit without public 
review, provided the change is not prohibited by any of the other 
applicable ``gatekeepers.'' Under a broad reading, a minor NSR change 
can be operated only after the permit has been revised via significant 
permit modification procedures providing for full public process. The 
meaning of title I modification thus determines whether the public gets 
any notice of permit actions involving a minor NSR change and whether 
sources can operate such a change as soon as they apply for a part 70 
permit revision or as long as 18 months afterwards.
    The Agency is concerned that the current rule requires either too 
little or too much public process depending on how the title I 
modification gatekeeper is read. As explained previously, EPA believes 
that minor NSR programs play an important role in the statutory design 
for achieving clean air. Not only do those programs ensure that minor 
sources do not interfere with an area's attainment of air quality 
standards, they also provide sources with a means of establishing 
federally-enforceable limits on potential to emit that sources may rely 
upon to avoid more burdensome requirements. Accordingly, EPA considers 
it inappropriate to allow all minor NSR actions to escape public review 
altogether. On the other hand, EPA does not believe that all or even 
most minor NSR changes warrant the full public procedures required for 
significant permit modifications. All changes subject to minor NSR by 
definition have undergone prior permitting authority review, and many 
involve at most only small increases in emissions. More streamlined 
procedures should thus be sufficient for incorporating those changes 
into the part 70 permit.
    In attempting to resolve the issues concerning permit revision 
procedures, EPA has sought to strike the appropriate balance between 
permitting integrity and flexibility. Title V of the Act provides for a 
number of procedural safeguards to ensure the integrity of the 
permitting process. These safeguards include EPA review of, and 
appropriate opportunities for public and affected State participation 
in, permit decisionmaking (see sections 505(a) and (b) and 502(b)(6)). 
At the same time, title V calls for permit procedures that are 
``streamlined'' and ``expeditious[]'' (see section 502(b)(6)). The 
Agency believes the statute affords it broad discretion to fashion 
permit revision procedures that are reasonable in light of the 
environmental interests at stake. In developing the proposed permit 
revision procedures, EPA's approach has been to provide procedural 
safeguards, including opportunities for public and affected state 
participation, that are commensurate with the potential environmental 
significance of the change being sought. Thus, for the most 
environmentally significant changes, the greatest procedural 
protections would be afforded, including a 30-day public comment period 
and permitting authority final decision before the change could be 
made. For environmentally insignificant changes, however, EPA has 
authority to forego procedural protections, including public and 
affected State review, on de minimis grounds (see Alabama Power Co. v. 
Costle, 636 F.2d 323, 357-361 (D.C.Cir. 1979). To ensure that the 
changes are indeed insignificant, though, EPA proposes to provide for 
abbreviated public review after the change has been made and it 
solicits comments on this approach.
    As detailed below, EPA is proposing a four-track system that 
matches the amount of public process provided to the potential 
environmental significance of the change, taking into account the 
amount of prior public review. Only the most significant changes that 
had received little or no prior public review would be processed as 
significant permit revisions requiring a 30-day public comment period 
and an opportunity for a public hearing before the source could operate 
the change. The large majority of changes requiring permit revision 
would be processed using one of the three more streamlined tracks, with 
the choice of track depending primarily on the size of the change and 
the amount of public process the change received prior to the part 70 
revision process. To the extent a change was subjected to public review 
prior to the part 70 process (e.g., as a result of preconstruction 
review), it would receive abbreviated or no additional public review 
during the part 70 process. To the extent a change was small in terms 
of emissions impact, even if no prior public review was provided, it 
would receive only post hoc public review during the part 70 process. 
In addition, the permit shield would be available for some of the 
changes that underwent streamlined processing.
    The following section of the preamble provides an overview of the 
four permit revision tracks being proposed and then examines each of 
the tracks in turn, beginning with the most streamlined. While EPA 
believes that the proposed framework better balances the interests of 
industry and the public in the permit revision process, it is 
nonetheless concerned that it may be too complex to be readily 
implemented. The Agency thus solicits suggestions as to how the 
proposed procedures might be simplified while generally retaining the 
balance struck by the overall framework.
2. Overview of Proposed Revision Procedures
    EPA today is proposing changes to the current rule's revision 
procedures to provide a streamlined process that includes appropriate 
opportunities for public participation. Briefly stated, the Agency 
proposes to largely retain the current rule's administrative amendment 
procedures, which provide no public, affected State, or EPA review and 
allows a source to operate an eligible change upon submission of a 
permit revision application. (In operating a change before its permit 
is revised, the source accepts the risk of being found liable for 
violating its existing permit if its revision application is later 
denied.) Indeed, EPA is proposing to ease one of the requirements for 
use of administrative amendments. Under the current rule, any change 
that undergoes a prior preconstruction review process that (1) provides 
public and affected State review opportunities substantially equivalent 
to those required by the part 70 rule, (2) addresses part 70 permit 
content requirements, and (3) provides a 45-day EPA objection 
opportunity is eligible for administrative amendment incorporation into 
the part 70 permit. Under today's proposal, however, a source would no 
longer have to wait until the end of EPA's objection opportunity to 
construct the requested change. Instead, the source could construct the 
change upon receiving preconstruction approval and could operate the 
change at its own risk 21 days after, or upon submission of, an 
administrative amendment application, depending on the nature of the 
change. The Agency's objection opportunity would begin only upon 
submission of the administrative amendment application.
    The Agency also proposes to create a new permit revision track for 
changes having a de minimis effect on emissions. A source could 
generally operate at its own risk any change at a small unit or a small 
change at a big unit as early as the day it submits a permit revision 
application. To ensure the continuing enforceability of controls on big 
units, a small change at a big unit would qualify for de minimis 
processing only if no unauthorized changes to compliance terms were 
needed. Public and affected State notice and opportunity to challenge 
the eligibility of the change for the process would be provided after 
the change was made. The Agency would not review de minimis changes 
unless petitioned to do so. Today's notice takes comment on a range of 
possible size thresholds for defining what units and what changes would 
be eligible for de minimis change processing.
    Extensive revisions are being proposed to the current rule's minor 
permit modification provisions to create the minor permit revision 
track. Public and affected State notice and a 21-day opportunity to 
challenge the eligibility of the change for the process would be 
provided before the source could operate the change. Following the 
close of the comment period, however, the source could operate the 
change at its own risk if no commenter objected and the permitting 
authority or EPA did not act to disapprove the change by then. If a 
commenter did object, the source could operate the change starting 1 
week after the close of the comment period if the permitting authority 
or EPA did not act to disapprove the change by then. A public commenter 
whose objection was not heeded would have recourse to the courts, 
either to require the permitting authority to respond to the objection 
or to challenge the agency's rejection of it. The permitting authority 
would be required to take final action on the revision application 
within 60 days of receiving it or 15 days after EPA's 45-day review 
period had expired.
    In view of the public participation opportunities provided, the 
scope of changes eligible for minor permit revision procedures would be 
significantly expanded. Most changes that had undergone a 
preconstruction approval process that was not upgraded to part 70 
standards would be eligible for minor permit revision procedures. In 
addition, a permit shield would be authorized for all changes so 
processed.
    The current rule's significant permit modification procedures would 
remain unchanged in the significant permit revision track. However, as 
a result of the changes to the other revision procedures, the scope of 
significant permit revisions would be greatly narrowed. Changes that 
conflicted with the gatekeepers to the more streamlined permit revision 
tracks would have to be processed using significant permit revision 
procedures. For example, any change to a permit term which establishes 
an emissions limit or cap developed through a part 70-only permit 
action10 could not be made pursuant to the more streamlined tracks 
and would have to undergo significant permit revision processing. Any 
change that involved large or complex netting transactions that did not 
receive adequate prior public review would also be subject to the 
significant permit revision process.
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    \1\0The phrase ``part 70-only permit actions'' is used to refer 
to those permit actions that involve only part 70 processes, as 
opposed to actions undertaken pursuant to a preconstruction review 
process that has been upgraded to meet part 70 requirements. Part 
70-only permit actions could include establishment of early 
reductions alternative emissions limitations under section 
112(i)(5), case-by-case MACT limits under section 112(j), and 
federally-enforceable emissions caps created in a part 70 permit to 
limit a source's potential to emit in order to avoid otherwise 
applicable requirements.
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    It should be noted that the permit revision procedures set forth in 
this proposal would represent minimum requirements for permit programs. 
Permitting authorities would be free, as they are under the current 
rule, to establish revision procedures that are more stringent than 
those proposed here. Some State or local agency laws, for example, do 
not allow a source to operate a change until after it has received the 
affirmative approval of the permitting authority to do so. Those 
permitting authorities could include such provisions in their 
regulations implementing part 70.
    While EPA believes that the four-track revision process outlined 
above better matches the opportunities for public participation to the 
environmental significance of the change, it understands that a four-
track process requires sources and permitting authorities to make 
further distinctions between changes than the current three-track 
process requires them to make. The basic eligibility criteria for the 
four tracks are easy to comprehend, but the interaction of the relevant 
gatekeepers may make the task of identifying the appropriate revision 
track for a given change difficult. In section V. of this preamble are 
several flow charts that list the relevant questions to be asked in the 
proper order to ascertain what revision track applies to a particular 
type of change. While the charts do not cover all types of changes, 
they address the most common ones (e.g., major and minor NSR), and 
should assist in identifying the proper revision process for those 
changes. They also illustrate the application of and interaction 
between the various gatekeepers. The EPA solicits comments on whether 
all of the proposed gatekeepers are necessary and suggestions as to 
other ways the revision process might be simplified.
    It should also be noted that EPA is considering, and soliciting 
public comment on, a variation on the revision tracks just described 
that would provide for more flexible treatment of changes to compliance 
monitoring permit terms. At the end of the ``Permit Revision'' section 
of this preamble, EPA delineates this alternative approach to changes 
in compliance monitoring terms. The Agency developed this approach 
after the close of its discussions about the flexibility provisions 
with the permits case litigants. It is therefore presented separately. 
At the same time, EPA believes the alternative approach to changes in 
compliance monitoring terms better matches the significance of 
potential changes with the amount of public process required. For 
instance, under the proposal just described, the de minimis permit 
revision process could be used to change any compliance monitoring term 
associated with a change at a small unit, but could not be used to 
change any compliance monitoring term associated with a de minimis 
change at a big unit, unless the change had been previously approved in 
a process involving substantially more public, affected State, and EPA 
participation. The alternative subsequently described, however, would 
allow specified types of changes to compliance monitoring terms to be 
made pursuant to de minimis permit revision procedures. The overall 
effect of the alternative would be to partially limit the types of de 
minimis changes that could be made at small units but significantly 
expand the types of de minimis changes that could be made at big units.
    The proposed permit revision tracks first discussed in this 
preamble should thus be viewed as representing one approach to changes 
in compliance monitoring terms; the latter section of the preamble 
presents another. The Agency solicits comment on the relative costs and 
benefits of the two approaches. It should also be pointed out that the 
flow charts mentioned above reflect the first approach to changes in 
compliance monitoring terms. They would have to be changed if EPA 
adopted the alternative approach later described.
3. Administrative Amendments
    a. Current Administrative Amendment Procedures.-- (1) Scope. 
Currently, part 70 allows three categories of changes to be processed 
under the administrative amendment procedures of Sec. 70.7(d). The 
first category of changes is generally clerical in nature. It includes 
correction of typographical errors; changes in the name, phone number, 
or address of persons identified in the permit; and changes in 
ownership if no other change is necessary and certain conditions are 
met concerning transfer of ownership. The second category includes 
increases in the frequency of required monitoring or reporting. Other 
changes similar to the ones just described may also be made as 
administrative amendments if the permitting authority receives 
authorization from EPA to treat them as such at the time of program 
approval.
    The third category of changes that existing part 70 classifies as 
an administrative amendment includes requirements of a NSR permit, 
provided the NSR program under which the permit was issued meets 
procedural requirements substantially equivalent to those of Secs. 70.7 
and 70.8 of the rule and provides for compliance requirements 
substantially equivalent to those of Sec. 70.6. A NSR program is termed 
``enhanced'' if it meets all of these requirements.
    Section 70.7(d) also provides that acid rain sources are governed 
by any administrative amendment procedures promulgated under title IV.
    (2) Process. The current part 70 administrative amendment process 
is uncomplicated. The permitting authority must take final action 
within 60 days after receiving a request from a source for an 
administrative amendment, and may incorporate the requested change in 
the existing part 70 permit without providing notice to the public or 
affected States, but must submit a copy of the revised permit to EPA. 
The source may implement the requested change immediately upon 
submitting a request. The permitting authority may provide a permit 
shield only to administrative amendments incorporating ``enhanced'' NSR 
permit requirements.
    b. Proposed Administrative Amendment Procedures.-- (1) Scope. 
Today's proposal retains the provisions of the current rule at 
Secs. 70.7(d)(1)(i-iv) allowing certain clerical changes, changes that 
result in more frequent monitoring and reporting, and changes of 
ownership or operational control to be made as administrative 
amendments. Also retained is the provision allowing State or local 
permit programs to establish other changes similar to those in 
Secs. 70.7(d)(1)(i-iv) provided they are approved by EPA.
    In addition, the proposed revisions would allow changes that 
undergo a ``merged'' part 70/NSR or part 70/section 112(g) process to 
be incorporated into the part 70 permit as administrative amendments. 
To be merged, a part 70/NSR or part 70/section 112(g) review process 
would have to address and comply with the permit application and 
content requirements of both part 70 and NSR or section 112(g) 
programs, and provide for certain minimum elements of public process. 
These elements are:
    (i) Prior (i.e., preconstruction) notice to the public, EPA, and 
affected States of proposed NSR or section 112(g) actions;
    (ii) A public comment period of at least 30 days for major NSR or 
section 112(g) actions, and for minor NSR changes, as many days as 
required by the State or local agency's existing minor NSR regulations 
as of November 15, 1993, but not less than 1511); and
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    \1\1However, for any minor NSR change that involved a netting 
transaction that included any single emissions increase that is 
greater than applicable significance levels or a sum of increases 
greater than applicable major source levels, a public comment period 
of at least 30 days would have to be provided. This qualification is 
needed to ensure consistency between the proposed procedures for 
administrative amendments and minor permit revisions (subsequently 
described in this preamble).
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    (iii) An opportunity for a public hearing for major modifications 
under part C or part D of the Act.
    The public comment period, and hearing if required, would occur 
prior to any permitting authority approval for the source to construct. 
However, unlike the current rule, EPA's opportunity to object to the 
change would not need to be provided prior to construction or 
modification of the source. Rather, EPA's opportunity to object could 
occur at the time the source applies for the administrative amendment. 
A permitting authority or source would remain free to provide for EPA's 
objection opportunity to occur prior to construction, if it preferred 
not to run the risk of EPA's objecting to the change after 
construction. Today's proposal uses the term ``merged'' to refer to a 
part 70/NSR or part 70/section 112(g) process that meets the 
requirements set forth above, to distinguish it from one meeting the 
current rule's requirements for ``enhanced'' NSR, which includes a 
preconstruction EPA objection opportunity.
    Permitting authorities could also obtain approval from EPA in their 
part 70 programs to conduct merged processing on a case-by-case basis. 
That is, permitting authorities could be authorized to provide merged 
process for all or some of their preconstruction determinations or to 
allow sources to elect merged process for only individual changes. 
State and local agencies that provided merged process on only a case-
specific basis would be required to state when they were doing so in 
the initial notification of the permit action sent to EPA.
    Under both the current part 70 and the proposed revisions, State 
and local part 70 programs must provide adequate, streamlined, and 
reasonable procedures for expeditious review of permit revisions 
(Sec. 70.4(b)(13)). A permitting authority that wished to provide for 
merged NSR changes would, therefore, have to set out the eligibility 
criteria and process for merged NSR changes in its part 70 program. 
Depending on existing State or local statute or regulatory provisions, 
no changes would be required to existing State or local NSR programs. 
The EPA solicits comments, however, on whether changes in a State or 
local agency's policies or procedures (as opposed to regulations) would 
be sufficient to provide for merged processing in their part 70 
program.
    Finally, EPA wishes to make clear that a merged NSR program could 
be one which totally integrates the preconstruction and part 70 review 
requirements into a single permit system. That is, a part 70 permit 
under such a system could be revised through an operating permit 
revision process that is integrated with the preconstruction review 
process resulting in a single permit containing both preconstruction 
and operating permit terms and conditions, rather than a merged NSR 
process followed by an administrative amendment process to incorporate 
the change into the separately existing part 70 permit. Such an 
integrated approach would be allowable under today's proposal in that 
NSR determinations as well as NSR permit terms and conditions could be 
incorporated administratively into a part 70 permit after EPA's 
objection period had ended.
    (2) Process for All Administrative Amendments. For all changes that 
qualify as administrative amendments, the following procedures would be 
used. First, the source would submit to the permitting authority an 
application for an administrative amendment. The application would 
include a description of the change and supporting information as 
necessary to allow the permitting authority to review the request. The 
application would also contain a demonstration and a certification that 
the change is eligible for the administrative amendment process and a 
proposed addendum to the permit reflecting the new permit terms that 
would apply as a result of the change. The addendum would specify that, 
unless disapproved, it is effective 60 days from the date the 
permitting authority received the request.12
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    \1\2States could provide in regulations or guidance when 
requests would be deemed received, given the particular manner and 
timing of submissions. For instance, a State could provide that 
requests submitted by telefax are deemed received the same day the 
transmission occurs, so that 60 days from the date of receipt would 
be the same as 60 days from the date of submission.
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    In its part 70 program, the permitting authority may authorize a 
source, at its own risk, to operate the change in compliance with the 
terms of the proposed addendum after submitting its request. The 
addendum would be incorporated into the permit if the permitting 
authority did not disapprove the administrative amendment request 
within 60 days after receipt. The permit would be amended by attaching 
the proposed addendum to the permit. A copy of the addendum would then 
be provided to EPA. Any administrative amendment to the permit would be 
designated as such. No permit shield would be available for changes 
qualifying as administrative amendments under Secs. 70.7(e)(1) (i)-
(iv).
    (3) Process for Merged Program Changes. Changes that had undergone 
merged part 70/NSR or part 70/section 112(g) procedures would generally 
follow the process just outlined for administrative amendments with 
some important additional steps reflecting the greater environmental 
significance of these changes. First, the source would be required to 
submit with its application an affidavit acknowledging that if it 
operates the change before its permit is revised, it may be liable for 
violating the terms of its existing permit in the event that its 
revision request is denied. (An affidavit would be required only for 
merged program changes because they would typically involve significant 
changes to substantive permit terms.) Second, the source would submit 
to EPA, as well as the permitting authority, a copy of the 
administrative amendment request, including the proposed addendum. For 
major NSR and section 112(g) changes, the source would be required to 
wait at least 21 days after EPA receives the request13 or 21 days 
after the permitting authority makes its NSR or section 112(g) 
determination, whichever is later,14 before operating the change 
at its own risk. For all other changes (i.e., minor NSR), the source 
could operate the change at its own risk under the proposed addendum on 
the day EPA receives the request, except where this process would be 
prohibited by applicable requirements.15 The EPA would have 45 
days from receipt of the request (or 45 days from the day the 
permitting authority makes its NSR or section 112(g) decision, 
whichever is later) to object to the change.
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    \1\3The EPA would provide in regulations or guidance when 
requests would be deemed received based on the manner and timing of 
submissions.
    \1\4In this description of a merged process, EPA's objection 
opportunity begins only after the permitting authority has completed 
its NSR or section 112(g) review. This is not meant to preclude the 
possibility of EPA's objection opportunity running during 
preconstruction review by the permitting authority. Any parallel 
processing procedures established by the permitting authority should 
provide that EPA's review period extends 30 days beyond the close of 
the public comment period to afford EPA the opportunity to take 
timely comments into account.
    \1\5In the case of delegated PSD programs, for example, where a 
public comment has been received, applicable regulations prohibit 
sources from commencing construction before a specified amount of 
time has passed following issuance of the State preconstruction 
permit. This delay enables appeal to the Environmental Appeal Board 
on the issue raised by the commenter (40 CFR 124.19).
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    The proposed addendum would be incorporated into the permit if EPA 
had not objected to it within its 45-day review period. The addendum 
would specify that it is effective 45 days from the date EPA received 
the request unless EPA objected to it by then. For merged process 
changes incorporated as administrative amendments, the permit shield 
would be available.
    (4) Liability for Making Changes Before the Permit is Renewed. As 
already noted, the proposed administrative amendment procedure would 
authorize a permitting authority to allow a source to begin operation 
of the change prior to its permit being revised. However, if the 
source's request for an administrative amendment (e.g., for a merged 
program change) were disapproved, the source would be liable for 
violating its existing permit from the time it began to operate the 
change. Rather than disapprove the request, however, the permitting 
authority could in some cases revise a request without necessarily 
rendering the source liable for violating its existing permit. So long 
as (1) the permitting authority's revisions were not necessary to make 
the request eligible for administrative amendment procedures and did 
not change the source's proposed determination of which applicable 
requirements it must meet as a result of the change, and (2) the source 
could demonstrate its compliance with proposed permit terms using 
reasonably available means, the permitting authority would be 
authorized to determine that its revisions did not render the source 
liable for violating its existing permit.
    c. Rationale for Proposed Revisions.--(1) Scope. The proposed 
revisions generally build upon the current part 70 provisions that 
allow NSR permit terms or section 112(g) actions to be incorporated 
through the administrative amendment process if the State or local 
agency's NSR or section 112(g) program is ``enhanced.'' The theory 
behind these provisions is that the public, affected States, and EPA 
need only one opportunity to review a change prior to its incorporation 
into a part 70 permit. So long as the NSR or section 112(g) process 
offers an adequate opportunity for the public, affected States, and EPA 
to address part 70 as well as NSR or section 112(g) issues, title V's 
procedural safeguards are fulfilled. Changes that undergo enhanced NSR 
or section 112(g) review may thus use the most streamlined (i.e. 
administrative amendment) procedures for incorporation into the part 70 
permit.
    Industry petitioners in the permits case challenged the current 
rule's requirement that preconstruction review programs be enhanced for 
changes made pursuant to those programs to be incorporated into part 70 
permits as administrative amendments. They argued that the only issue 
posed by the incorporation of NSR changes into part 70 permits is 
whether the change is being accurately recorded in the permit. The 
Agency does not agree. Title V independently requires that all part 70 
permit terms be enforceable. Thus, part 70 requires that permitting 
authorities include in permits supplemental compliance monitoring terms 
where needed. Given the importance of compliance monitoring terms and 
the fact that these types of terms often require the exercise of 
permitting authority discretion, some public review of these terms is 
important. Relatedly, part 70 imposes application and other permit 
content requirements that other preconstruction review programs do not 
necessarily meet. Assurance that these requirements are met at least 
during the part 70 permitting process also warrants public review.
    Enhancement under the current rule offers permitting authorities 
the opportunity to combine the operating permit and NSR or section 
112(g) programs and thereby avoid sequential permitting. The current 
rule, though, requires that an enhanced program subject proposed NSR or 
section 112(g) actions to a 45-day opportunity for EPA objection prior 
to the final NSR or section 112(g) determination being made. While this 
requirement avoids the possibility of a source constructing a change 
pursuant to a preconstruction determination only to have EPA object to 
its operation, it does so at the cost of potentially lengthening the 
preconstruction review process by 45 days.16
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    \1\6The potential for delay under the current rule is greatest 
in the case of minor NSR actions subject to expedited procedures 
under existing SIP programs. Providing a 45-day EPA objection 
opportunity following issuance of the draft permit but before 
construction could begin would, in many instances, delay issuance of 
the final approval to construct beyond the date when such approval 
would have been granted in the absence of a preconstruction EPA 
objection opportunity. In the case of major NSR and section 112(g) 
actions, however, it is not clear that deferring EPA's objection 
opportunity would expedite the permitting process. This is because 
the time needed to respond to comments received during the required 
30-day comment period and, in many instances, public hearing, and to 
perform the other tasks necessary to reach a final decision on these 
more complex and environmentally significant actions, historically 
has required (in the case of major NSR) and likely will require (in 
the case of section 112(g) actions) more than 45 days, even in those 
cases where EPA's objection opportunity commences after the 30-day 
comment period.
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    The Agency is proposing to allow EPA's objection opportunity to 
follow the final NSR or section 112(g) action to give permitting 
authorities greater flexibility in merging their NSR and operating 
permit programs. A permitting authority could still provide for an EPA 
objection opportunity prior to a final NSR and section 112(g) 
determination. It would have the option, however, of allowing a source 
to act on a NSR determination and become subject to a potential EPA 
objection only at the time it files an application for an 
administrative amendment to its part 70 permit. The source could 
thereby avoid the possibility of being unnecessarily delayed by an EPA 
review period, although at the risk of an EPA objection after 
construction. Like the current rule, however, the proposal would 
require that EPA receive prior notification of, and an opportunity to 
comment on, every NSR or section 112(g) action. As a result of EPA 
involvement in the earlier preconstruction action, the source would 
likely learn of any EPA objection to its requested change prior to 
construction.
    The Agency expects that, given this additional flexibility, every 
State and local permitting agency would at least merge its major NSR 
program with its part 70 program. As required by current EPA 
regulations, virtually every State provides public and EPA notice, a 
30-day comment period, and an opportunity for a public hearing prior to 
making final major NSR determinations. To merge its existing major NSR 
program with its part 70 program, a permitting authority need only 
assure that affected States receive notice at the same time as the 
public and EPA, that part 70 permit application and content 
requirements are met, and that EPA is provided with an objection 
opportunity when a source applies for an administrative amendment. The 
EPA thus expects that under the revised rule, all major NSR actions 
would be incorporated into part 70 permits through administrative 
amendments.
    Permitting authorities may also find it advantageous to merge their 
minor NSR programs with their part 70 programs. At least some State and 
local agency minor NSR programs already provide public review 
opportunities equivalent to those that would be required under today's 
proposal (i.e., prior notice and at least 15 days of public comment). 
For those agencies, merging minor NSR as well as major NSR with part 70 
would be relatively straightforward. Most State or local minor NSR 
programs, however, do not provide the requisite public process. These 
agencies would have the option of upgrading their current programs to 
part 70 standards so minor NSR changes would be treated as 
administrative amendments to part 70 permits. To the extent a 
permitting authority did not want to merge its programs for all 
permitting actions, the proposal would allow it to follow merged 
procedures on an ad hoc basis when the source requests such processing. 
Those changes that did not undergo a merged process would be 
incorporated into part 70 permits through the other permit revision 
processes (i.e. de minimis, minor, and significant permit revision 
procedures). These procedures would provide for public process, the 
timing and amount depending on the size and nature of the change.
    Today's proposal would have the effect of requiring that all minor 
NSR changes receive some level of public notice before their final 
incorporation into a part 70 permit. As discussed, if the State or 
local minor NSR program includes public participation requirements 
meeting the ``merged'' program criteria set out above, the change could 
be incorporated into the part 70 permit through the administrative 
amendment track. On the other hand, if the minor NSR change did not 
receive sufficient public process during the permitting authority's 
processing of the action to meet the requirements for a merged program, 
it would face a public participation requirement as part of the part 70 
process. In requiring public process for all minor NSR permitting 
actions by permitting authorities, this proposal is adding process 
steps that in some cases may not be required by the underlying minor 
NSR program.
    The EPA's regulations governing these State or local programs 
require that permitting authorities establish ``legally enforceable 
procedures'' that ``enable the State or local agency to determine 
whether the construction or modification'' of a source violates the 
State or local agency's ``control strategy'' or interferes ``with 
attainment or maintenance of a national standard'' in the State or 
local agency area of jurisdiction or in a neighboring State (see 40 CFR 
51.160(a)). These procedures ``must also require that the State or 
local agency provide opportunity for public comment,'' which is 
specified to include notice to the public, EPA, and to surrounding 
States, of the source's project and the permitting authority's analysis 
and proposed decision, as well as a 30-day comment period (or a shorter 
time where approved by EPA) (see 40 CFR 51.161).
    However, EPA's regulations also contemplate that this review 
program will not extend to every source if the permitting authority 
provides a reasoned explanation for any exclusions. Specifically, the 
permitting authority must ``identify types and sizes of facilities, 
buildings, structures, or installations which will be subject to 
review'' and directs that the plan discuss ``the basis for determining 
which facilities will be subject to review'' (see 40 CFR 51.160(e)). 
This last provision is intended to allow permitting authorities to 
exclude from State or local NSR sources that have negligible impacts on 
air quality. Any such exclusion must be justified on de minimis or 
administrative necessity grounds in accordance with the doctrine of 
Alabama Power Co. v. Costle, 636 F.2d 323,355-61 (D.C. Cir. 
1979).17 Consistent with this result, authorities may also 
determine that sources or source activities that could otherwise be 
totally exempted pursuant to this provision may be subject to a partial 
exemption, for instance from all or part of the public notice 
requirements, upon the same showing that the excluded category is not 
environmentally significant, or a similar but more limited showing that 
the value of public participation regarding that category would provide 
negligible benefits or would be administratively impractical.
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    \1\7As noted, section 160 is a direct descendent of EPA's first 
new source review regulations implementing the Clean Air Act 
Amendments of 1970 and predates the existence of the major new 
source review programs under parts C and D of the Act. As proposed, 
these original regulations provided that States could exclude 
sources ``of minor significance'' (see 36 FR 6680, 6688 (April 7, 
1971) proposed rule). While the explicit requirement that States 
adopt a permit program to implement NSR procedures was eliminated 
from the final rule (see 36 FR 15486 (August 14, 1971)), most States 
responded to EPA's regulations by in fact adopting stationary source 
permitting programs for new and modifying sources including 
exclusions for insignificant sources. Because of concerns that these 
exclusions were too broad, EPA several years later clarified its 
regulations to specify that States must in the plan describe the 
``types and sizes'' of sources subject to the exclusion and provide 
the basis for this determination (see 38 FR 15834, 15836 (June 18, 
1973)). Since that time, the decision in Alabama Power has provided 
judicial guidance on the circumstances in which such exclusions may 
be granted, making it clear that States' ability to adopt, and EPA 
to approve, exemptions from statutory requirements is limited.
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    In fact, many State and local agencies have adopted minor NSR 
programs that either exclude certain types of source changes 
completely, or excludes them from some or all of the public 
participation requirements. These exclusions have been approved by EPA 
and are included in the agencies' current SIP's. Arguably, valid 
exceptions in a State or local agency minor NSR program should carry 
over to part 70 since, as described above, the public participation 
requirement of title V also does not extend to environmentally 
insignificant actions. Thus, under this theory, part 70 could allow the 
incorporation through the administrative amendment track of minor NSR 
changes that have not been subject to public notice and comment in 
accordance with a valid exemption in the State or local minor NSR 
program.
    Adoption of existing State or local exclusions from public process 
raises several issues, however. First, existing exemptions may not all 
be appropriate given that many State or local programs were adopted and 
approved into SIPs by EPA in the early 1970's prior to the adoption of 
the public participation requirements of 40 CFR 51.161, and that the 
environmental significance of these exclusions has since changed. For 
instance, the use of minor NSR to provide federally-enforceable limits 
on a source's potential to emit in order to avoid the major NSR 
programs in parts C and D of title I was not a consideration at that 
time, since these programs were not added until the Act was amended in 
1977. Also, this approach would require State and local agencies to 
review and possibly revise their minor NSR permitting programs at the 
same time that they are faced with adopting and implementing a part 70 
program. For these and other reasons, today's proposal establishes 
minimum public process requirements for all minor NSR changes without 
regard to the validity of existing State or local exclusions.
    The EPA, however, solicits comment on the question of whether State 
or local minor NSR process exclusions can and should carry over into 
the part 70 permit revision process. For instance, EPA could allow 
permitting authorities to demonstrate, as part of their program 
revisions in response to the revised part 70 permit revision 
procedures, that their existing minor NSR exclusions cover only 
environmentally insignificant actions. To the extent a permitting 
authority made the required demonstration, minor NSR actions eligible 
for an exclusion could be incorporated into part 70 permits as 
administrative amendments, without having undergone a merged part 70/
minor NSR process. Alternatively, a permitting authority might seek to 
demonstrate that a portion of the minor NSR exclusions should pass 
through to its part 70 program. The EPA is especially interested in 
receiving comments on this issue from permitting authorities with 
inclusive minor NSR programs that rely on exclusions to limit the 
delays and costs associated with their programs.
    With regard to today's proposal for merged programs, since there 
would be affirmative NSR approval and public review of merged actions, 
EPA does not see a clear need for any (and has not proposed any) 
limitations on the use of administrative amendment procedures for 
merged part 70/NSR and part 70/section 112(g) actions. However, the 
Agency solicits comment on whether sources should be allowed to use the 
merged process to change a requirement uniquely established in the part 
70 permit, such as an early reduction limit under section 112(i) of the 
Act or an emissions cap to avoid an otherwise applicable requirement. 
Without a limitation on this use of merged procedures, a source could 
seek a change to part 70 permit-unique emissions limits in the context 
of a merged State or local NSR or 112(g) action and have the change 
incorporated into the part 70 permit as an administrative amendment. 
The EPA notes that such a limitation is proposed for both the de 
minimis and the minor permit revision processes.
    (2) Process for All Administrative Amendments. The Agency's 
proposed minor changes to the current rule's administrative amendment 
process should provide additional safeguards and streamlining. 
Specifically, the proposed requirement that the source demonstrate and 
certify that the change is eligible for the administrative amendment 
process should increase the likelihood that the source is properly 
invoking this most streamlined process. The proposal to require the 
source to submit a proposed permit addendum and to no longer require 
the permitting authority to affirmatively act to revise the permit 
should help streamline the process. The current rule was challenged by 
States as unnecessarily forcing permitting authorities to act 
affirmatively on changes of extremely low environmental significance 
and diverting limited resources away from higher priorities. The Agency 
is therefore proposing to allow the requested change to be deemed 
granted 60 days after the permitting authority's receipt of an 
administrative amendment request (45 days from EPA's receipt, in cases 
of merged program changes), unless the permitting authority (or EPA) 
disapproves the change by then. The permit would be amended by simply 
attaching to the permit the addendum previously submitted as part of 
the application for the administrative amendment and as potentially 
revised by the permitting authority.
    The proposal, like the current rule, provides no public process, 
opportunity for affected State review, or opportunity for EPA objection 
for the first four types of administrative amendments listed in the 
regulations. The EPA believes, and there has been no dispute, that 
exempting these types of clerical changes from the statute's 
requirements for public process, affected State review, and EPA 
objection opportunity is well within the Agency's power to grant de 
minimis exemptions under Alabama Power.
    For merged program changes, EPA believes that the proposal, again 
like the current rule, legitimately relies on the public process 
afforded by merged NSR/operating permit programs to discharge title V's 
notice and comment requirements. The Agency acknowledges that its 
proposed requirements for merged programs do not include an opportunity 
for a public hearing except where otherwise required by the NSR 
program. The Agency sees little point in requiring a hearing for part 
70-only purposes for a change that has already undergone public notice 
and comment procedures that meet part 70 requirements. Given the 
potential number of merged program changes, EPA is also concerned that 
providing a hearing for them would be infeasible for permitting 
authorities. In light of the small incremental benefit that public 
hearings would afford and the likely administrative impracticality of 
providing them for merged program changes, the Agency believes it may 
exempt merged program changes from the statute's public hearing 
requirement.
    (3) Additional Process for Merged Program Changes. For merged 
program changes, a few additional procedural requirements are proposed 
to account for the potential change in timing of EPA's objection 
opportunity. For those permitting authorities that opt to begin EPA's 
objection opportunity at the time a source submits its administrative 
amendment application, instead of during preconstruction review, the 
source would be required to submit a copy of its application to EPA. 
For those permitting authorities that authorized the source to begin 
operation of the change prior to the expiration of EPA's objection 
opportunity, the source would also be required to submit with its 
application an affidavit acknowledging its potential liability if it 
operates the change before its permit is revised. The purpose of the 
affidavit would be to ensure that the source and the courts understand 
that a source operates a change prior to permit revision at its own 
risk. (See explanation of liability provisions of administrative 
amendment procedures below.) Further, the Agency is proposing that a 
source wait 21 days after submitting its amendment request before 
operating a major NSR or section 112(g) change to give EPA the 
opportunity to object to these more significant types of changes before 
they are operated. It solicits comments, however, on the need for, and 
cost of, the proposed 21-day waiting period for operation of major NSR 
and section 112(g) changes.
    (4) Liability for Making Changes Before Permit is Revised. As 
indicated above, EPA is retaining the aspect of the current rule's 
administrative procedures that allows a source to operate the change 
for which it seeks an administrative amendment before its permit has 
been amended. Indeed, EPA is proposing to similarly allow a source to 
operate changes qualifying for the de minimis and minor permit revision 
procedures before its permit is revised. Assuming, however, that the 
source could not operate the change without violating an existing 
permit term, its operation of the change would violate the section 
502(a) prohibition against operating in violation of its permit.
    For the reasons set forth in the preamble to the current rule and 
briefly restated below, the Agency believes it may exercise its 
authority to grant de minimis exemptions from statutory provisions to 
allow permitting authorities to temporarily exempt sources from the 
section 502(a) prohibition under certain circumstances. For a change 
that poses relatively small environmental risk as a result of its 
nature, size, or prior review by permitting authorities, the Agency 
believes the source may be allowed to operate the change before its 
permit is revised, so long as the source undertakes the risk of being 
found in violation of the original permit from the time it makes the 
change if its request to revise the permit is ultimately denied. (The 
source must also comply with the terms of its proposed permit 
revision.) Placing a source at risk for operating a change before its 
permit is revised gives the source a powerful incentive to correctly 
assess and account for the effect of the change on its compliance with 
applicable requirements. This incentive in turn lowers the risk of a 
source not complying with applicable requirements before its permit is 
revised, rendering the incremental effect of the section 502(a) 
prohibition on source compliance de minimis.
    The litigants in the permits case generally agreed that a source 
should be allowed to make certain changes prior to permit revision at 
its own risk. Industry representatives were concerned, however, about 
the situation where the permitting authority believes that a source's 
proposed revision is largely approvable, but nevertheless requires 
relatively minor changes to, for instance, the proposed recordkeeping 
and reporting provisions. They feared that the need to make even small 
changes might mean that the proposed revision was not approvable and 
that the source would therefore be liable for having operated the 
change in violation of its existing permit.
    In response to industry's concern, the litigants agreed that the 
permitting authority should have authority to make relatively minor 
alterations to a proposed permit revision, approve the revision as 
altered, and thereby avoid subjecting the source to liability for any 
violations of its existing permit. To maintain a source's incentive to 
correctly assess and implement its proposed change, however, the 
permitting authority's discretion to correct deficient proposals for 
permit revisions must be limited. The Agency is therefore proposing two 
criteria for defining the alterations that a permitting authority may 
make to a proposed revision without rendering the source liable for 
operating the change: (1) the change is unnecessary to make the 
revision request eligible for the streamlined process the source has 
undertaken to use; and (2) the change is unnecessary to correct the 
source's identification of the applicable requirements it must meet. 
The first criterion would dissuade a source from attempting to use a 
more streamlined procedure than it qualifies for, while the second 
would maintain the source's incentive to correctly assess and comply 
with the requirements that apply to it as a result of its requested 
change.
    The enforceability of proposed permit terms must also be 
safeguarded. If a permitting authority were allowed to broadly correct 
deficient proposals, a source might be tempted to not include adequate 
compliance monitoring terms in its proposed revision. The ability to 
operate the change before the permit is revised would allow the source 
to at least temporarily trade an enforceable requirement for an 
unenforceable one. However, industry is concerned that sources may find 
it increasingly difficult to confidently predict what monitoring 
requirements permitting authorities may impose. The current rule 
requires that permitting authorities supplement the monitoring required 
by regulations establishing applicable requirements to the extent 
necessary to determine a covered source's compliance with those 
requirements. The Agency's proposed enhanced monitoring rule (58 FR 
54648 (October 22, 1993)) would also require permitting authorities to 
impose supplemental monitoring requirements where needed. Particularly 
under the enhanced monitoring rule, if issued as proposed, industry 
foresees that many monitoring decisions will be made on a case-specific 
basis and thus be very difficult to predict. Industry is concerned that 
permitting authorities may often see fit to make some changes to the 
monitoring terms that a source has included in its proposed revision. 
If a permitting authority is unable to make those changes without 
rendering the source liable for violating its existing permit, industry 
contends that the utility of the current and proposed rules' provisions 
for operation of changes before permit revision will be largely lost.
    The Agency acknowledges that sources may face some short-term 
uncertainty regarding what constitutes adequate compliance terms under 
the operating permit and enhanced monitoring rules. It is therefore 
proposing that a decision by the permitting authority to require 
different monitoring not automatically render the source in violation 
of its existing permit because it failed to monitor its proposed change 
in the manner ultimately specified by the permitting authority. So long 
as the source using reasonable available methods demonstrates 
compliance with the proposed terms incorporating applicable 
requirements, the permitting authority could find the source not in 
violation of its existing permit. The Agency is proposing that the 
permitting authority be the judge of the adequacy of the source's 
compliance monitoring to avoid that becoming an issue in enforcement 
actions.
    The Agency solicits comment on all aspects of the proposal to allow 
the permitting authority to approve proposed permit revisions with 
minor supplemental alterations and to limit source liability for 
operation of changes prior to permit revision that are subsequently 
altered. In particular, EPA solicits comment on the practical extent 
and nature of the risk posed by potential source liability for 
operating the change, whether relief from liability is necessary and 
appropriate in some or all of the revision tracks for which it has been 
proposed, and the efficacy of reliance on State, local, and Federal 
enforcement discretion to address industry concerns in lieu of the 
proposed approach.
4. De Minimis Permit Revisions
    As noted above, the current rule does not include a permit revision 
track analogous to the de minimis permit revision track proposed today. 
The Agency is proposing the addition of this track for changes that did 
not undergo merged program review but have only a small emissions 
impact. Under this track, a source would be able to operate the change 
as early as the day it submits its permit revision application. Public 
review of the change would follow and EPA review and objection 
opportunity would not occur except in response to a public petition. 
The Agency believes that many, typically minor NSR, changes involve 
small changes in emissions. Requiring these changes to undergo the more 
extensive public procedures required for minor permit revisions would 
almost certainly overwhelm State permitting authorities and is not 
justified given their small environmental impact.
    a. Overview of Proposal. Under the proposed rule, a source could 
operate a de minimis change 7 days after submitting its application for 
a permit revision to the permitting authority or as early as the day it 
submits its application if the permitting authority so allows. Similar 
to the requirements for merged program changes, the source's 
application would be required to include a proposed addendum for 
revising the permit to reflect the change, a demonstration and 
certification that the change is eligible for the de minimis change 
track, and an affidavit accepting the risk of operating the change 
before its permit is revised.
    Public notice of de minimis changes would occur on a monthly, 
batched basis after the changes could have been made. In other words, 
all of the de minimis changes for which the permitting authority had 
received applications in a given month would be listed together in a 
public notice issued the following month. For a specified period of 
time after public notice is given, citizens would have the opportunity 
to petition the permitting authority to disapprove the change. Grounds 
for objection would include a change's ineligibility for the de minimis 
permit revision process or its inconsistency with applicable 
requirements. If the permitting authority failed to respond to any 
objections by the end of that period and did not otherwise disapprove 
the permit revision request, the proposed permit addendum would take 
effect. A person who was unsuccessful in persuading the permitting 
authority to disapprove the change could petition EPA to do so.
    Unlike the other revision tracks proposed today, the permitting 
authority would have discretion regarding whether and to what extent to 
allow any particular source to make changes via this process. The 
permitting authority would include in the source's draft permit a term 
describing the extent to which it could use the de minimis permit 
revision process, and the public would have the opportunity to comment 
on that permit term. The proposed rule, however, would not establish 
criteria for final permitting authority decisions regarding whether to 
include such a permit term in a source's permit and the scope of that 
term (within the limits specified below).
    The scope of de minimis changes would be defined in two ways. Any 
change at a small unit (unit-based de minimis) would qualify, as would 
a small change at a big unit (increment-based de minimis) provided 
certain conditions designed to ensure the enforceability of the 
resulting permit limit were met. The Agency is soliciting comment on a 
range of values for defining ``small'' for the purpose of these 
procedures.
    b. Scope of Unit-Based De Minimis Revisions. Unit-based de minimis 
changes would include the addition of any new unit, and the 
modification of any existing unit, whose permit allowable emissions 
(after the change in the case of modifications) did not exceed the 
unit-based de minimis thresholds. In other words, the new unit or the 
existing unit after the de minimis change could not have a potential to 
emit greater than the unit-based threshold. Inter-unit netting could 
not be used to avoid exceeding the de minimis threshold.
    (1) Proposed Thresholds. For criteria pollutants, EPA proposes a 
range of four possible threshold levels,18 as well as a provision 
that would allow a permitting authority to develop alternative 
threshold levels for its own jurisdiction. For the final rule, EPA 
would select a level from the range or include the provision for a 
permitting authority-determined level, or both. The four proposed 
criteria pollutant threshold levels are as follows:
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    \1\8These levels (and any others representing a cutoff for de 
minimis permit revision eligibility) would not require that an 
emissions cap be established in the part 70 permit as part of the 
process. Calculations relative to the threshold level would be made 
on the basis of increases in potential to emit and would accompany 
the source's request for processing as a de minimis permit revision.
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    (i) 4 tons per permit term (tppt)19 carbon monoxide (CO), 1 
tppt NOX, 1.6 tppt sulfur dioxide (SO2), 0.6 tppt PM-10, and 
1 tppt VOC;
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    \1\9``Tons per permit term (tppt)'' refers to a level that could 
not be exceeded over the remaining life of the permit (up to 5 
years). Once the threshold were met, no more de minimis permit 
revisions could be made during that term of the permit. For example, 
a threshold of 4 tppt would allow one change of 4 tons during the 
permit term, or 2 changes of 2 tons each, or any number of small 
changes that totalled 4 tons over the life of the permit.
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    (ii) 5 tpy (for any criteria pollutant);
    (iii) 20 percent of the applicable major source threshold or 5 tpy 
VOC or NOX (whichever is greater) or 15 tpy PM-10 or 0.6 tpy 
lead20 (whichever is less)21;
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    \2\015 tpy PM-10 and 0.6 tpy lead are the significance levels 
under the PSD program for these pollutants.
    \2\1For example, if the major source threshold were 100 tpy for 
all criteria pollutants, then 20% of major source thresholds would 
be 20 tpy and the formula would take the greater of 20 tpy or 5 tpy 
for VOC or NOX. For PM-10, it would take the lesser of 20 tpy 
or 15 tpy, and for lead it would take the lesser of 20 tpy or 0.6 
tpy. Thus, the formula would yield values of 20 tpy VOC, 20 tpy 
NOX, 15 tpy PM-10 and 0.6 tpy lead. If the major source 
threshold were 10 tpy VOC and NOX, 70 tpy PM-10 and 100 tpy 
lead, the values would be 5 tpy VOC or NOX (greater of 2 tpy or 
5 tpy), 14 tpy PM-10 (20% of 70 tpy) and 0.6 tpy lead.
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    (iv) 30 percent of the applicable major source threshold or 5 tpy, 
whichever is greater.
    Some have suggested that thresholds higher than the ones proposed 
would be appropriate, including major title I modification levels for 
criteria pollutants. The EPA solicits comment as to the appropriateness 
of higher levels, as well as submission of data that would support 
higher thresholds in the final rule.
    As noted above, EPA also proposes to allow any permitting authority 
to establish alternative unit-based threshold levels based on a 
demonstration it would be required to make as specified below. The 
threshold levels would be pollutant-specific and would be based on 
total emissions from units after the changes were made. The permitting 
authority would have to submit to EPA for approval the demonstration, 
including the calculations upon which the unit-based threshold levels 
were based.
    To establish a specific threshold, a permitting authority would 
have to submit historical data that would (a) document the aggregate 
amount of emissions (i.e., total emissions after the change) from all 
units subject to the State or local SIP-approved NSR program over a 
representative period of time (e.g., previous 2 years) and (b) 
demonstrate that all units above the proposed cut-off for unit-based de 
minimis changes represent at least 80 percent of emissions subject to 
NSR. The EPA would place this data in the rulemaking record when 
determining approvability of the part 70 program. (Data of this sort 
from New Jersey is in the docket of today's rule.) Potentially, the 
levels established by the permitting authority could be larger than the 
national levels ultimately promulgated.
    As an example of how threshold levels could be established, if a 
permitting authority demonstrated that (1) emissions of VOC from all 
new or modified units subject to NSR totaled 5,000 tpy and (2) units 
comprising 80 percent (i.e., 4,000 tpy) of these emissions were all 
above 20 tpy, the permitting authority could adopt 20 tpy as the 
threshold level for VOC in lieu of the national threshold level for VOC 
adopted in the final rule. (Similar showings would need to be made for 
other pollutants.) In the case of a 20 tpy VOC threshold level, a 
change would be eligible for the unit-based de minimis category if the 
total emissions of a unit after the change did not exceed 20 tpy. For 
toxic pollutants, EPA proposes three possible threshold levels:
    (i) 0 tppt;
    (ii) 20 percent of section 112 major source thresholds or 50 
percent of section 112(g) de minimis levels, whichever is less; or
    (iii) 75 percent of section 112(g) de minimis levels.
    Again, EPA would select a threshold level from within the proposed 
range and solicits comment and data in support of the proposed options. 
Moreover, EPA solicits comment on whether higher de minimis thresholds 
for toxic pollutants might be appropriate, such as section 112(g) de 
minimis levels, and data supporting them. While EPA does not propose to 
allow permitting authorities to establish alternative unit-based 
threshold levels for toxic pollutants, the Agency solicits comment on 
this possibility and the potential criteria for establishing such 
program-specific levels.
    For section 111 pollutants (i.e. those regulated by EPA under 
section 111, including fluorides, sulfuric acid mist, municipal waste 
combustor emissions, and hydrogen sulfide), EPA proposes that the 
applicable PSD significance levels be used to define the unit-based de 
minimis thresholds for those pollutants (40 CFR 52.21).
    (2) Proposed Gatekeepers. Even if a change qualifies for de minimis 
procedures based on size, EPA is proposing that it not qualify for the 
de minimis permit revision process if:
    (i) The source is in violation of the part 70 permit terms and 
conditions it seeks to change;
    (ii) The need for the permit revision does not result from a 
physical or operational change; or
    (iii) The change does not involve a permit term or condition 
established to limit emissions which is federally enforceable only as a 
part 70 permit term or condition.
    Thus, if a change were disallowed by any of these gatekeepers, even 
if it were clearly below the relevant de minimis threshold levels, it 
could not be processed as a de minimis permit revision.
    (3) Aggregation limitation. The EPA is not proposing an aggregation 
or ``stacking'' limitation on unit-based de minimis permit revisions. 
However, EPA recognizes concerns that sources might make inappropriate 
use of de minimis procedures by dividing what would otherwise be a 
significant emissions increase into several smaller increases to avoid 
more extensive public, permitting authority, EPA, and affected State 
review. The EPA does not believe stacking limitations are necessary to 
guard against inappropriate disaggregation, because de minimis changes 
will be publicly noticed, enabling the public as well as the permitting 
authority and EPA to spot questionable consecutive changes. In 
addition, section 182(c)(6) of the Act establishes a stacking 
limitation for VOC emissions in serious and worse nonattainment areas. 
Nevertheless, EPA solicits comment on the need for stacking limitations 
to prevent multiple unit-based de minimis permit revisions from 
increasing the size of any source by certain amounts or percentages of 
the source's total permitted emissions. The Agency also solicits 
comment on the administrative difficulty they would represent for 
permitting authorities and covered sources. Finally, EPA solicits 
comment and suggestions on appropriate stacking limits, and whether 
such limits should be based on a specified emissions amount or a 
percentage of a source's total permitted emissions.
    c. Scope of Increment-Based De Minimis Permit Revisions.--(1) 
Proposed Thresholds. For criteria pollutants, EPA proposes a range of 
three possible threshold levels for increment-based de minimis changes. 
It also proposes that a permitting authority have the option of 
developing alternative thresholds for its jurisdiction. For the final 
rule, EPA would select increment-based levels from the proposed range 
or include the provision for permitting authority-defined levels, or 
both. The three proposed increment-based threshold levels for criteria 
pollutants are:
    (i) 4 tppt CO, 1 tppt NOX, 1.6 tppt SO2, 0.6 tppt PM-10, 
or 1 tppt VOC;
    (ii) 20 percent of the applicable major source threshold, 10 
percent of the limit applicable to the unit undergoing the change, or 
15 tpy VOC or NOX (whichever is less, but not less than 2-5 tpy), 
or 15 tpy PM-10 or 0.6 tpy lead (whichever is less)22; or
---------------------------------------------------------------------------

    \2\2For example, if the major source thresholds were 100 tpy for 
VOC, NOX, PM-10 and lead, and the unit's allowable emissions 
were 10 tons VOC, then 20% of major source thresholds would be 20 
tpy, 10% of the unit's allowables is 1 tpy, and the formula would 
take the lesser of 20 tpy, 1 tpy or 15 tpy VOC or NOX, but not 
less than 2-5 tpy. Thus, the formula yields de minimis values of 2-5 
tpy VOC or NOX.
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    (iii) 30 percent of the applicable major source threshold, 15 
percent of the limit applicable to the unit undergoing the change, 
whichever is less, but not less than 5 tpy VOC or NOX.
    Permitting authorities would also be allowed to develop an 
alternative threshold level for each pollutant based on the estimated 
annual emissions increases of that pollutant from all units subject to 
NSR. The permitting authority would have to submit a demonstration 
containing the calculations upon which the threshold levels were based. 
The demonstration would have to show that the increment-based de 
minimis threshold level specified by the permitting authority for a 
pollutant would correspond to a level where at least 80 percent of the 
emissions increases of that pollutant were above that level. The Agency 
solicits comment on whether it should allow permitting authorities to 
set their own increment-based de minimis threshold levels.
    For toxic pollutants, EPA proposes a range of three possible 
increment-based threshold levels:
    (i) O tppt;
    (ii) 20 percent of section 112 major source thresholds, 50 percent 
of section 112(g) de minimis levels, or 10 percent of the limit 
applicable to the unit undergoing the change, whichever is less; or
    (iii) 75 percent of section 112(g) de minimis levels.
    As with unit-based de minimis threshold levels for toxics, EPA is 
not proposing an option for permit program-specific threshold levels, 
but again solicits comment on the desirability of such an option and 
what would be the grounds for approving State or local agency 
demonstrations. Also, EPA solicits comment on whether higher increment-
based threshold levels would be appropriate for toxic pollutants and 
data supporting any higher levels.
    As proposed for the unit-based de minimis threshold levels, EPA 
proposes the PSD significance levels for section 111 pollutants.
    (2) Proposed Gatekeepers. In addition to the gatekeepers applicable 
to unit-based de minimis permit revisions set forth above, two other 
gatekeepers would apply to increment-based de minimis permit revisions. 
First, the resulting emission limit would have to be expressed in the 
same form and unit of measure as the previous limit. Second, any 
associated changes in compliance monitoring terms would have to be 
undertaken in a manner established in the permitting authority's 
program regulations, in the source's permit, or through the proposed 
minor permit revision procedures. Therefore, any change that was 
disallowed by any of these additional gatekeepers, even if it met 
increment-based emissions threshold levels and complied with the unit-
based de minimis gatekeepers, could not be processed as an increment-
based de minimis permit revision.
    The Agency recognizes that the proposed provisions defining the 
scope and gatekeepers for the de minimis process are quite complex. 
Thus, EPA solicits suggestions on how to make the approach less 
complicated while at the same time providing adequate flexibility and 
programmatic integrity.23
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    \2\3The alternative approach to changes in compliance monitoring 
terms, discussed later in this preamble, presents one potential way 
of simplifying de minimis permit revision procedures. That approach 
would apply the same compliance term gatekeepers to changes at both 
small and large units and would thus obviate the need for the two 
different types of de minimis permit revisions, unit-based and 
increment-based.
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    (3) Aggregation limitations. As in the case of unit-based de 
minimis permit revisions, EPA is not proposing aggregation or stacking 
limitations for increment-based de minimis permit revisions. However, 
for the reasons discussed previously, EPA solicits comment on the need 
for stacking limitations to prevent increment-based de minimis permit 
revisions from increasing the size of any unit or an entire source by 
certain amounts or percentages of limits applicable to a unit or 
source. The EPA also solicits comment on whether stacking limits should 
be based on a specified amount or percentage of a source's total 
permitted emissions and what those amounts or percentages should be.
    d. Process for De Minimis Permit Revisions. De minimis permit 
revisions would be processed as follows. First, the source would submit 
its application to make a de minimis permit revision to the permitting 
authority. As for merged program changes, the application would be 
required to contain a description of the change and supporting 
information, a demonstration, a certification signed by a responsible 
official that the change is eligible for the de minimis permit revision 
process, an affidavit accepting the risk of making the change before 
the permit is revised, and a proposed addendum to the permit containing 
the proposed permit terms that would apply as a result of the change.
    The permit program could authorize the source to operate the 
requested change 7 days after the permitting authority received the 
application or, with the permitting authority's permission, as early as 
the day its application is submitted. Public notice of the changes 
would be provided on a monthly, batched basis. In other words, one 
notice listing all changes for which applications for de minimis permit 
revisions had been received in the preceding month would be provided 
each month. The proposal does not specify the manner in which such 
public notice should be given, and on whom the responsibility should 
fall to provide it. The final rule would at least provide that State or 
local permit programs establish a mechanism sufficient to ensure that 
public notice reaches all interested citizens. In any case, EPA is not 
proposing that EPA and affected States receive separate notification of 
de minimis permit revisions, but that they have access to the monthly 
reports. The permitting authority would also be required to establish a 
public docket into which it places de minimis permit revision requests 
on the date it receives them, or otherwise provide substantially 
equivalent public access to the requests as they are received.
    The extent to which the permitting authority would be required to 
retain authority to disapprove the de minimis permit revision request 
would depend on the nature of any preconstruction review the change may 
have undergone. State and local agency minor NSR procedures vary in 
terms of whether affirmative permitting authority review is required 
for all changes and whether and how much public review is provided. The 
proposed de minimis revision procedures would take account of these 
differences and require that the permitting authority retain authority 
to disapprove a de minimis permit revision request depending on the 
extent of permitting authority and public review of the change in the 
underlying minor NSR process.
    For a change that the permitting authority had affirmatively 
approved (i.e., had not approved by default) pursuant to a minor NSR 
process that included a public comment period of at least 21 
days,24 the permitting authority would be required to retain 
authority to disapprove incorporation of the change into the part 70 
permit as a de minimis permit revision for a period of no more than 7 
days after receipt of the request. For such a change, the proposed 
permit addendum containing the revised terms could take effect 7 days 
after receipt of the application or as early as the day of receipt 
where the permitting authority so allowed in response to a request by 
the source. For a change that the permitting authority approved by 
default in the preconstruction review process or for which a 21-day 
public comment period was not provided, the permitting authority would 
have to retain authority to disapprove the change for a specified 
period of time following the date public notice was given. Such a 
change would be incorporated into the part 70 permit on the day after 
this period expired if the permitting authority had not acted by then 
to disapprove the change. For all de minimis permit revisions, the 
permit would be amended by attaching the proposed addendum to the 
permit.
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    \2\4As in the case of a merged part 70/NSR or part 70/section 
112(g) process, permitting authorities whose NSR programs operate by 
default could provide in their permit programs that sources could 
elect to subject changes to NSR requiring an affirmative decision 
and 21-day comment period on a case-by-case basis.
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    In the case of any change for which the permitting authority 
retained authority to disapprove, citizens could request that the 
permitting authority disapprove the change.25 Any such request 
would have to be submitted within a specified period of time after the 
date public notice was provided for the change. (The Agency solicits 
comment on whether the public would need as little as 15 days to as 
much as 45 days to submit such requests.) If any requests were 
submitted, the permitting authority would have a specified period of 
time following the deadline for submission of such requests to respond. 
(The Agency solicits comment on how long this period for permitting 
authority response should be, from 15 to 45 days.) If the permitting 
authority did not heed a request to disapprove the change, the person 
requesting disapproval could petition EPA to object to the change in 
the manner set forth in Sec. 70.8. Any such petition to EPA would have 
to be submitted within 60 days of the end of the period for permitting 
authority response to citizen objections.
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    \2\5In the case of a change for which the permitting authority 
did not retain authority to disapprove, the permit would be revised 
to incorporate the change as explained above, but, like the permit 
as a whole, the permit revision would be subject to the current part 
70 provisions for revocation for cause.
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    If the permitting authority disapproved a request for a de minimis 
change or EPA objected to a request (in response to a public petition) 
after the source had made the change, the source would be liable for 
violating the existing permit from the time it made the change. 
However, as would be the case for merged program changes made through 
administrative amendments, the permitting authority, to a limited 
extent, could revise (instead of disapprove) a de minimis change 
request without necessarily rendering the source liable for violating 
its existing permit from the time it made the proposed change. So long 
as (1) the permit authority's revisions were not necessary to make the 
request eligible for de minimis procedures and did not change the 
source's proposed determination in the request of which applicable 
requirements it must meet as a result of the change, and (2) the 
source, using reasonably available means, demonstrated its compliance 
with the proposed permit terms incorporating applicable requirements, 
the permitting authority could find that its revisions to the de 
minimis permit revision request did not render the source liable for 
violating its existing permit.
    Finally, a copy of the final addendum would have to be provided to 
EPA. No permit shield would be available for de minimis changes.
    e. Rationale.--(1) In General. The Agency believes that the 
proposed de minimis revision track is necessary and appropriate to 
address the large number of small physical or operational changes that 
will occur at part 70 sources each year. Most changes at sources 
involve the addition of small new units or small increases in emissions 
at existing units, and these changes usually receive prior review under 
existing preconstruction review programs. In many States, thousands of 
these small changes take place each year. For example, more than 10,000 
changes subject to preconstruction review occur annually in Texas and 
over 5,000 in New Jersey. Of those, only a few hundred are subject to 
major NSR. Nationwide, most of the tens of thousands of preconstruction 
actions that occur each year are subject to minor NSR for which little 
or no public review is provided. Many States provide public process for 
minor NSR actions that result in emission increases above certain 
(generally relatively high) levels, but few (if any) provide public 
process for all actions that undergo minor NSR.
    Requiring full part 70 public process for all minor NSR actions 
would make extraordinary demands on State and local resources. One 
State, in the detailed fee demonstration accompanying its part 70 
program submittal, estimated that to comply with the current rule's 
requirements for issuing part 70 permits, 150 hours will be required to 
hold a public hearing and respond to public comments for each permit. 
If this amount of process were required for all part 70 permit 
revisions (including all minor NSR changes) in that State, it would 
need to spend well in excess of 1,000,000 hours per year on public 
process. To accommodate this level of process, the State would need to 
nearly double its current staffing estimates for part 70 permit review 
and devote the added staff full time to providing public process (see 
analysis in docket number A-93-50). Although these time and staffing 
estimates are based on one State's submission, EPA believes they are 
representative of what other permitting authorities would face if 
required to provide full permit issuance process for permit revisions. 
Permitting authorities are already having to substantially increase 
staffing to meet title V requirements and are facing difficult 
obstacles in finding qualified staff. Moreover, such unprecedented 
levels of staff, even if they could be obtained, would present 
additional communication and prioritization problems.
    Largely as a function of the need for more staff, providing 
substantial public process for every permit revision would also be very 
costly. While title V requires that permitting authorities charge fees 
sufficient to cover the costs of the permit program, this mandate must 
be read in light of the other signposts provided by Congress. For 
example, title V establishes a presumption that a fee of $25/ton, 
adjusted for the Consumer Price Index (CPI), is adequate to cover the 
direct and indirect costs of the permitting program. That figure would 
be $30.18/ton for 1995. Based on the aforementioned State's fee 
demonstration, the cost of providing full public process for all permit 
revisions in that State would be over $8,000,000 and would cause its 
fee rate to exceed $45.00/ton, more than 50 percent above the amount 
Congress presumed would be adequate. While the foregoing cost 
projections are based on one State's analysis of its program, EPA's 
review of other States' fee demonstrations indicate that the 
projections are not unusually high.
    Permitting authorities and sources alike are also very concerned 
with the potential of extensive public review of permit revisions to 
produce permitting gridlock. If every new unit and every physical or 
operational change at existing units were required to undergo 
substantial review beyond that provided by existing preconstruction 
review, substantial delays in revising part 70 permits would result and 
sources would likely incur significant opportunity costs.
    The sheer volume of small changes make necessary and appropriate 
procedures that provide for public review after the source may make the 
change at its own risk and that do not require affirmative permitting 
authority action except where objections are raised. The Agency 
believes more burdensome procedures would probably overwhelm permitting 
authorities and impose unreasonable costs on both agencies and sources. 
Indeed, the proposed de minimis procedures would subject most of the 
minor NSR actions that take place each year to more process than is 
typically provided by State and local minor NSR programs. At the same 
time, EPA believes that the proposed requirement for post hoc public 
notice and an opportunity to object would help ensure the integrity of 
part 70 and minor NSR programs without significantly increasing the 
permitting burden on agencies and sources. Post hoc public process 
would provide sources with a significant incentive to accurately assess 
the effect of requested changes on emissions and compliance with 
applicable requirements. Put another way, subjecting even small changes 
to public scrutiny would increase the likelihood that sources would 
limit requests for de minimis changes to changes that are truly small 
and that can be made in compliance with applicable requirements.
    As previously pointed out, in requiring public process for all 
minor NSR modifications, today's proposal would add public procedures 
that in some cases may not be required by the underlying minor NSR 
programs. Like the requirements for merged program review, the proposed 
de minimis change procedures would have the effect of requiring at 
least some public process for minor NSR modifications that may be 
eligible for valid exclusions from public process under State or local 
minor NSR programs. For the reasons set forth in the discussion of 
merged program requirements earlier in this preamble, EPA is 
considering whether valid exclusions from minor NSR process should 
carry over into the title V context. It thus requests comments on 
whether a change that would otherwise be subject to de minimis change 
procedures (presumably in part because it did not undergo merged 
program review), should be eligible for incorporation into a part 70 
permit as an administrative amendment if it qualifies for a minor NSR 
exclusion from public process.
    As further explained below, the scope of changes eligible for the 
de minimis process would be restricted by several ``gatekeepers'' to 
guard against improper or high risk use of the process. The procedures 
for revising the permit would provide added safeguards. In view of the 
small size of the eligible changes, the applicable gatekeepers and the 
additional procedural safeguards, EPA believes the proposed process 
would be sufficient to meet title V's public process requirements.
    From industry's perspective, the proposed procedures would provide 
streamlined processing of permit revisions. The small size of the 
eligible changes and the checks and balances provided by the procedures 
would justify the Agency temporarily exempting sources from the section 
502(a) prohibition against operation in noncompliance with permit 
terms. Thus, small changes could be operated as soon as or shortly 
after applications are submitted. While sources would remain at risk 
for violating their permits until the end of the public review period 
for changes that the permitting authority retained authority to 
disapprove, they could proceed expeditiously to operate small changes 
that they were confident met all applicable requirements. The proposed 
procedures would further provide that permits be revised by default if 
the permitting authority fails to act affirmatively. The EPA thus 
believes that the proposed process would also be sufficient to meet 
title V's requirement that permitting procedures be streamlined and 
expeditious.
    The Agency solicits comment on the effectiveness of a post hoc 
public review process in assuring that requests for de minimis changes 
are limited to changes that are truly small and consistent with 
applicable requirements. The Agency is also interested in comments on 
the costs of the post hoc review process and on whether the benefits 
justify the costs of such a program. It further solicits comment on 
whether the post hoc review process could be eliminated without 
violating statutory requirements. Finally, EPA solicits comments on 
whether, in the absence of a post hoc process, the Agency would be 
authorized to limit its objection opportunity and to allow sources to 
operate de minimis changes before their permits are revised, as 
proposed.
    (2) Scope. A critical question in the evaluation of the proposed 
procedures, however, is what constitutes a ``small'' change. Before 
exploring that issue, it should be pointed out that whatever threshold 
EPA eventually selects for defining ``small'' changes, under the 
proposal the scope of the changes a particular source could process 
using the de minimis track would depend on its permit. As indicated 
above, the proposal would require that a source's use of de minimis 
procedures be authorized by its part 70 permit. The purpose of this 
requirement is to give the permitting authority the option of allowing 
only those de minimis changes at specific units that it considers 
appropriate, and the public an opportunity to comment on the extent to 
which any source could use de minimis revision procedures. Conceivably, 
the public could comment and the permitting authority could decide that 
certain situations (e.g., a bad compliance record) warrant limiting or 
denying altogether a source's use of de minimis procedures.
    The Agency solicits comment, though, on whether the permitting 
authority should be authorized to provide in its part 70 program for 
certain categories or classes of sources or changes to get the benefit 
of de minimis change procedures. For instance, for any change subject 
to preconstruction review, there arguably would be little basis for 
depriving a source of the availability of the de minimis permit 
revision track, given that such a change would have already undergone 
permitting authority review by the time the part 70 permit revision 
application was received. The Agency solicits comment on whether and 
under what circumstances the permitting authority should be allowed to 
authorize use of de minimis revision procedures on a generic basis.
    It also bears explaining at the outset why EPA is proposing two 
types of de minimis changes: unit-based and increment-based. As noted 
above, unit-based de minimis changes include any change at a small 
unit. Because the unit is itself small in terms of its emissions 
potential, the environmental risk of a source inappropriately 
processing a change at such unit through de minimis procedures is 
relatively small, since the most the unit could emit is the de minimis 
threshold itself. Increment-based de minimis changes, however, are 
small changes at big units. Because the unit in this case could be very 
large (e.g., 400 tpy VOC), a purportedly small change could in fact 
have very large emissions consequences. For instance, if a 400 tpy unit 
is controlled to 200 tpy, the source could potentially make a change 
that it represents as small but that increases the unit's emissions by 
200 tpy. Because of this risk, EPA is proposing to restrict the 
availability of increment-based de minimis changes in ways that ensure 
the continued enforceability of the controls on the unit undergoing the 
change. The Agency is concerned, however, that two types of de minimis 
changes may be confusing and unnecessarily complex. It therefore 
requests comments on whether it should promulgate one or both types of 
de minimis revision tracks and what applicable gatekeepers it should 
retain or reject. It also refers the reader to the discussion later in 
this preamble that suggests a different approach to changes in 
compliance monitoring terms that may provide a basis for collapsing the 
two types of de minimis permit revisions into one.
    The Agency is proposing a range of possible values of de minimis 
changes because it thus far lacks adequate information to choose 
between the proposed values. The Agency believes that the proper 
approach to choosing de minimis thresholds is to determine what 
threshold will likely result in the public having a prior opportunity 
to comment on the large majority of regulated pollutants' total 
emissions and in the permitting authority's being relieved from 
processing a significant percentage of permit revisions through more 
burdensome procedures. As suggested by EPA's proposal for permitting 
authority-determined de minimis levels, the Agency believes that about 
80 per cent of total emissions subject to NSR should not be eligible 
for the de minimis process, but it requests comment on the appropriate 
percentage and information indicating what emission level(s) would come 
close to achieving this result.
    The Agency recognizes the inherent difficulty of utilizing a 
national emission level to ensure that the public receives prior notice 
and an opportunity to comment on a certain percentage of total 
emissions, since that level is apt to vary with the nonattainment area 
and the types of controls applicable in it. However, EPA is still 
interested in promulgating a national emission level for several 
reasons. First, a number of States have indicated a desire for a 
national de minimis threshold to avoid permitting authorities 
``bidding'' for sources or source expansions by offering higher 
thresholds than their neighboring State or local agencies. Second, the 
showing that EPA has proposed that State and local agencies make to 
justify a unique de minimis threshold may be very difficult for a 
particular agency to make depending on the extent and detail of its 
historical records.
    The Agency is also interested, however, in providing permitting 
authorities with the option of developing their own de minimis 
thresholds if they can make the requisite showing. Although EPA 
understands the desire on the part of some permitting authorities for 
national uniformity, it also appreciates that permitting authorities 
are in very different positions with regard to the emission levels that 
would achieve the 80 percent mark in a particular agency's 
jurisdiction. While in some heavily industrialized areas a 5 ton per 
year (tpy) cut-off may result in 80 or 90 percent of the emissions 
being subjected to prior NSR, more rural areas may achieve the same 
with a much higher cut-off. Indeed, a 5 tpy cut-off for unit-based de 
minimis might well be useless in an area where the agency does not 
regulate such small emissions units or increases. On the other hand, 
the permitting authority for that area might not have so great a need 
for de minimis procedures. The EPA today proposes to both promulgate a 
national level and to allow a permitting authority to develop 
alternative de minimis thresholds that would apply in the area of the 
agency's jurisdiction instead of the national threshold. The Agency 
requests comment on whether it should promulgate both approaches or 
just one or the other.
    As for the proposed national thresholds, EPA believes that each 
represents a reasonable approach, even though the range of values they 
produce is wide. The low end of the range (e.g., 1 tppt NOX, 0 
tppt HAP's) is the same for both unit and increment-based de minimis 
purposes and produces the smallest threshold and best protects against 
overuse of the de minimis track. However, this proposal may also result 
in the de minimis process becoming unavailable over the life of the 
permit even for very small changes that would otherwise qualify.
    A single 5 tpy cutoff proposed for each criteria pollutant under 
the unit-based de minimis approach has the advantage of simplicity and 
is in the range that many permitting authorities recognize as small 
(judging by the caps on insignificant activities in State and local 
permit programs submitted pursuant to the current rule). It does not, 
however, recognize differences in pollutants. New Jersey has submitted 
a specific demonstration to the record which shows that approximately 
90 percent of the sources subject to preconstruction review in New 
Jersey over a recent 20-month period involve emissions units of 5 tpy 
or less. These same units account for not more than 10 percent of all 
the relevant air pollutant emissions subject to New Jersey's NSR 
program over the same period. Consequently, under a 5 tpy threshold 
test, New Jersey would be able to focus more thoroughly on the 10 
percent of the sources responsible for 90 percent of emissions from 
preconstruction review actions.
    The middle ground approach proposed for criteria pollutants under 
both unit and increment-based de minimis processes would allow for 
variation among nonattainment areas with differing major source 
thresholds, and would protect against de minimis changes larger than 
the PSD significance levels. For unit-based de minimis, it would allow 
changes in VOC and NOX of up to 20 tpy where major source sizes 
are 100 tpy, up to 10 tpy where major source sizes are 50 tpy, and up 
to 5 tpy emissions where major source sizes are below 25 tpy. For PM-
10, the unit-based threshold would allow de minimis changes up to 15 
tpy where the major source cutoff is 100 tpy, and up to 14 tpy where 
the major source cutoff is 70 tpy. For lead, the threshold value would 
always be 0.6 tpy. The EPA believes the formula for VOC and NOX in 
the unit-based approach (i.e., 20 percent of the major source cutoff or 
5 tpy, whichever is greater) is appropriate since it allows greater de 
minimis thresholds in nonattainment areas with less severe problems, 
yet provides some relief for permitting authorities and sources in 
areas with the most severe problems. The EPA notes also that the values 
produced by the formula are well below the PSD significance levels of 
40 tpy for VOC and NOX and 15 tpy for PM-10 that apply in 
attainment areas (where major or minor source size would be 100 tpy). 
The values for lead are equal to the PSD significance levels, but are 
themselves low enough to protect against significant emission 
increases.
    Increment-based de minimis changes would generally be the least of 
20 percent of the applicable major stationary source cutoff, 10 percent 
of the permitted limit, or 15 tpy (but in no event greater than a major 
modification cutoff or less than 2-5 tpy NOX or VOC). Where major 
source size is 100 tpy, this formula would yield an upper bound of 15 
tpy for VOC and NOX for unit allowables at or above 150 tpy. As 
unit allowable falls to between 50 and 150 tpy for the same major 
source size, the formula would allow de minimis changes between 5 and 
15 tpy. Below unit allowables of 20-50 tpy, the result would be 2-5 tpy 
de minimis thresholds. Where major source size is 50 tpy, the upper 
bound falls to 10 tpy for any unit allowable at or above 100 tpy. For 
unit allowables between 50 and 100 tpy, the formula yields de minimis 
thresholds of 10 percent of unit allowables, or 5-15 tpy. If unit 
allowables are between 20 and 50 tpy or below, de minimis thresholds of 
2-5 tpy would result. At 25 tpy major source size, the formula yields 
de minimis thresholds of 5 tpy for any unit allowables at 50 tpy or 
above, and values of 2-5 tpy for unit allowables of 20-50 tpy or lower. 
When major source size is 10 tpy, the formula yields 2-5 tpy de minimis 
thresholds regardless of unit allowable levels.
    Although complicated, the formula does allow relatively small 
changes to occur at units that could not qualify for unit-based de 
minimis permit revision procedures. For example, any unit with an 
allowable level over 20 tpy would not qualify for unit-based 
procedures, but would be allowed under the increment-based approach to 
make de minimis changes of as low as 2-5 tpy if their allowables were 
in the range of 20-50 tpy (for any major source size) or as high as 15 
tpy if their allowables were at or above 150 tpy and the major source 
size were 100 tpy. Yet these values are well below the major source 
thresholds, are protective of PSD significance levels, and allow 
proportionately higher de minimis changes at units with higher 
allowable emissions.
    Certain aspects of this formula (i.e., 20 percent of the relevant 
major source definition) are consistent with previous comments of State 
and local air pollution control officials with permitting experience. 
Other aspects (i.e., 10 percent of the unit's allowable level) are 
contained in the current part 70 as cutoffs for when group processing 
may be allowed for minor permit modifications. Even at the 15 tpy upper 
bound under this formula, many State or local agencies do not require 
any type of a permit for sources at or below these levels. Moreover, 
individual changes at or below these levels are unlikely to trigger new 
federally-promulgated applicable requirements and to affect 
significantly the attainment of PSD increments and national ambient air 
quality standards. Accordingly, EPA believes that they serve as one 
appropriate starting point for de minimis change thresholds. The EPA 
believes a higher threshold (i.e., 15 tpy rather than 5 tpy) may be 
appropriate for reasons previously stated. To safeguard the usefulness 
of de minimis revision procedures in areas with low major source 
thresholds, EPA also believes that the definition of unit-based de 
minimis should include a lower bound or ``floor'' and that a floor of 
2-5 tpy is appropriate.
    There are some significant differences between the two de minimis 
approaches. For example, the ``10 percent of permitted allowable 
emissions'' criterion is appropriate for only an increment-based 
approach. It is not necessary for a unit-based system, since the 
entirety of the unit (not just some change to it) is the basis for 
judging eligibility for de minimis procedures. In addition, the 
proposed unit-based de minimis approach could be used at a source as 
large as 20 tpy in attainment or moderate nonattainment areas, while an 
increment-based de minimis change could not be larger than 15 tpy even 
in attainment areas. The proposed increment-based number is smaller 
because, even with the additional gatekeepers safeguarding compliance, 
any change at a large unit carries the inherent risk of resulting in a 
large emissions increase. The larger number would also apply only for 
the larger units (150 tpy allowable or higher) and where major source 
size is 100 tpy.
    The high end of the proposed range would allow unit-based de 
minimis changes up to 30 tpy where major source sizes are 100 tpy, up 
to 15 tpy where major source sizes are 50 tpy, up to 7.5 tpy where 
major source size is 25 tpy, and up to 5 tpy where major source sizes 
are below 16 tpy. Even these higher values could be viewed as 
reasonable considering that these changes have already been subject to 
State or local NSR (or are categorically exempt from it) and 
authorization to make a change up to those bounds was provided during 
issuance of the source's part 70 permit.
    For toxic pollutants (i.e., HAP's), a range from zero to 75 percent 
of section 112(g) de minimis levels is proposed. The lower end of the 
range represents a position that any increase in the permitted limit of 
a HAP would be significant enough to warrant at least the minor permit 
revision process. The upper end of the range is defined relative to a 
percentage of the de minimis levels proposed for section 112(g) (59 FR 
15504 (April 1, 1994)). This approach reasonably links the trigger for 
more part 70 permit revision process to a change with an increase still 
comfortably below the level proposed to require regulatory control 
under section 112(g). The Agency foresees the likelihood of sources 
taking controls to keep themselves below section 112(g) de minimis 
levels in a manner analogous to what occurs in the NSR context. A 
change below section 112(g) de minimis levels that requires a permit 
revision at all might thus be to a limit establishing a ``synthetic 
minor'' source for HAP's. This approach in establishing a de minimis 
level for HAP's is also consistent with the proposed treatment of 
insignificant activities (57 FR 32273) which is linked to the proposed 
section 112(g) de minimis levels.
    Cutoffs are proposed for another set of pollutants, those that are 
regulated under section 111 of the Act. These pollutants are those 
covered under NSPS but are not criteria pollutants or pollutants 
regulated under section 112 of the Act (e.g., fluorides, hydrogen 
sulfide, sulfuric acid mist). The proposed de minimis cutoffs for both 
unit and increment-based changes are the PSD significance levels for 
these pollutants. Any change at these levels or higher would be a 
modification under section 111 and not eligible for de minimis permit 
revision procedures. Lower cut-offs would not be justified because 
increases and decreases of these pollutants are not tracked on an area-
wide basis (unlike criteria pollutants) and no additional standards 
covering these pollutants will be forthcoming. An applicable NSPS or a 
section 111(d) provision applicable to a source (i.e., a source that 
was in existence when the NSPS was promulgated) will constitute an 
applicable requirement that cannot be violated. The only part 70 
concern with respect to these pollutants is triggering PSD review as a 
major modification.
    Further, EPA is proposing several restrictions on the use of de 
minimis procedures for changes that meet the applicable cut-offs. The 
general purpose of these ``gatekeepers'' is to guard against improper 
or inappropriate use of the de minimis process. The first three 
gatekeepers apply to both unit-based and increment-based changes, while 
the last two apply only to increment-based changes to address the 
greater potential environmental risk they pose.
    The first gatekeeper would prohibit a source from using the de 
minimis process for a change to a permit term that the source was 
violating. The Agency is proposing this gatekeeper because sources 
might otherwise be tempted to use the streamlining features of the de 
minimis process, i.e., limited public review and permit revision by 
default, to avoid or moot enforcement actions.
    The second gatekeeper would require that the requested change be 
associated with a physical or operational change at the plant. This 
gatekeeper would ensure that a source uses the de minimis process only 
for permit revisions necessitated by a change at its facility and not 
as a means of appealing a permit term it finds objectionable. If a 
source takes issue with a permit term issued after full public process, 
its proper recourse is to the permitting authority to reopen its permit 
or to the courts for review of that term. Part of the justification for 
post hoc process is to allow a source to expeditiously make changes as 
needed to respond to the market. A source's preference for a less 
stringent permit term apart from the need to make physical or 
operational changes does not justify expedited procedures.
    A further gatekeeper that would apply to both unit- and increment-
based changes would prohibit the use of de minimis procedures for 
changes to permit terms establishing emission limits or caps developed 
only through part 70-only process. Development of such limits is 
generally very time-consuming and case-specific, and changes to them 
would warrant full public process in the part 70 context since 
presumably there would be no prior permitting authority review.
    The two additional gatekeepers are proposed for increment-based de 
minimis changes. The resulting permit limits would have to be expressed 
in the same form and unit of measure as the previous limit, and any 
associated changes in compliance monitoring terms would have to be 
undertaken in a manner established in the State or local permit 
program, the source's permit, or through the proposed minor permit 
revision procedures. The purpose of these gatekeepers is to assure that 
permit limits whose enforceability has been insured through compliance 
requirements established during permit issuance are not replaced by 
apparently more stringent limits that are not practicably enforceable. 
Many compliance monitoring requirements need to be tailored to the 
affected unit and the applicable controls. For example, monitoring of 
operating parameters such temperature or pressure is often substituted 
for direct emissions measurements. These parameters must be calibrated 
to emissions results and changes in them do not necessarily result in 
proportionate emissions changes. Establishing the proper calibrations 
often requires testing and interpretation of test results and so is not 
appropriately subject to an abbreviated process providing little or no 
prior permitting authority or public review.
    (3) Process. The proposed rule would impose on de minimis changes 
the same application requirements imposed on merged program changes 
processed as administrative amendments. The basis for these 
requirements would also be the same as that for their administrative 
amendment counterparts. That is, besides a description of the change, 
the source would be required to demonstrate and certify that the change 
is eligible for the de minimis process to help ensure that the source 
has properly evaluated the eligibility of the change for the 
streamlined process. The source would also be required to submit an 
affidavit accepting the risk of making the change before the permit is 
revised. Finally, the source would have to submit a proposed permit 
addendum to simplify the process of revising the permit.
    The proposal would provide that a source could operate the change 
seven days after submitting its application to the permitting 
authority, but it would also allow the permitting authority to waive 
all or part of this waiting period at the source's request. The 7-day 
notice requirement is intended to provide the permitting authority with 
prior notice of a change so that it would have an opportunity to stop 
inappropriate changes. However, in many cases the permitting authority 
would already be familiar with the change as a result of 
preconstruction review. It thus makes sense to allow the permitting 
authority for whose benefit the prior notice is provided to waive it in 
those circumstances the permitting authority considers it unnecessary. 
The Agency is interested in comment on whether a permitting authority 
could waive the waiting period for classes of sources or changes (e.g., 
all changes subject to permitting authority review prior to 
construction), instead of through case-by-case waivers.
    The proposal specifies the minimum content of public notice to make 
sure it is adequate to alert interested citizens to the opportunity to 
review the change. The public docket requirement would ensure that an 
interested citizen could obtain the information needed to evaluate the 
change. The Agency is proposing, however, to give permitting 
authorities some latitude in providing citizens with this information. 
Permitting authorities would be able to propose for EPA approval other 
means that reasonably afford citizens the information they need.
    The proposal does not specify the manner in which public notice is 
to be given. The Agency requests comments on means of giving notice 
that would be both effective and low cost, and on whether EPA should 
specify or leave to permitting authority discretion the manner for 
giving notice. Alternative methods EPA has considered include monthly 
lists published in a State or local government register or sent to 
interested citizens by the source making the request. Interested 
citizens would include those who commented on the source's initial 
permit or any revision thereto, or requested to be notified of permit 
revisions requested by the source. Another possibility is the posting 
of the monthly lists in local government buildings accessible to area 
residents.
    The proposal also lays out a range of potential time periods for 
the public to object and for the permitting authority to respond to any 
objections. The Agency solicits comments on what time periods would be 
adequate for the public to make objections and for the permitting 
authority to respond. It should be pointed out that the time period for 
the public to object may well depend on the manner of giving notice. 
For instance, notice by means of listings posted in public buildings 
may warrant a longer public objection period to take into account the 
additional time required to access the notice.
    Where a requested change underwent preconstruction review and 
received affirmative permitting authority approval following a 21-day 
public comment period, EPA is proposing that there be no further 
opportunity for the public to request that the change be disapproved. 
Of course, a change that underwent a 15 to 30-day public comment period 
(depending on the permitting authority's existing minor NSR 
regulations) during a process that also met part 70 permit content 
requirements would be the product of a merged program change that could 
be processed as an administrative amendment. This provision of the de 
minimis change procedures is intended to take account of circumstances 
falling somewhat short of merged program requirements for small 
changes. So long as preconstruction review afforded the public notice 
and a 21-day comment period and required a final determination by the 
permitting authority in light of any public comments, the change need 
only be publicly noticed. An interested member of the public, if 
dissatisfied with the part 70 permit revision, may petition the 
permitting authority to revoke and reissue it. (Presumably, a citizen 
would also be able to challenge the underlying preconstruction review 
action in State court.) There would be no deadline, however, on the 
permitting authority's response to that petition, except as provided 
under State administrative law. The Agency believes that small changes 
that receive the requisite amount of public process during 
preconstruction review do not warrant further public review in part 70 
permitting.
    Like the proposed procedures for administrative amendments, the de 
minimis procedures would provide that permits be revised by default if 
the permitting authority fails to act affirmatively by the relevant 
deadline. In the case of changes for which the permitting authority did 
not retain authority to disapprove, the permit could be deemed revised 
at the end of the 7-day notice period if the permitting authority 
failed to act. For changes the permitting authority could disapprove, 
the permit could take effect at the end of the period for consideration 
of any public objections in the absence of a permitting authority 
objection. The permit would be revised by attaching the addendum 
proposed by the source. This is an advantage over all the processes 
established by the current rule, which require permitting authority 
action to complete the permit revision process. Of course, a permitting 
authority could choose to provide that the permit is not revised until 
it takes action to revise it.
    While a citizen who unsuccessfully requested disapproval of a 
change could petition EPA to object to it, the Agency would not 
otherwise be involved in the processing of de minimis change requests. 
Just as the small emissions impact and the procedural safeguards 
associated with de minimis changes make post hoc public review 
adequate, these same considerations make routine EPA review 
unnecessary. Recourse to EPA to object to a change is sufficient to 
provide the statutorily required Agency check on State or local agency 
processing for these small changes. Beyond that, further EPA 
involvement in processing de minimis changes would simply be 
infeasible. The Agency is proposing a de minimis change procedure that 
allows a permit to be revised by default in recognition of the fact 
that State and local permitting authorities are unlikely to be able to 
affirmatively act on every small change. Prospects for EPA's ability to 
attend to all such changes occurring nationwide are that much dimmer.
    Finally, as for merged program changes processed as administrative 
amendments, the source would be liable for violating its existing 
permit if it operated the change before its permit was revised and the 
permitting authority ultimately disapproved the change, potentially in 
response to a public objection. This provision should ensure that 
sources take the potential for public objection to heart. Like for 
merged program changes, however, to the extent that a source's request 
required only minor alterations to be approvable, the permitting 
authority could spare the source from liability under the circumstances 
specified earlier in this preamble.
    In view of the limited public, affected State, and EPA review 
afforded for de minimis changes, the Agency is also proposing that the 
permit shield not be available for such changes. The lack of a shield 
would provide a further check on the potential consequences of a change 
processed through de minimis procedures. Even if a source were 
successful in having its permit revised to reflect a change that failed 
to comply with applicable requirements, enforcement action could still 
be taken against that source for its noncompliance.
5. Minor Permit Revisions
    a. Overview. Under today's proposal, most changes ineligible for 
administrative amendment or de minimis permit revision procedures would 
be eligible for the minor permit revision process. Taking the current 
rule's minor permit modification process as a starting point, the 
proposal would add expedited procedures for providing public notice and 
a 21-day comment period, allow the source to operate the requested 
change at the end of the comment period when no objections were 
received, and provide for permitting authority action on the request 
within 60 days of its submission.
    In return for the addition of public review, the proposal would 
remove several of the current rule's gatekeepers, substantially 
expanding the scope of the changes that qualify. For example, major and 
minor NSR changes and section 112(g) actions that did not undergo 
merged program process would qualify as minor permit revisions with few 
exceptions. In addition, most changes triggering other Federal 
requirements (e.g., RACT or MACT) would also qualify for minor permit 
revision treatment.
    b. Description of Current Minor Permit Modification Procedures. The 
minor permit modification procedures as currently promulgated in 
Secs. 70.7(e)(2) and (3) allow sources to make certain types of changes 
immediately upon filing a permit revision application with the 
permitting authority, and do not require that the permitting authority 
provide an opportunity for public participation before revising the 
source's permit. To insure that inappropriately significant changes are 
not processed through this very streamlined revision track, part 70 
strictly limits the universe of eligible changes.
    For example, no change could be processed as a minor permit 
modification that involves significant changes to existing monitoring, 
reporting, or recordkeeping requirements in the permit. Nor would a 
modification that requires or changes a case-by-case determination of 
an emission limitation or other standard, or that is a modification 
under any provision of title I of the Act, be eligible. Changes that 
are eligible could be implemented by the source immediately upon filing 
a minor permit modification application with the permitting authority. 
Thus, sources could operate changes even before the permitting 
authority has any opportunity to review the requested change. Moreover, 
EPA's review period and opportunity to object to the modification do 
not begin until after the source has began to operate the change. 
Finally, the permitting authority is not required to provide public 
notice or an opportunity for the public to comment on the requested 
modification before revising the permit.
    Consequently, part 70 does not allow the permit shield to apply to 
any change processed as a minor permit modification. Any change for 
which a modifying source wishes to have the protection of the permit 
shield can only be processed through the more rigorous track unless it 
were processed under an enhanced NSR procedure (see discussion of 
administrative amendments).
    c. Description of Proposed Minor Permit Revision Procedures.--(1) 
Scope. Due to the significant improvements being proposed to the 
current minor permit modification process (subsequently discussed), the 
proposed scope of changes eligible for the new minor permit revision 
process would be increased. However, eligibility for the proposed minor 
permit revision procedures would be subject to several of the same 
gatekeepers that limit the eligibility of changes that may be processed 
through the de minimis permit revision track. These include the 
requirement that a source be in compliance with the permit terms it 
seeks to modify and a prohibition on changes to permit terms or 
conditions established to limit emissions which is federally 
enforceable only as a part 70 permit term or condition. In addition, 
the change could not be a significant revision to compliance monitoring 
requirements in the permit unless any such revision was associated with 
a change that otherwise would qualify for minor permit revision 
procedures.
    Changes eligible for minor permit revision procedures would include 
major or minor NSR or 112(g) changes that presumably did not undergo 
merged program review, with one exception. Those minor NSR actions that 
involved netting transactions would not be eligible unless the netting 
transaction at issue either provided a 30-day public comment period at 
the minor NSR stage or did not involve a single emissions increase 
greater than the area's applicable title I significance levels or a sum 
of emissions increases that is greater than the area's applicable major 
source threshold. Also eligible would be changes to compliance terms, 
even if such changes are significant, that are necessary to implement 
other changes that are eligible to be processed as minor permit 
revisions. Finally, changes that are not subject to NSR or section 
112(g) but that trigger the applicability of a Federal requirement, 
such as a SIP requirement, would be eligible for minor permit revision 
procedures.
    (2) Process. To make use of the proposed minor permit revision 
procedures, the source would first submit its minor permit revision 
application to the permitting authority. The application requirements 
would include those applicable to the de minimis process and merged 
program changes: a description of the requested change; a draft permit 
and supporting information; a demonstration and certification that the 
proposed change is eligible for the minor permit revision process; and 
an affidavit accepting the risk of operating the change prior to permit 
revision. In addition, the source would have to certify that it had 
provided notice to the public, affected States, and EPA as required by 
the minor permit revision procedures.
    As for de minimis permit revision requests, when the permitting 
authority received a minor permit revision application, it would have 
to enter it into a public docket or provide substantially equivalent 
public access to it.
    At the same time it submits its application to the permitting 
authority, the source would be required to provide notice to the 
public, affected States, and EPA of its request. The source could 
satisfy its notification requirement by publishing a public notice in a 
newspaper of general circulation in the area where the source is 
located or in a State or local authority publication or register 
designed to give general public notice, and by sending by first-class 
mail a letter to affected States, EPA, and interested persons. 
Interested persons would include any person who commented on a source's 
original permit or any subsequent revision, reopening, or renewal and 
all persons who ask the permitting authority to place them on a list of 
interested persons. The list would be maintained by the permitting 
authority and kept up-to-date on-site by the source.
    The notice itself would have to describe the change, specify that a 
copy of the revised application is available from the permitting 
authority, and briefly describe the public comment procedures required. 
It would also have to indicate that the source may implement the 
requested change after 21 days from the date of the notice if by that 
date (1) no germane and non-frivolous objection has been received from 
the public or affected States, (2) the permitting authority has not 
denied the change or transferred it for processing under significant 
permit revision procedures, and (3) EPA has not objected to the 
requested change.
    Following publication of the required notice, citizens and affected 
States would have 21 days to submit written comments or objections to 
the permitting authority. The permitting authority would be required to 
keep a publicly-available record of the comments so that EPA would be 
able to fulfill its permit review obligations and determine whether any 
subsequent citizen petition for an EPA objection should be granted. 
Permitting authorities would not be required, however, to provide any 
opportunity for a public hearing on changes processed as minor permit 
revisions.
    If the permitting authority did not receive from the public or 
affected States any written comment or objection within 21 days after 
publication of the notice, the source could implement the requested 
change on the 22nd day provided that the permitting authority had 
neither denied the request nor transferred it for processing under 
significant permit revision procedures and EPA had not objected to the 
request by then.
    On the other hand, if the permitting authority did receive a public 
or affected State comment or objection within the 21-day period, the 
source would not be able to implement the requested change on the 22nd 
day as discussed above. Instead, the permitting authority would be 
required to determine within 7 days after the close of the 21-day 
public comment period (i.e., within 28 days of the date of the public 
notice) whether the comment or objection is germane and non-frivolous 
and thus warrants denying the minor permit revision request or 
transferring it for processing under significant permit revision 
procedures.
    To be considered germane, a comment would have to object to the use 
of minor permit revision procedures for the requested change on the 
grounds that the source had failed to comply with the procedural 
requirements of the minor permit revision process (e.g., the source 
failed to send public notice to interested persons), or argue that the 
change is ineligible for the minor permit revision process because it 
conflicts with one or more of the applicable gatekeepers (e.g., the 
source is in violation of a permit term it seeks to change). To be 
considered non-frivolous, a comment would have to specify the basis for 
its objection and present factual or other relevant information in 
support of its claim. To keep the permitting authority from allowing 
the source to make the requested change, the comment would have to be 
both germane and non-frivolous. For example, the comment could not 
merely assert that the change is ineligible for the minor permit 
revision process without providing any explanation or information to 
aid the permitting authority in evaluating its claim.
    The permitting authority would have to provide a written 
explanation of whether a comment or objection is germane and non-
frivolous. The permitting authority would not be required to accept any 
recommendations that are not based on applicable requirements or the 
requirements of the part 70 program. All such written responses would 
then be placed in the administrative record of the permit revision. In 
cases of objections filed by affected States, the permitting authority 
would have to forward to EPA a written response to any of these 
objections that were not accepted as part of EPA's opportunity to 
review the requested change. Finally, any permitting authority 
rejection of a written public or affected State comment or objection 
would have to be judicially reviewable in State court following the 
permitting authority's final action on the minor permit revision 
application.
    If the permitting authority either rejects a public or affected 
State objection as not germane and non-frivolous or fails to respond to 
such objection within 28 days after public notice of the revision 
request, the source could implement the requested change on the 29th 
day after the public notification. Again, this ability to implement the 
change would be contingent both on the permitting authority not having 
denied the request or transferred it for processing as a significant 
permit revision, and on EPA not having objected to the requested change 
by then.
    It should be noted that the permitting authority may address in the 
minor permit revision process any comments that do not object to the 
use of minor permit revision procedures for the requested change, but 
instead object to an aspect of the proposed permit revision that is 
unrelated to whether the change is eligible for minor permit revision 
procedures. This would not keep the source from making the change on 
the 29th day and would not require the permitting authority either to 
deny the minor permit revision request or to transfer it for processing 
as a significant permit revision. For example, the comment could 
suggest additions to the source's proposed recordkeeping or reporting 
requirements, to which the permitting authority could respond while 
continuing to process the requested change as a minor permit revision.
    The permit program would also have to provide that if the 
permitting authority failed to act on a public objection, the commenter 
could file suit in State court to force the permitting authority to 
take action on the written comment. If the permitting authority denied 
the minor permit revision request (because, for example, the change 
failed to comply with applicable requirements) and the source had 
already implemented the change, the program would have to provide that 
the source would be liable for violating its existing permit from the 
time it implemented the change. If the permitting authority decided to 
transfer the revision request to the significant permit revision track 
and the source had implemented the change, the source would be liable 
for violating its existing permit from the time it implemented the 
change, unless the permitting authority ultimately approved its 
revision request and found that the change had been eligible for minor 
permit revision procedures. The Agency requests comment on whether, if 
the change is transferred to the significant permit revision track, the 
source should be required to cease operation of the change until a 
final decision is made on its revision request.
    In addition, the program would have to enable the commenter to 
bring suit in State court to seek an injunction against the source 
implementing or continuing to implement the change. Injunctive relief 
would have to be available in accordance with the applicable standards 
for obtaining such relief under State or local law. In proposing such a 
requirement, EPA is not proposing to promulgate a national standard 
that must be met to obtain an injunction.
    On the other hand, if the permitting authority rejected a public or 
affected State written objection within the required 28-day period, the 
commenter could obtain judicial review of that rejection after the 
permitting authority takes final action on the permit.
    As for merged program changes and de minimis permit revisions, when 
processing a minor permit revision request, the permitting authority 
would be able to revise (rather than deny or transfer for processing as 
a significant permit revision) the request without necessarily 
rendering the source liable for violating its existing permit from the 
time it implemented the requested change. Provided that the permitting 
authority's revisions to the requested draft terms and conditions are 
not necessary to qualify an ineligible change for processing as a minor 
permit revision and do not change the source's proposed determination 
of which applicable requirements it must meet as a result of the 
change, such revisions need not render the source liable for violating 
the terms of its existing permit if the source can demonstrate using 
reasonably available means its compliance with the revised permit terms 
incorporating applicable requirements.
    For changes that the permitting authority continues to process as 
minor permit revisions, the permitting authority could take final 
action to revise the permit after the close of EPA's 45-day review 
period, provided that EPA has not objected to the requested change, and 
provided that the final revision to the permit does not substantially 
differ from the originally proposed minor permit revision. Under the 
proposed part 70 revisions, the permitting authority would be required 
to act on the minor permit revision request within 60 days after 
receipt of the minor permit revision application or 15 days after the 
expiration of EPA's final 45-day review period, whichever is later. The 
required permitting authority action could take one of four forms: 
final approval of the minor permit revision request; final denial of 
the request; revision of the request accompanied by re-notice and re-
submittal of the revised request to EPA as a new minor permit revision; 
or a determination that the request is not eligible for minor permit 
revision procedures accompanied by a transfer for processing the 
request as a significant permit revision. These actions would 
constitute ``final action'' for the purpose of judicial review to which 
previous reference was made.
    When the permitting authority took final action to approve the 
minor permit revision request, the permitting authority would attach 
the approved addendum to the originally issued permit. The addendum 
would specify the date on which it took effect. Upon approving the 
requested change, the permitting authority would also have to notify 
any person or affected State who commented on or objected to the 
requested change during the 21-day public comment period for purposes 
of triggering the period for petitioning for EPA or judicial review. 
The permitting authority would have discretion, however, in determining 
the best method for providing such notice. The permitting authority 
would also have to place a copy of its final determination (including 
approvals, denials, and revisions) in the public docket in which it 
places all minor permit revision requests, or provide a substantially 
equivalent means of insuring public access to the final minor permit 
revision approval. Finally, the permitting authority would be allowed 
to extend the permit shield provided in Sec. 70.6(f) to any minor 
permit revision that had been approved pursuant to a process at least 
as stringent as the one described in this proposal.
    If the permitting authority denies or transfers a minor permit 
revision request on germane and non-frivolous grounds, it would have to 
notify any person or affected State that objected during the public 
comment period of its determination to deny the request or to transfer 
it for processing as a significant permit revision, and would have to 
place a copy of its determination in the public docket to the minor 
permit revision file.
    Whenever a requested minor permit revision is transferred for 
processing as a significant permit revision, the permitting authority 
would have to provide public notice and a further opportunity to 
comment on the proposed revision in the manner required by the 
permitting authority's applicable significant permit revision 
procedures. Such notice would have to provide an opportunity for a 
public hearing, and describe the procedures to request a hearing or 
indicate the time and place of any hearing already scheduled. However, 
after transferring the change from minor permit revision procedures, 
the permitting authority would not be required to wait the full 30 days 
before conducting the hearing. Rather, it could hold the hearing as 
soon as 14 days after publishing notice that the change has been 
transferred to the significant permit revision track. The permitting 
authority would not be allowed, however, to shorten the 30-day period 
in which the public and affected States would be able to submit written 
comments on the transferred change, and a new 45-day period for EPA 
review would begin when the permitting authority forwarded to EPA a 
subsequent proposed significant permit revision.
    It should be noted that following final action on minor permit 
revision requests, all affected parties would have all the rights 
provided them elsewhere under part 70. In other words, permittees would 
have the right to appeal and get judicial review of permitting 
authority denial of minor permit revision requests, and commenters 
would have the right to appeal and seek judicial review of permitting 
authority final approval of minor permit revisions. In addition, 
commenters would also have the ability to petition EPA to object to the 
minor permit revision request, as provided in Sec. 70.8.
    d. Rationale for Proposed Minor Permit Revision Procedures. The 
Agency believes that part 70 as originally promulgated fails to provide 
adequate opportunities for public review of the changes now eligible 
for minor permit modification procedures. At the same time, EPA is 
concerned that the current part 70 may be unnecessarily restrictive in 
allowing few changes to be processed through expedited permit revision 
tracks and requiring most changes to be processed through significant 
permit revision procedures. Under the interpretation of ``title I 
modifications'' that includes minor NSR changes, minor NSR changes 
would be ineligible for processing as minor permit modifications. 
Consequently, EPA proposes to make a broad universe of changes eligible 
for minor permit revision treatment, and simultaneously to enhance the 
public notice and procedural elements of this revision track to make 
the permit revision process, and the permit program in general, more 
usable for sources, permitting authorities, affected States, the 
public, and EPA.
    (1) Scope.--(i) Minor NSR changes. Many States and local agencies 
have extensive minor NSR programs that EPA approved into SIP's under 
section 110(a)(2) of the Act. Most of these programs provide for public 
participation for preconstruction actions at certain levels (e.g., 25 
tpy). Below these levels, however, many programs provide no public 
participation. Under EPA regulations governing minor NSR programs (40 
CFR 51.160), permitting authorities approving preconstruction actions 
are required to provide public notice and an opportunity to comment for 
such actions except to the extent EPA approved any exemptions from 
public process established in the minor NSR program.
    The EPA believes that some prior public process is generally 
necessary in the part 70 context for minor NSR changes that exceed de 
minimis levels and that did not undergo the merged program process. 
Many minor NSR actions establish facility-specific limits that keep 
sources from exceeding major source thresholds. For those limits to 
properly serve that purpose, they must reduce emissions to the extent 
claimed and they must be practicably enforceable. The importance of 
properly developed limits accordingly makes public review of those 
changes important.
    At the same time, to the extent that part 70 is largely a 
procedural regulation that does not establish new applicable 
requirements, EPA does not believe it is necessary to require that 
permitting authorities subject minor NSR actions to the significant 
permit revision process. To require the permitting authority, after 
providing a substantial preconstruction review of the change, to 
provide the additional level of review required under full significant 
permit revision procedures for all minor NSR changes exceeding de 
minimis thresholds would place an unnecessary and potentially crippling 
burden on permitting authorities and cause needless delay to many 
sources. This would be an unfortunate and unintended legacy for the 
permit program, and would conflict with the Congressional intent that 
permit revision procedures be adequate, streamlined, reasonable, and 
expeditious.
    Consequently, EPA believes that minor NSR changes should be 
eligible for the proposed minor permit revision track (with one 
exception described below). The EPA believes that the proposed minor 
permit revision process with its 21-day public comment period would 
provide adequate public review opportunities to ensure that the minor 
NSR decisions meet part 70 requirements. This reliance in part on the 
review by the permitting authority during the minor NSR process is 
consistent with EPA's policies to build upon and not unduly disrupt 
existing State and local programs and to promote the integration of 
part 70 with existing programs where possible. The EPA solicits comment 
as to whether including this category of changes within the scope of 
those eligible for minor permit revision procedures is appropriate, and 
whether such changes would more appropriately be processed through 
either a less or more expeditious process. The Agency also notes again 
that it is considering the advisability of adopting for part 70 
purposes valid State or local minor NSR exemptions from public process 
(see discussion in section III.E.3., Administrative Amendments).
    The one exception to allowing the proposed minor permit revision 
procedures to be used to process any minor NSR change involves certain 
``netting'' transactions (i.e. a single minor NSR action employing 
trades between more than one emissions increase and decrease to remain 
below major NSR significance levels and avoid processing as a major NSR 
modification). Netting transactions which would be ineligible for the 
minor permit revision process are those (1) for which at least a 30-day 
public comment period was not in fact provided and (2) that include 
either a single emissions increase greater than the applicable 
significance level or a sum of increases greater than the applicable 
major source threshold. The EPA stresses that both conditions (1) and 
(2) must be met to render the netting transaction ineligible for the 
proposed minor permit revision track. For example, a transaction of 
several increases and decreases since the last time the permit received 
public review of at least 30 days, including any single increase above 
significance levels or a series of increases the sum of which is above 
major source thresholds, would still be eligible for minor permit 
revision procedures if the NSR process for these transactions provided 
a public comment period of at least 30 days. The EPA is proposing to 
exclude this category of minor NSR changes due to concerns about the 
complexity of such transactions and their greater potential for 
significant environmental impact. The Agency foresees a greater need 
for public, affected State, and EPA oversight before these changes 
should be implemented at a source. The EPA solicits comment regarding 
the need to exclude this class of minor NSR changes from eligibility as 
a minor permit revision, whether the exclusion criteria are 
sufficiently protective, and whether there are any other classes of 
minor NSR changes that should be excluded for similar reasons.
    (ii) Major NSR changes. In response to concerns arising from State 
and local permitting authorities and from discussions with petitioners 
in the part 70 litigation, and for reasons similar to those previously 
given for minor NSR changes, EPA is proposing to allow permitting 
authorities to use the proposed minor permit revision process to 
incorporate major NSR changes that did not undergo merged program 
revision. (As noted earlier, EPA expects that all major NSR programs 
would be merged with the part 70 program, making the need for minor 
permit revision procedures for major NSR changes largely academic.) 
Since major NSR changes receive extensive review by the permitting 
authority and a minimum of a 30-day public comment period prior to 
final action by the permitting authority, EPA believes that these 
programs should not need the significant permit revision process before 
they could be incorporated into the part 70 permit. Although major NSR 
changes have more significant environmental impact than do minor NSR 
changes, EPA recognizes that the process for developing applicable 
requirements for major NSR changes is also more elaborate. The EPA 
expects that incorporation of major NSR permit terms and conditions 
into the part 70 permit would be noncontroversial.
    As with minor NSR changes, EPA believes that some additional part 
70 process is necessary to assure that applicable requirements of major 
NSR are incorporated into the part 70 permit, that any additional 
compliance monitoring terms and conditions required by part 70 are 
properly developed, and that all other part 70 requirements are 
satisfied. The EPA does not believe, however, that permitting 
authorities should need the significant permit revision process to meet 
these requirements for major NSR changes. Rather, EPA believes that the 
expedited procedures of the proposed minor permit revision process 
strike a reasonable balance between the need for permit revision 
procedures to be adequate and streamlined and the need to provide an 
appropriate opportunity for public participation. The EPA solicits 
comment on allowing major NSR changes to be eligible for minor permit 
revision procedures, and whether any additional conditions should be 
placed on such eligibility.
    (iii) Section 112(g) actions. To address concerns raised during 
development of State and local programs and discussions with the part 
70 litigants, EPA proposes to allow offsets and modifications approved 
pursuant to ``non-merged'' section 112(g) pre-operation and 
preconstruction programs to be incorporated into the part 70 permit 
through minor permit revision procedures, provided such actions were 
subject to at least a 30-day public comment period. While permitting 
authorities do not currently have EPA-approved section 112(g) programs, 
EPA notes that proposed regulations for implementing the offset and 
modification requirements of section 112(g) would require that 
permitting authorities provide a 45-day comment period for making such 
determinations. Where permitting authorities in fact provide an 
opportunity for at least a 30-day public comment period, EPA believes 
that the additional part 70 requirements described above for minor and 
major NSR changes would be adequately satisfied by the proposed minor 
permit revision process. Due to the greater risk potentially posed by 
emissions of HAP's, however, EPA solicits comment on the 
appropriateness of extending eligibility to this class of changes, and 
whether the requirement that permitting authorities provide at least a 
30-day public comment period for the section 112(g) change prior to 
starting the minor permit revision process is sufficient to ensure that 
the section 112(g) requirements are appropriately determined and 
incorporated into the part 70 permit.
    In addition to the approach EPA is proposing today, EPA is 
considering an alternative mechanism for approving section 112(g) 
offsets due to concerns which have been expressed about the delay costs 
which industries may experience as a result of the offset pre-approval 
process. Under the alternative approach which was also outlined in 
EPA's proposal notice to implement section 112(g) (see 59 FR 15504 
(April 1, 1994)), the source would submit its offset demonstration to 
the permitting authority at the time it begins operation of the 
equipment causing the increase. If the permitting authority during its 
review were to determine that the offset failed to meet the offset 
requirements of the section 112(g) rule, the source would be liable for 
violating the requirement to apply case-by-case MACT to the equipment 
causing the increase and would be subject to the full range of 
enforcement activities and penalties available under the Act. The EPA 
believes that the penalties faced by sources under the Act create an 
incentive for the source to ensure that the offset in fact complies 
with the requirements of section 112(g). Consequently, EPA believes 
that this approach also deserves consideration for a merged part 70/
section 112(g) program, particularly if it is included in the final 
section 112(g) rule. The EPA solicits comment on whether such an 
approach would provide a significant benefit to industry by reducing 
delays and whether it would create obstacles to enforcement, and the 
nature of those obstacles, by the Federal, State, or local governments 
or citizens should it be determined that the source's offset was 
inadequate. The EPA intends to incorporate into part 70 the results of 
the final rulemaking to implement section 112(g) with respect to public 
review and offsets.
    Changes triggering the applicability of other requirements under 
the Act, including MACT and SIP requirements, would generally also be 
eligible for the minor permit revision process. (For MACT standard 
incorporation, however, see discussion later in this preamble 
explaining alternative approaches to addressing changes that render a 
source subject to MACT.) While these changes would not have undergone a 
NSR process prior to the source requesting a part 70 permit revision, 
EPA believes that implementation of these requirements (with the 
probable exception of some MACT standards) will be relatively 
straightforward and that the proposed minor permit revision process 
period would thus be sufficient to afford adequate permitting 
authority, public, affected State, and EPA review. The Agency solicits 
comment on this aspect of its proposal and in particular seeks 
information on current permitting authority implementation of these 
other standards.
    To address concerns raised in discussions with petitioners, EPA 
proposes to remove the current minor permit modification gatekeeper 
prohibiting changes that violate applicable requirements, because this 
prohibition applies not only to minor permit revisions but across the 
board to all permit revisions. By applying the gatekeeper only to minor 
permit modifications, the current rule implies that significant permit 
modifications may be used to incorporate changes that violate 
applicable requirements, but no change that violates applicable 
requirements could be incorporated into a part 70 permit. Title V and 
part 70 require permits to assure compliance with applicable 
requirements. Permits may not then include terms, regardless of the 
amount of public process provided, that violate applicable 
requirements. Indeed, an important function of public process is to 
ensure that permit terms accurately reflect, and are not inconsistent 
with, applicable requirements. The principle that permit terms, new or 
revised, must assure compliance with applicable requirements is so 
fundamental to title V and part 70 that EPA believes it is unnecessary 
to apply the current rule's ``may not violate'' gatekeeper to all the 
proposed revision tracks. If a proposed permit term, whether developed 
at permit issuance or revision, violates an applicable requirement, it 
is not approvable. No additional gatekeeper is needed to reinforce that 
point.
    Another reason to delete that gatekeeper is to avoid the 
implication that any of the permit revision tracks prohibit changing 
conditions in a part 70 permit that derive from major or minor NSR 
permits. Since the NSR permits generate applicable requirements that 
become terms and conditions of the part 70 permit, issuance of a 
revised NSR permit would redefine the applicable requirement and the 
part 70 permit could then be correspondingly revised under the proposed 
minor permit revision process without violating an applicable 
requirement.
    The EPA is also deleting the gatekeeper in current part 70 that 
would make changes ineligible for minor permit revision procedures if 
they are required by the operating permits program to be processed as 
significant permit revisions. The Agency is deleting this gatekeeper 
because it too should be applied to all of the streamlined permit 
revision tracks if it is applied to any. Indeed, EPA believes this 
gatekeeper goes without saying since the permitting authority clearly 
retains authority to require changes to be processed using more 
stringent procedures than part 70 requires.
    The EPA proposes the gatekeeper prohibiting the use of minor permit 
revision procedures for changes to permit terms with which the source 
is not in compliance for the same reason it is proposing that 
gatekeeper for de minimis permit revision procedures. Consequently, EPA 
proposes that the significant permit revision process be used where 
changes need to be made to terms with which the source is not in 
compliance. The Agency is concerned, however, that the proposed 
gatekeeper, by requiring the significant permit revision process, might 
delay a source from making revisions to its permit that it can 
demonstrate to be necessary to achieve compliance with applicable 
requirements. For this reason, EPA solicits comment on the 
appropriateness of the proposed restriction, and whether additional or 
different safeguards might serve the same purpose of assuring that 
noncomplying sources do not use streamlined procedures to avoid 
enforcement actions for noncompliance. Specifically, EPA proposes to 
narrow the proposed gatekeeper to exclude situations where the source's 
proposed change has already been addressed by the permitting authority 
and the public in prior procedures, such as minor and major NSR 
actions. To the extent that these prior procedures addressed and 
remedied a source's noncompliance, EPA recognizes that it might be 
unnecessary to require that the results of these actions be 
incorporated through the more burdensome significant permit revision 
process.
    The EPA also takes comment on whether it should allow exemptions 
from the ``in-compliance'' gatekeeper when the permitting authority has 
determined that, solely as a result of new emissions-calculating 
methods or information, the source is not in compliance with a permit 
term. In such a case, EPA solicits comment on allowing the permitting 
authority to revise the permit using either the minor permit revision 
or de minimis permit revision process if the change would otherwise be 
eligible for those tracks. The EPA solicits comment on how to limit the 
exemption described to external factors, such as changes in emission 
factors or source models, rather than factors over which the source has 
control.
    The EPA proposes to retain the current gatekeeper that would 
exclude from the minor permit revision process changes to a part 70 
permit term established to limit emissions and developed through a part 
70-only process for which there is no underlying applicable requirement 
enforceable by EPA outside the part 70 permit. Such terms include 
federally enforceable emissions caps in the permit assumed to avoid 
classification as a major modification or major stationary source for a 
particular pollutant, alternative emissions limits established in the 
part 70 permit pursuant to Sec. 70.6(a)(1)(iii), alternative emissions 
limits approved pursuant to a HAP early reductions program under 
section 112(i)(5) of the Act, and case-by-case MACT limitations 
determined pursuant to section 112(j) of the Act. These classes of 
terms are established for the first time in a part 70 permit issuance 
or revision process, usually on a case-by-case basis, and are not 
otherwise federally enforceable outside the part 70 permit. They also 
lack review or approval by the permitting authority prior to the start 
of the part 70 process and, to the extent the part 70 terms or 
conditions were taken to avoid an applicable requirement, revising 
those terms and conditions could render the source subject to 
applicable requirements to which it was not previously subject. The 
Agency believes that revisions to such requirements should be made only 
after full review by the permitting authority, public, EPA, and 
affected States. Consequently, EPA continues to believe these types of 
changes should not be eligible for the minor permit revision process. 
The EPA proposes to retain the requirement that significant permit 
revision procedures apply to these types of changes, but solicits 
comment on the appropriateness of this approach.
    (2) Process. In keeping with the expansive scope of changes 
eligible for the new minor permit revision procedures, EPA believes 
more procedural safeguards are necessary to ensure that incorporation 
of a wider scope of changes through the minor permit revision track 
results in accurate, enforceable permits. First, the source would have 
to meet the application requirements like those for merged program 
changes and de minimis permit revision for the same reasons (see 
earlier discussions for descriptions and explanations). In addition, a 
minor permit revision application would have to include a certification 
that the source had provided the required public, affected State, and 
EPA notice of the requested change, as discussed below. This 
certification would assure permitting authorities that all 
prerequisites to review of the minor permit revision application had 
been met. It would also alert EPA of the presence of any grounds for 
objection to the proposed permit revision. In recognition of the 
notification requirements that would apply to the source under the 
proposed revisions to part 70, EPA would rescind the requirement that 
applications include completed forms for the permitting authority to 
use to notify EPA and affected States of the minor permit revision.
    To promote expeditious processing of minor permit revision 
requests, today's proposal requires the source, rather than the 
permitting authority, to provide direct notice to affected States and 
EPA of proposed minor permit revision actions. Notices to EPA would 
have to include the draft addendum containing the proposed revisions to 
the existing permit. This would relieve permitting authorities the 
added burden of copying and sending notice to EPA and affected States 
immediately upon receipt of applications. While this places a slightly 
greater burden on sources than does the current rule, EPA notes that 
sources are generally in the best position to provide quick notice to 
EPA and affected States, and that minor permit revision processing will 
be more expeditious as a result. The permitting authority, however, may 
retain the option of providing this notice instead of the source. 
Nevertheless, EPA solicits comment on whether there may be other 
methods for notifying EPA and affected States that better accomplish 
this goal, and on the appropriateness of sources, instead of permitting 
authorities, providing notice.
    For similar reasons, the proposed revisions to part 70 would 
require sources to provide public notice of minor permit revision 
requests. Again, EPA believes that having the source provide direct 
notice by publication and mailings to interested persons would better 
enable expeditious processing of minor permit revisions. It would avoid 
the delay that would likely occur if permitting authorities had to 
prepare and provide notice and would assure that the permitting 
authority, affected State, EPA, and public review periods would run 
from the same point in time. Public notices would have to provide 
enough information to enable the public to comment on a timely basis, 
and indicate that if the permitting authority did not receive germane 
and non-frivolous objections to the requested change within the public 
comment period, the source could implement the change, provided the 
permitting authority had not denied the request or transferred it for 
processing as a significant permit revision and EPA had not objected to 
it. The EPA believes that publication of notices in a newspaper of 
general circulation within the area where the source is located, 
supplemented by direct mailing to interested persons, would be 
sufficient to provide the required notice. The EPA solicits comment as 
to alternative means of adequately providing notice.
    As for de minimis permit revisions, to assure public access to 
minor permit revision applications, the proposed revisions would 
require that permitting authorities maintain a public docket in which 
requests are placed on the day that the permitting authority receives 
them. The EPA believes that a docket would assure that concerned 
citizens may review applications and submit pertinent comments before 
the close of the public comment period and before sources can implement 
proposed changes. However, EPA thinks there may be alternatives to a 
public docket that could adequately assure public access and proposes 
to allow permitting authorities to propose substantially equivalent 
methods in their permit programs which EPA would evaluate on a case-by-
case basis.
    The EPA proposes that public comment periods for minor permit 
revisions last at least 21 days from the date the source provides the 
public notice. The EPA believes that this is the shortest amount of 
time in which a potential public commenter could reasonably be expected 
to learn of the requested change, gain access to necessary information 
to evaluate the request, review and evaluate the application, draft 
written comments meeting the germane and non-frivolous standard, and 
submit them before the source implements the requested change. However, 
EPA solicits comment as to whether other time periods may be 
appropriate, either shorter or longer, based on State or local 
permitting experience.
    The proposed minor permit revision procedures would establish an 
admittedly elaborate set of checks and balances to ensure that the 
source and the permitting authority are motivated to anticipate and 
respond to public concerns with requested changes. The fact of public 
review and the potential for liability if its request is denied should 
instill in the source a strong incentive to exercise care in the 
preparation of its requests and its use of the procedures. The 
potential for citizen suits for failure to respond to timely public 
objection should encourage permitting authorities to respond to any 
objections. The source's self-interest should also be served by 
encouraging the permitting authority to respond to timely objections, 
to avoid suits or injunctions brought by citizens and the possibility 
of the permitting authority being ordered by a court to act on the 
objection after the source had begun to operate the change. Where the 
source or the permitting authority fails to live up to its 
responsibilities, the public can comment to that effect or resort to 
EPA or the courts, depending on the circumstances. The EPA believes the 
incentive structure established by these checks and balances is 
important to ensuring the integrity of streamlined public review of 
changes having larger potential environmental significance. However, 
the Agency is interested in comments and suggestions as to how to 
simplify the process without substantially undermining the discipline 
it would impose.
    As now provided by the minor permit modification process in the 
current part 70, a source could implement its requested change prior to 
the permitting authority taking final action on it. Sources could 
implement the change on the day after the close of the public comment 
period where no comments had been submitted, and provided that the 
permitting authority had not denied the requested change or transferred 
it to another process and that EPA had not objected to the request. The 
Agency believes that the procedural safeguards provided by the minor 
permit revision process so minimize the risk of the source operating a 
change that violates applicable requirements that it may temporarily 
exempt sources from the statute's prohibition on operations ``except in 
compliance'' with existing permit terms. Beyond the safeguards provided 
by the de minimis procedures, the minor permit revision process 
requires that sources wait to operate changes until the end of the 
comment period, so that the public has a chance to flag problems before 
operation.
    While part 70 currently allows a source to implement a minor permit 
modification upon submitting its application, EPA now believes that in 
view of the potential environmental significance of changes qualifying 
for this revision track, the permitting authority, affected States, 
EPA, and public should have some period of time in which to review such 
requests before the source implements the change. The EPA also believes 
that the proposed 21-day waiting period is not an unreasonable burden 
on sources considering the kinds of changes allowed under the proposed 
minor permit revision process.
    The deadline for permitting authority final action on minor permit 
revision requests under the proposal would be significantly shorter 
than that established by the current part 70 for minor permit 
modifications. Final action would occur when the permitting authority 
either approves or denies the request, determines that it does not 
qualify for minor permit revision processing, or revises the request 
and re-notices it and resubmits it to EPA. Final action under the 
proposal would be required to occur within 60 days after receipt of the 
application or 15 days after the expiration of EPA's review period, 
whichever is later. Currently, part 70 requires permitting authorities 
to take final action on a minor permit modification within 90 days. 
While EPA recognizes that expanding the eligibility for minor permit 
revisions over the current provisions could significantly increase the 
number of requests subject to the shorter deadline, EPA believes that 
incorporation into part 70 permits of such changes will be generally 
straightforward, as most changes will have already received permitting 
authority scrutiny and approval in other procedures, such as 
preconstruction review. Consequently, EPA believes that 60 days 
provides permitting authorities adequate time to process minor permit 
revision requests. Of course, permitting programs may be more stringent 
by providing for longer periods before permitting authorities must take 
final action. The EPA requests comment on whether a period different 
than 60 days is necessary for permitting authorities to process minor 
permit revisions.
    The proposed revisions would also require permitting authorities, 
when final action is taken on minor permit revision requests, to notify 
public commenters and affected States who commented on the request. 
While permitting authorities would have substantial discretion in 
determining the best method for providing this notice of final action, 
EPA believes that some notice is necessary to insure that commenters 
are informed as to the outcome of the process so that they may utilize 
their various opportunities to appeal to the permitting authority, 
State court, or to EPA when they disagree with the final action. 
Permitting authorities would also be required to place a copy of the 
final determination in the public docket (or substantially equivalent 
mechanism) that they maintain for minor permit revision requests. 
Again, permitting authorities would have substantial discretion in 
developing a docket system that best assures that the public has access 
to final determinations.
    Part 70 does not currently allow the permit shield to extend to 
minor permit modifications, principally due to the absence of public 
participation in the process. Since the proposed revisions to part 70 
would require that the process include a public comment period before 
sources could implement requested changes, EPA proposes to allow 
permitting authorities to extend the permit shield to minor permit 
revisions upon their final approval. The EPA is concerned that not 
allowing the permit shield could force sources to request otherwise 
qualifying changes to be processed as significant permit revisions to 
obtain the shield. This could undermine the effort to create 
streamlined and expeditious procedures for permit revisions. The EPA 
seeks comment on the appropriateness of providing the permit shield in 
these situations.
    Part 70 currently provides that if a source fails to comply with 
the terms and conditions proposed in its minor permit modification 
application during the interim period before the permitting authority 
acts to revise the source's permit, the existing permit terms and 
conditions it seeks to modify may be enforced against it. While this 
would provide some deterrent against a source making improper use of 
the minor permit revision track, it does not address the degree to 
which EPA believes a source should be liable if the permitting 
authority does not approve the minor permit revision request. The 
proposed revisions to part 70 would fill this gap by providing that the 
source would be liable for violating its existing permit from the time 
it implemented the change, if a source implements a requested change 
before the permitting authority takes final action on the application, 
and (1) the permitting authority then denies the request or transfers 
it for processing as a significant permit revision on germane and non-
frivolous grounds, or (2) EPA subsequently objects to the request. The 
EPA believes this addition is necessary to assure that sources do not 
frivolously submit and implement minor permit revision requests that 
permitting authorities are not likely to approve.
    As in the case of merged program and de minimis process changes, 
however, a permitting authority would be able to revise (rather than 
disapprove) minor permit revision requests to a limited extent without 
necessarily rendering the source liable for violating its existing 
permit. The EPA is proposing this relief for the reasons set forth in 
the administrative amendment section of this preamble where the 
provision is further discussed.
7. Significant Permit Revisions
    Under the proposed revised rule, the significant permit revision 
process would remain essentially the same as the current significant 
permit modification process, but the types of changes required to be 
processed under it would shrink dramatically. Significant permit 
revision procedures would be required for those changes that cannot be 
made as administrative amendments, de minimis permit revisions, or 
minor permit revisions. The EPA has designed the proposed revision 
procedures such that most changes that would require processing as a 
significant permit modification under the current rule should qualify 
under the proposed rule as minor permit revisions, de minimis permit 
revisions (if they are below de minimis thresholds and meet the de 
minimis gatekeepers), or administrative amendments (if they are 
subjected to a merged process). Examples of changes that would require 
processing as significant permit revisions under the proposed revisions 
to part 70 include:
    (i) Establishing or revising an emissions limit which uniquely 
resides in a part 70 permit (other than in a merged part 70 permit), 
such as (A) alternative emissions limits approved pursuant to 
regulations promulgated under section 112(i)(5) of the Act; (B) 
restrictions on potential to emit that reside only in a part 70 permit; 
or (C) equivalent RACT requirements established in a permit under the 
provisions of Sec. 70.6(a)(1)(iii);
    (ii) Netting transactions for which a 30-day public comment was not 
provided and that include any single increase that exceeds minor 
modification significance levels or a sum of increases that exceed 
major source thresholds; and
    (iii) Significant changes in existing monitoring requirements and 
relaxations of recordkeeping or reporting requirements in the permit 
(as in the current rule).
8. Solicitation of Input
    While today's proposal attempts to strike a reasonable balance 
between industry's desire to minimize permitting delays and the need 
for public review and permitting agency oversight, the Agency is 
concerned with the complexity of the proposal. The Agency is not 
proposing any specific alternatives to the proposed four-track permit 
revision system, but is seeking information that would provide a basis 
for simplifying the proposed system to improve its implementation. The 
EPA, therefore, solicits specific suggestions regarding ways to 
simplify and streamline the existing proposal. The Agency particularly 
solicits comment in the following three areas:
    1. Empirical information regarding the appropriate scope for each 
permit revision track including such information as the volume of 
changes that permitting authorities would expect under each track and 
the degree of difficulty permitting authorities would expect to 
encounter when implementing the proposed four-track system;
    2. Examples of typical source changes that would (or would not) 
receive reasonable treatment under the proposed permit revision system; 
and
    3. Alternative approaches and structures for processing permit 
revisions that meet the statutory and policy objectives of title V as 
set forth in this notice.
    Much of the complexity evident in the proposed permit revision 
process results from the need to integrate the part 70 process with the 
requirements under title I of the Act, especially the minor NSR program 
that all States implement pursuant to section 110(a)(2)(C) of the Act. 
Today's proposal provides for a number of specific avenues for 
incorporating the results of minor NSR permit actions into the part 70 
permit, including (1) an administrative amendment track for changes 
that are the product of a merged part 70/NSR process, and (2) a de 
minimis track to process revisions expeditiously for many small non-
merged minor NSR actions.
    The EPA also solicits comment on allowing a permitting authority to 
create in a source's part 70 permit a condition authorizing certain 
minor NSR changes that occur during the term of the permit to be 
incorporated into the part 70 permit by administrative amendment even 
though the changes are not the product of a merged program. This 
program would thus be similar to that proposed for the de minimis 
permit revision track in that the permitting authority would have to 
pre-authorize its use for the specific source at original permit 
issuance and subsequently examine its appropriateness for the next 
permit term at each renewal. Under the approach, the part 70 program 
would have to provide that qualifying minor NSR changes at the source 
conform to part 70 requirements for compliance monitoring and comply 
with existing part 70 permit conditions for reporting, permit fee 
payment, and annual compliance certification. In short, the permit 
program would essentially provide that the substantive requirements of 
a merged part 70/NSR program would be met for the minor NSR change. No 
permit shield would be available until the permit was subsequently 
renewed.
    The types of minor NSR actions that could qualify for this approach 
would be limited to those that (1) do not violate the existing part 70 
permit (except that changes to part 70 permit terms originally created 
in a previous NSR permit could be authorized to be made under this 
approach) and (2) do not establish permit conditions for the purpose of 
circumventing the applicability of an otherwise applicable requirement 
and/or the status of being major for a particular pollutant. As an 
example of the latter qualification, the permitting authority could 
determine that actions to restrict the hours of operation, percent 
capacity utilization, or production were beyond what is customary and 
usual for similar sources. In addition, this restriction is intended to 
preclude preauthorization for any other operational conditions taken by 
a source in minor NSR which are not directly and easily related to 
emissions but have the effect of exempting the source on the basis of 
its reduced emissions from a specific otherwise applicable requirement.
    The Agency believes the approach outlined above may be appropriate 
in that it would provide expedited processing for the many small minor 
NSR changes that occur, so long as part 70 permit content requirements 
are met. It would also ensure that the public, affected States, and EPA 
have an opportunity to review those minor NSR actions that have the 
largest potential impact on the environment. A more restrictive 
variation on the preceding approach would be to restrict the approach 
to only those NSR actions that would qualify for the de minimis permit 
revision process.
    The EPA solicits comment on the value and legality of these 
alternative approaches. The EPA specifically requests identification of 
problems associated with these modifications and possible solutions, 
such as any appropriate enhancement to the underlying NSR process.
    The EPA is also aware that some State and local agencies are 
integrating their existing NSR programs with their part 70 programs to 
create a ``unitary'' permit program (i.e., a combined permit to 
construct and operate issued under an integrated NSR and part 70 permit 
program). While EPA fully supports such integrated programs, it is 
concerned that several of the gatekeepers defining eligibility of the 
various proposed permit revision tracks may not be appropriate for 
unitary permit programs. For example, many of the terms and conditions 
of a unitary permit would be unique since a separate NSR permit would 
not exist. The EPA solicits comment on whether to grant an exemption 
from the ``unique'' gatekeeper to terms and conditions of a NSR permit 
for unitary permits, provided that the excluded terms are federally 
enforceable outside of the unitary permit (e.g., under the SIP). The 
EPA also solicits comment on whether any forms of further relief might 
be necessary for unitary permit programs.
9. Incorporation of New Standards
    This section describes the processes the EPA proposes to use to 
incorporate into the part 70 permit new standards promulgated under 
section 112. Section F. 3. of this preamble solicits comment on whether 
it would be appropriate to use these processes for other standards, 
such as SIP requirements.
    The proposal outlined below is a result of EPA providing a 
mechanism needed for the implementation of MACT standards, and it has 
not been discussed with petitioners. To the extent that conflicts 
occur, the reader should consider the processes proposed in this 
section as an alternative proposal and should expect any conflicts to 
be reconciled in the final rulemaking.
    a. Background. Section 112(d) of the Act requires the Administrator 
to promulgate emission standards for each category or subcategory of 
major and area sources of HAP's listed by EPA under section 112(e). 
Section 112(e) requires that EPA set emission standards under a 
regulatory agenda for: 40 categories by November 15, 1992; 25 percent 
of listed categories by November 15, 1994; 25 percent by November 15, 
1997; and the remaining 50% by November 15, 2000. On December 3, 1993, 
EPA published the regulatory agenda establishing the schedule for 
setting MACT standards. Since then, EPA has established MACT standards 
for the first 40 categories or subcategories26 and standards for 
more than 150 other categories have been identified for development.
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    \2\6 As of today, EPA has promulgated section 112 standards for 
the following source categories: Hazardous Organic NESHAP (HON) for 
the Synthetic Organic Chemical Manufacturing Industry (SOCMI) (59 FR 
19402, April 22, 1994), Perchloroethylene Dry Cleaners (58 FR 49354, 
September 22, 1993), and Coke Ovens (58 FR 57898, October 27, 1993).
---------------------------------------------------------------------------

    These MACT standards27 apply in various ways to both new and 
existing sources. Generally, existing sources become subject to newly 
promulgated MACT standards as a result of being in a source category 
for which EPA promulgates a MACT standard. Existing sources may also 
add new units or reconstruct existing units and must comply with MACT 
standards that apply to new units at startup. Finally, sources may 
modify existing units in such a way that the modified unit becomes 
subject to the MACT requirements for existing units for the first time.
---------------------------------------------------------------------------

    \2\7 The term ``MACT standard'' in this section refers to any 
standard promulgated by EPA under section 112 and includes Maximum 
Achievable Control Technology (MACT) and Generally Achievable 
Control Technology (GACT) standards under section 112(d) and 
standards promulgated under section 112(f) to address residual risk. 
It does not include any case-by-case standard developed by States 
under sections 112(g) or 112(j).
---------------------------------------------------------------------------

    Section 504(a) of the Act requires that each part 70 permit contain 
enforceable conditions as necessary to assure compliance with all 
applicable requirements. Part 70 defines ``applicable requirement'' to 
include any standard or other requirement under section 112 of the Act.
    Consequently, after promulgation, section 112 requirements must be 
included in the part 70 permit of any source subject to MACT standards. 
If a MACT standard is promulgated before the permit is issued, the 
permit must include the standard upon issuance, except that some MACT 
standards in which compliance requirements are not known until the 
compliance date (which may be months after promulgation of the MACT 
standard) may require a subsequent permit revision to incorporate 
compliance details that are determined at that time. If the standard is 
promulgated after the permit is issued, section 502(b)(9) of the Act 
and current Sec. 70.7(f) require that the permit be reopened if the 
source is major and more than three years remain on the term of the 
permit. The reopening and subsequent permit revision to include the 
MACT standard must occur within 18 months after the standard is 
promulgated.
    Section 502(b)(9) requires that reopenings use procedures 
consistent with those established under section 502(b)(6). If a source 
is major and less than 3 years remain on the permit term, or if it is 
nonmajor, section 112 standards would normally be incorporated into the 
permit at renewal, unless the permitting authority required reopening 
earlier. If a source would need to operate in manner that conflicts 
with its existing part 70 permit in order to comply with the MACT 
standard, however, section 502(a) would require it to apply for a 
permit revision before operating in that way. This of course does not 
mean that a source would be relieved from complying with the MACT 
standard until it obtained the necessary permit revision. The source 
must still comply with the MACT standard independently of its part 70 
permit obligations.
    Although section 112 standards vary widely in complexity and 
sometimes allow sources to select alternative control strategies, EPA 
believes MACT standards may be sorted into three broad categories, 
referred to in this discussion as ``type one,'' ``type two,'' and 
``type three.'' The type one category includes standards that are self-
implementing. That is, the detailed compliance requirements that apply 
to sources covered by the standard are specified in the standard itself 
at the time of promulgation. Although some standards in this category 
may allow sources to choose among several clearly-defined options, 
source-specific judgments are not required and the compliance 
requirements are known at the time of promulgation. The EPA expects few 
MACT standards will provide full compliance requirements at the time of 
promulgation, and consequently there will be few type one standards. A 
specific example of the first type of standard would be the NESHAP for 
industrial process cooling towers. These requirements apply existing 
well-documented control technology. Specific compliance requirements, 
such as monitoring, recordkeeping and reporting, are promulgated as 
part of the standard. While the source may be allowed to select from 
several control options, each option was subject to extensive public 
comment during the rulemaking establishing the MACT standard. Thus, at 
the time of promulgation, all compliance requirements (including 
options) for this type of standard are well known. As explained below, 
incorporation of these as permit terms and conditions should be 
accomplished in a one-step process using streamlined procedures.
    The type two category of MACT standards involves standards in which 
only a compliance date and general performance specification are known 
at the time of promulgation. Standards in the second category contain 
options from which the source will choose and then generate source-
specific compliance requirements. Most MACT standards will fall into 
this category. There are many examples of this category, including 
standards for process vents or storage tanks under the Hazardous 
Organic NESHAP (HON) for the synthetic organic chemical manufacturing 
industry (SOCMI).
    The type three category is similar to the type two category in that 
the source develops compliance requirements after promulgation, but the 
source also develops source-specific alternatives requiring case-by-
case approval by EPA or the permitting authority. This category 
includes standards providing for emissions averaging and alternative 
monitoring or recordkeeping, such as data compression techniques. An 
example of this type would include the provisions in the HON for 
emissions averaging.
    As discussed below, for each type of standard, EPA proposes 
different processes by which the MACT standard would be incorporated 
into the permit. Because EPA expects most MACT standards will be type 
two standards, it is proposing a process that would apply to that type, 
except that where the source utilizes alternative requiring case-by-
case approval, such as emissions averaging, a variation to the process 
is proposed. If the standard is a type one, EPA would exempt the source 
from the need to apply for the second-round permit revision. For 
standards promulgated by date of promulgation of the final part 70 
revisions, EPA would contain any exemptions in the final part 70 rule. 
For future MACT standards, EPA intends to establish any exemptions in 
the rulemaking for the individual MACT standard.
    The following discussion illustrates mainly the second type of 
standard, using the HON as an example. The HON applies to SOCMI sources 
and to equipment leak sources at certain non-SOCMI facilities. It 
requires compliance with equipment leak standards within 6 months after 
promulgation for some process units, followed by subsequent control of 
process units, storage tanks, and wastewater treatment units. The 
following outline shows the scheduled events under the HON (assuming no 
compliance extension has been granted under section 112(i)(3)(B) of the 
Act).
    4/21/94.--Date of promulgation or effective date, making the HON an 
applicable requirement for all SOCMI sources and non-SOCMI equipment 
leak sources.
    10/94.--Equipment leak requirements begin to apply.
    11/94.--Anticipated effective date of first State part 70 permit 
program. Permit applications are due no later than 1 year after the 
effective date of each program.
    11/95.--Implementation plan due for points not included in an 
emissions averaging compliance alternative, if the permit application 
has not been submitted. If the application has been submitted, it would 
contain the implementation plan and no separate submittal would be 
required.
    4/96.--Implementation plan due for non-emissions averaging.
    4/97.--Compliance date--all controls and monitoring equipment must 
be in place.
    9/97.--Notification of Compliance Status (NCS) due for process 
vents. This report establishes the parameters to be monitored and the 
parameter ranges that will be used to indicate proper operation and 
maintenance of the control device.
    The second type of MACT standard is illustrated by the requirements 
in the HON for the control of group 1 process vents (group 1 vents are 
required to install control technology; group 2 vents may remain 
uncontrolled). In contrast to the standard for chromium electroplating, 
specific monitoring and other compliance requirements of the control 
technology are not fully known at the time of promulgation, but will be 
determined individually for each source after promulgation and before 
the compliance date (3 years after promulgation, unless a compliance 
date extension is granted) on the basis of performance testing. As part 
of the performance test, a value for the previously selected parameter 
will be determined and reported in a compliance statement due 6 months 
after the compliance date. For example, the proper operation and 
maintenance of an incinerator on a group 1 process vent will be 
demonstrated by monitoring temperature and by operating the incinerator 
within a range that indicates proper operation and maintenance of the 
control device. For process vents, the specific compliance requirements 
are required to be reported in the NCS, which is due 5 months after the 
compliance date. Under today's proposal, permits issued just after 
promulgation of the standard would include a statement that the process 
vent requirements of the HON are applicable and a compliance schedule 
for meeting those requirements, but need not contain specific 
compliance requirements until those are reported in the NCS.
    The HON also illustrates the third type of MACT standard, since it 
contains options for sources to develop alternatives requiring case-by-
case approval, such as emissions averaging or data compression 
techniques. Although prior approval of these alternatives is required, 
the specific values needed to assure compliance with the standard, 
including the alternative, would not be known until reported in the 
NCS.
    b. Proposed Approach. The Administrator believes that the part 70 
permitting process should enhance compliance with all applicable 
requirements, including section 112 standards. Requirements governing 
the content of the part 70 permit and the duty to reopen it should 
therefore recognize and enhance compliance with applicable MACT 
standards. The EPA must balance the goal of enhancing compliance 
against the likely reality that large numbers of section 112 standards 
(including in some cases multiple standards for different units in the 
same facility) will need incorporation into part 70 permits, and that a 
large number of permit reopenings could be involved. In striking this 
balance, several questions are apparent; the key question being when 
must the permit reflect the MACT standard and how should the terms and 
conditions necessary to enforce it be incorporated into the permit? 
Other questions involve whether and to what extent compliance with the 
MACT standard will require a part 70 permit revision before the source 
can make changes in control equipment or monitoring necessary to comply 
with the standard. This proposal attempts to answer these and other 
questions about how requirements should be established in its part 70 
permit in order to comply with new section 112 requirements.
    Where a new standard is promulgated after the permit has been 
issued, section 502(b)(9) requires that permits for major sources with 
more than 3 years remaining before expiration must be reopened to 
incorporate the standard within 18 months after promulgation of the 
standard. The Act also provides some specific guidance on the process 
for reopening the permit within the 18-month period. Section 502(b)(9) 
requires that reopenings be expeditious and consistent with procedures 
established under section 502(b)(6). Thus, the mandate in section 
502(b)(6) for adequate, streamlined, and reasonable procedures for 
expeditious review of permit actions applies to reopenings as well as 
permit revisions, and includes the incorporation of new standards.
    As described in more detail below, the Administrator proposes to 
adapt the proposed four-track permit revision system to facilitate the 
expeditious incorporation of MACT standards, rather than create new 
procedures explicitly for MACT standards. Additional permit revision 
tracks specifically to address incorporation of MACT standards would 
unnecessarily complicate an already complicated system. Moreover, the 
Agency sees no reason to distinguish the need to revise a permit 
expeditiously to comply with a MACT standard from the need to revise it 
expeditiously for other reasons previously discussed, such as source-
originated changes to respond to market conditions.
    Section 70.7(f)(2) of the current rule requires any reopening to 
incorporate new applicable requirements to follow permit issuance 
procedures. Section 502(b)(9) of the Act, however, does not 
specifically require this level of process in all cases, but rather 
refers to section 502(b)(6), which itself addresses both permit 
issuance and permit revisions. The EPA therefore believes it has 
discretion under the Act to provide for more expedited reopening 
procedures where appropriate. The section 112 standard-setting process 
has evolved considerably since promulgation of the current 
Sec. 70.7(f)(2). Today's proposal to modify this part 70 requirement is 
prompted by an enhanced understanding of the section 112 program, both 
with respect to the characteristics of section 112 standards, and with 
respect to the administrative burden posed by the need to incorporate 
the many new Federal standards that will become applicable over the 
next several years.
    Selection of a particular permit revision track to incorporate a 
MACT standard will depend on the extent to which the standard 
establishes how compliance by an individual source will be determined 
(i.e., whether it is type one) and on whether the MACT standard has 
been promulgated at the time of permit issuance. Generally three 
situations will arise where the permit must be issued, revised, or 
reopened to incorporate a MACT standard. The first is where the 
promulgation of the MACT standard precedes initial issuance of the 
permit. In this situation, the permit generally must incorporate the 
standard as an applicable requirement upon issuance. The second 
situation arises where the permit is issued and is followed by the 
promulgation of a standard. In this case, the permit must be revised or 
reopened to incorporate the standard, if the source is major and more 
than 3 years remains before permit expiration, or the new standard may 
be incorporated into the permit at renewal. The third involves a source 
that is not subject to the standard until it makes a change that causes 
it to be covered by the standard. The process for incorporating 
standards into permits for each of these situations is discussed for 
each situation in detail below.
    (i). MACT Incorporation Upon Initial Permit Issuance. Where the 
effective date of the newly promulgated standard would coincide with or 
precede the initial issuance of a part 70 permit, the permitting 
authority would be required in most cases to place the standard in the 
permit upon issuance. If the source has filed a complete part 70 permit 
application before the standard is promulgated, the standard would be 
added to the permit, based on additional information supplied by the 
source. The proposal allows an exception where 90 days has passed since 
the close of the public comment period, in which case, the permit, 
after initially issuing, would be reopened to incorporate the standard 
within 18 months of promulgation of the standard (see section IV.F.1. 
of this preamble for further details).
    If the standard is self-implementing (i.e., type one), the 
permitting authority will incorporate permit terms implementing the 
standard directly into the permit upon issuance. Standards of this type 
would not require a subsequent permit revision to include more specific 
compliance data, since all requirements needed to meet the standard 
(including all emissions standards or percent reduction requirements, 
compliance deadlines, testing and monitoring, recordkeeping and 
reporting requirements) are set forth in the standard itself and can be 
incorporated into the permit at issuance. Any of these requirements 
having future effective dates would be included in the permit as part 
of the compliance schedule required under Sec. 70.6(c)(3).
    Standards that are not self-implementing (i.e., type two or type 
three) would require a two-step process. In the first step, the permit 
would be issued to include (1) a statement that the standard is an 
applicable requirement, (2) a compliance schedule (including 
milestones) for meeting the standard, (3) a requirement to submit any 
implementation plan or reports required under the MACT standard, and 
(4) a requirement to apply, by the deadline for the compliance 
statement, for a minor permit revision or significant permit revision, 
whichever is indicated in the MACT rulemaking (unless the compliance 
statement is due within 6 months of the expiration date of the permit, 
in which case, the application referred to above could be submitted 
with the application for permit renewal). The MACT rulemaking would 
indicate any compliance schedule milestones and any additional 
conditions to be placed into the permit.
     As a federally-enforceable condition of the permit, the compliance 
schedule would require the source to take all interim and final actions 
required to demonstrate compliance with the applicable standard. A 
typical compliance schedule would include a schedule for submission of 
the initial notice, the implementation plan, and the compliance 
statement or NCS. Nothing in the compliance schedule, of course, may 
relieve a source from compliance with the underlying MACT standard.
    The EPA proposes that all information required to be submitted by 
the permittee would be promptly placed by the permitting authority in a 
docket maintained for that source and made accessible to the public. 
The details of a source's compliance strategy, such as those contained 
in the HON implementation plan, would therefore remain outside the 
permit until the second revision, but would be publicly available 
through the docket. The compliance schedule would provide enforceable 
protection against late or inadequate action by the source in meeting 
MACT deadlines (in addition to enforcement powers under the standard 
itself), but the permit would not need to be revised if, up to the 
compliance statement deadline, the source wanted to change details in 
its initial compliance strategy, provided the change did not affect 
interim compliance milestones in the permit. The public would have 
access to information subsequently placed in the docket, but would not 
have an opportunity to comment formally on its content until the second 
reopening. The Administrator solicits comment on this approach and, in 
particular, whether it needs to require information, such as the 
implementation plan, to be placed in a public docket.
    The second step of the process would begin at the compliance 
statement deadline with the application for the appropriate second-
round permit revision. The EPA proposes that in most cases, the permit 
would be revised using the minor permit revision process proposed in 
Sec. 70.7(g). A source subject to the HON, for example, would apply for 
the second step revision at the due date for the NCS (e.g., 5 months 
after the compliance date for process vents). At this time all 
remaining permit terms necessary to implement the applicable standard 
would be placed into the permit, including final decisions of unit 
applicability, monitoring requirements, and compliance terms based on 
performance test results.
    For the third type of standard involving alternatives requiring 
case-by-case approval, such as emissions averaging or non-automatic 
monitoring or reporting (e.g., data compression), EPA proposes that the 
second step revision would occur using the significant permit revision 
process. The EPA believes this process would afford the public 
sufficient additional time in which to review the adequacy of proposed 
alternatives.
    The proposed use of the minor permit revision track for the second 
step is appropriate for type two standards, where final compliance or 
monitoring requirements will not be known until the NCS is due. During 
development of these standards, EPA with public review has selected and 
approved the choices available to the sources with respect to control 
strategies and monitoring. Sources then select among these options and, 
in applying and testing these approved techniques for individual units, 
identify specific parameters and corresponding values. The EPA believes 
the results of this selection process should not require a lengthy 
review procedure, and the minor permit revision process should be 
adequate to review the application of the previously-approved options 
to the source. In contrast, under the type three standards, a source 
would develop source-specific alternatives that require case-by-case 
approval, such as emissions averaging, entirely within the permit 
process with no prior public review. In EPA's view, the development of 
alternatives such as emissions averaging, and the compliance terms 
necessary to implement them warrants the significant permit revision 
track. However, considering that the public will have the opportunity 
to comment on these alternatives during rulemaking promulgating each 
MACT standard, the Agency solicits comment on whether the additional 
public review under the significant permit revision process (compared 
to the minor permit revision process) would be necessary. The EPA in 
particular solicits comment on whether such additional public comment 
is necessary for alternatives involving nonautomatic data collection or 
recordkeeping (such as data compression), compared to those involving 
emissions averaging.
    With two exceptions, EPA proposes that the source would apply for 
the second-step of the permit revision by the time it must report 
compliance with the applicable standard (e.g., for the HON, the source 
would apply when the NCS is due). The application must meet 
requirements in the permitting authority's program for complete 
applications, including those proposed at Sec. 70.7(g)(2). Waiting 
until the compliance statement (or NCS) due date for a complete 
application is appropriate because this is when the source would first 
report the compliance information needed to establish enforceable part 
70 permit conditions. The EPA believes that requiring complete 
applications any sooner could result in substantially more permit 
revisions as the detailed compliance requirements might change before 
the compliance deadline.
    The first exception to the proposal described above would be where 
the compliance statement date occurs within 6 months of permit renewal 
(i.e., the end of the permit term). In this case, EPA proposes that the 
source could submit its application for the second step revision along 
with its application for permit renewal. The second exception is where 
terms of an existing part 70 permit would not allow the source to make 
changes necessary to comply with the MACT standard. In this case, the 
permit must be revised before operating the change, in order to comply 
with section 502(a), which requires that a source with a part 70 permit 
may operate only in compliance with its permit.
    The permit shield would not be available for any administrative 
amendment under this process, but would be available for type two and 
type three standards upon issuance of the second-step permit revision 
containing the detailed compliance requirements. The EPA believes the 
permit shield should not be available for the initial permit in a two-
step process, because the source will be subject to the substantive 
requirements of the MACT standard before the second-step permit 
revision is completed to incorporate the substantive compliance terms 
necessary to implement the standard. If enforcement action needed to be 
taken against a source that had not yet completed its performance 
tests, a permit shield could interfere with such action, since the 
permit would not yet contain the compliance requirements necessary to 
enforce the standard. The Agency solicits comment, however, on whether 
the permit shield should be available, with regard to the applicability 
determination only, for the second type of standard upon initial 
issuance of the permit.
    (ii). MACT Incorporation Through Reopening. Mandatory Reopening. 
Where a permit has been issued prior to the promulgation of a MACT 
standard, section 502(b)(9) and current Sec. 70.7(f) require reopening 
of a permit for a major source if 3 or more years remain before it is 
due to expire. For reopenings to incorporate new standards, EPA 
proposes to use essentially the same process described above for 
initial permit issuance, but with some modifications (see proposed 
revisions at Sec. 70.7(e) (1)(vii) and (4), and Sec. 70.7(i) (2) and 
(3)). For type one standards, the permit would be reopened by the 
permitting authority in a one-step process to incorporate the new 
standard and all permit terms necessary to implement the standard, 
including a schedule for achieving compliance with the standard by the 
applicable deadline. Instead of using the full permit issuance 
procedures, however, the EPA proposes to revise current Sec. 70.7(f) to 
allow use of the administrative amendment procedures for one-step 
reopenings. The EPA believes this process is appropriate because for 
these types of standards, the applicability is well known (typically 
based on information supplied by the source in its initial notice) and 
the standard prescribes the compliance terms applicable to the source. 
Sources would, of course, have the option of contesting any terms 
established in the permit within the time limits provided by the 
permitting authority for judicial review (see Sec. 70.4(b)(3)(xii)).
    For the second and third type standards, the permit would be 
reopened using a two-step process. The initial revision would be made 
using the same administrative amendment process just described for the 
one-step process. For the second revision, EPA would allow the use of 
the minor permit revision procedures, except for type three standards 
involving alternatives requiring case-by-case approval, such as 
emissions averaging, in which case EPA would require the significant 
permit revision process.
    The initial reopening and revision, using administrative amendment 
procedures, would contain (1) a statement that the new standard is an 
applicable requirement, (2) a schedule (with milestones) for achieving 
compliance with the standard by the applicable compliance date, (3) a 
requirement to submit any implementation plan or report required under 
the MACT standard, and (4) a requirement to apply, by the deadline for 
the compliance statement, for a minor permit revision (or a significant 
permit revision if alternatives requiring case-by-case approval are 
being used). If, however, the compliance statement is due within 6 
months of the expiration date of the permit, the application for the 
minor or significant permit revision could be submitted with the 
application for permit renewal. The MACT rulemaking would indicate any 
additional compliance schedule milestones or other conditions to be 
incorporated into the permit.
    For all MACT standards, EPA proposes to revise existing 
Sec. 70.7(e) to provide (but not require) that the permitting authority 
may begin the administrative amendment process on the date on which the 
initial notice is due under the MACT standard. Under the HON, for 
example, the initial notice is due 120 days after promulgation.
    If EPA receives the initial notification because the MACT standard 
has not yet been delegated to the State or local agency, EPA will send 
the notice to the permitting authority, and upon receipt of that 
notice, the permitting authority could begin processing the 
administrative amendment. In many cases, permitting authorities could 
have taken automatic delegation of MACT standards (or at least the 
responsibility for receiving the initial notification) under an 
approved 112(l) program. Even where delegation of an individual MACT 
standard is needed and the process to accomplish it is lengthy, EPA 
assumes that permitting authorities will not be prohibited from 
incorporating the compliance schedule and other brief conditions 
described above into the permit as an administrative amendment within 
18 months after promulgation of the standard. Nonetheless, the Agency 
solicits comment on whether the proposed processes may be adversely 
affected by a State or local agency's need to obtain prior delegation.
    The EPA also proposes to revise part 70 to provide that the 
permitting authority could waive the requirement in Sec. 70.7(f)(3) for 
a 30-day reopening notice to any source that had submitted the initial 
notice. If a source that the permitting authority believes is subject 
to the standard fails to submit an initial notice by the due date under 
the MACT standard, the permitting authority would send it a 30-day 
notice of its intent to reopen the source's permit as now provided 
under Sec. 70.7(f)(3). This notice would also contain the permit 
conditions that the permitting authority would incorporate into the 
permit upon reopening. The permitting authority would then initiate an 
administrative amendment to the source's permit, unless the source 
convinces the permitting authority that it is not subject to the 
standard. Administrative amendments would need to be effective by 18 
months after promulgation of the MACT standard in order to comply with 
section 502(b)(9).
    To ensure that reopening takes place for all sources subject to the 
standard, EPA proposes that the permitting authority would be required 
to publish a public notice listing all sources who had submitted an 
initial notice and whose permits had been reopened. The notice would 
also list any sources that had objected to an initial notification from 
the permitting authority. The EPA proposes to require permitting 
authorities to provide a 30-day period for the public to comment on the 
adequacy of the list and whether they believe any other sources are 
subject to the standard and should be listed. The EPA proposes that 
permitting authorities would start the 30-day period at such a time as 
to allow for completion of any additional reopenings within 18 months 
after promulgation of the section 112 standard, as required in section 
502(b)(9). If the permitting authority determines that the permit for 
an unlisted source should be reopened, the permitting authority would 
provide a 30-day notice to the source (as in the case of sources 
failing to submit an initial notice), followed by administrative 
amendment of the permit. Any failure by the permitting authority to 
respond to public comments or a decision not to heed public comments 
would be judicially reviewable in State court.
    As described previously, the permit shield would not be available 
for any administratively-amended permit due to lack of full review 
during the administrative amendment process. At the option of the 
permitting authority, this shield could be given to a source after 
completion of the subsequent revision using either the minor permit 
revision or significant permit revision process, as appropriate. The 
EPA points out that a permitting authority would also have the option 
of requiring sources to use the minor permit revision process if they 
want the permit shield for a type two or type three standard, or if 
they want to seek an extension of the compliance deadline under section 
112(i)(3)(B) of the Act.
    Under the process just described, the permitting authority would 
supply the revised permit terms that would be incorporated into the 
permit in the administrative amendment process. The EPA solicits 
comment, however, on whether it should also allow the permitting 
authority to require the source to submit an application for 
administrative amendment. This could potentially free the permitting 
authority from the need to develop numerous permit amendments (even 
though the contents would be similar if not identical to each other). 
However, it would likely be less efficient and could still require 
considerable processing by the permitting authority before reopening of 
the permit could begin.
    Discretionary Reopening. If a part 70 permit has less than 3 years 
left on its term when a new standard is promulgated, the permit is not 
required to be reopened (see section 502(b)(9) and proposed 
Sec. 70.7(i)). The permitting authority could choose to reopen the 
permit using the processes described in the preceding section, or it 
could wait until renewal to revise the permit to incorporate the new 
standard (using the same procedures as initial permit issuance). If it 
chose to wait until renewal, a two-step process would likely be 
required for type two MACT standards, since in most cases, the 
compliance statement date would occur after the deadline for the 
renewal application, and the substantive compliance requirements would 
not be available in time for the renewal application. As before, EPA 
proposes that the second-round revision would be processed as a minor 
permit revision, unless alternative compliance methods such as 
emissions averaging are involved, in which case the significant permit 
revision process would be used.
    Two situations, however, may require the prior revision to the 
permit and would not allow the permitting authority to wait until 
renewal. The first situation is where the operation of a control 
strategy or monitoring technique is blocked by the current terms of the 
permit. For example, monitoring conditions in a part 70 permit for an 
existing incinerator may need to be revised before an affected unit 
subject to a new MACT standard can be ducted into the existing 
incinerator. Some of these situations can be quite complicated and can 
even require relief from current monitoring conditions in order to 
perform tests necessary to develop new ones. As discussed elsewhere 
(see section III. E.9., Alternative Option for Monitoring Changes), the 
Administrator proposes that the minor permit revision process generally 
would allow adequate review of this situation.
    The second situation involves the commonplace need to obtain 
preconstruction approval under a State or local minor NSR program. New 
control devices cannot usually be installed without a State or local 
NSR permit, especially where emissions of criteria pollutants are 
likely to increase as a result of adding the control device. This is 
often true for incinerators, which increase NOX and CO, while 
decreasing HAP's and VOC. As previously discussed, today's proposal 
offers several options for either merging a minor NSR permit and part 
70 permit into one process or processing the minor NSR permit in a 
subsequent, expeditious part 70 permit revision. In addition, EPA has 
also solicited comment elsewhere in today's notice on whether increases 
that do not violate exiting permit terms and conditions could be 
eligible for off-permit procedures. Under this approach, a source would 
have up to 6 months to apply for a permit revision (see section III. B. 
of this preamble).
    (iii). Source Changes That Trigger New or Additional MACT 
Requirements. Once a source's permit has been issued to assure 
compliance with any existing MACT standards, several types of changes 
may occur that trigger new or additional requirements. Even if a 
source's permit has been issued or reopened to incorporate a new MACT 
standard, the source may make changes that render it subject to other 
provisions of the MACT standard that are not included in the permit, or 
that do not currently apply to that unit in the permit. These 
requirements must be incorporated into the permit for the appropriate 
units.
    One type of change is where an existing unit, as a result of a 
change at the source, becomes subject to a MACT requirement already 
promulgated. Since this case involves a source becoming subject to a 
promulgated standard as a result of a change it makes, revision of the 
permit, rather than reopening, is required. As a result, the source 
would have to submit a complete application prior to operating the 
change (unless it would be eligible for off-permit processing). As 
described previously for reopenings to incorporate MACT standards 
promulgated after permit issuance, the initial revision could be 
processed as an administrative amendment. This procedure would be 
appropriate where the source becomes subject to a standard due to a 
change at the source where the change either triggers a type one MACT 
standard, or triggers a type two or three standard prior to the 
deadline for submittal of the NCS. Where the source triggers a type two 
or three standard after the NCS is due, the standard would have to be 
incorporated through a minor permit revision or significant permit 
revision, respectively.
    An example of this is a situation where a group two (uncontrolled) 
process vent subject to the HON becomes a group one unit (subject to 
MACT) by increasing its throughput. This could occur, for example, 
because a criteria for group one units is flow rate, and increasing the 
throughput could cause an increase in flow rate and trigger the group 
one requirements. The HON requires that sources use their periodic 
reports to propose how and when points that change their status (i.e., 
group one to group two) will be controlled.
    Another type of change would occur where a source subject to a MACT 
standard switches from one control technique to another type, both of 
which are allowed by the standard. For example, a source subject to and 
in compliance with the HON may switch from incineration to a different 
technique approved as pollution prevention, say, to reduce NOx 
emissions. The switch would require a different set of compliance 
monitoring provisions that would need to be incorporated into the 
permit. If the switch could be made without violating the existing 
permit, and there would not be a net emissions increase, the EPA 
believes the source would be eligible for off-permit procedures, and 
could defer applying for a permit revision until 6 months after 
operation. Since the subsequent permit revision process would address 
detailed compliance terms within a generally approved control strategy, 
EPA believes that the minor permit revision process would be 
appropriate as the subsequent revision process.
    Generally, new or reconstructed units must meet more stringent MACT 
requirements than existing units and must comply upon startup. (Under 
the HON, for example, requirements that apply to new units are 
different from those that apply to reconstructed units.) It is also 
likely that most new or reconstructed units will be subject to State or 
local minor or major NSR. The Administrator again proposes that minor 
and major NSR permits, provided they are enhanced to meet part 70 
requirements, are acceptable forums for addressing and establishing 
part 70 permit conditions needed to assure compliance with MACT 
standards. Thus, the merged preconstruction review process applying to 
minor NSR permits would also revise the part 70 permit to incorporate 
the MACT requirements applicable to the source.
    If the NSR process were merged, the MACT incorporation could be 
processed under merged NSR/part 70 administrative amendment procedures. 
To the extent that compliance monitoring requirements are not known 
when the merged permit is issued, a subsequent minor permit revision 
would be needed to incorporate those requirements once they are 
determined, unless the source needs to make complex judgments such as 
emissions averaging, in which case a subsequent significant permit 
revision would be needed. If the NSR action were not merged, the part 
70 revision would be eligible under the minor permit revision 
procedures, or if it met the criteria, eligible under de minimis permit 
revision procedures.
    Some source changes may trigger the requirements of section 112(g), 
instead of triggering requirements of the MACT standard. For example, a 
source with some units to which a MACT standard applies may have other 
units for which there is no MACT standard and if these non-MACT units 
are modified, they would become subject to section 112(g) requirements. 
The EPA has proposed rules to implement section 112(g) at 59 FR 15504 
(April 1, 1994). The question of whether and to what extent the 
procedural requirements of section 112(g) will apply after the 
promulgation of a MACT standard will be addressed in the final section 
112(g) rule.
    c. Solicitation of Additional Comment. The Administrator solicits 
comment on the appropriate processes for incorporating new standards 
and solicits information regarding any types of changes other than 
those described above that would require a permit revision after the 
relevant standard has been incorporated into the permit. As stated 
earlier with respect to the proposed four-track permit revision system, 
the EPA is particularly interested in suggestions that would improve or 
simplify the implementation of the proposed approaches, provided they 
are consistent with the requirements of the Act and the implementation 
principles described earlier.
    The EPA also solicits comment on the extent to which the proposed 
processes for incorporating MACT standards should be made available for 
other standards or requirements, either nationally promulgated or 
adopted by State or local agencies and approved by EPA into SIP's. 
While EPA does not believe that the proposed processes would be 
appropriate for source-specific control requirements such as BACT or 
LAER established in a major NSR process, source-specific RACT, or case-
by-case MACT under section 112(g), the Agency is willing to consider 
comments regarding application of the proposed processes to these 
requirements.
    In particular, the Agency solicits comment on whether today's 
proposal regarding incorporation of MACT standards would also apply to 
requirements for RACT. These are applicable requirements for part 70 
permits in ozone nonattainment areas and transport regions, and over 
the next several years, State and local agencies will be adopting new 
RACT requirements as revisions to their SIP's. The EPA believes that, 
because these requirements will have undergone public review at the 
State, local, and Federal level, and EPA review prior to adoption into 
the SIP, use of the same processes as described above for MACT 
incorporation should be adequate. The EPA solicits comment, however, on 
whether the proposed processes are appropriate for RACT incorporation 
and any specific modifications that would be needed to adapt the 
processes to RACT requirements.
    The Agency also solicits comments on whether the proposed processes 
described above for MACT incorporation would be appropriate for NSPS. 
Since these standards apply exclusively to new sources and 
reconstructed existing sources, they will generally be processed under 
State or local NSR programs, although some agencies exempt source 
changes subject only to NSPS unless they are associated with an 
emissions increase. If an agency does apply NSR to these sources, EPA 
believes the proposed processes for MACT incorporation may be 
unnecessary, because the agency could already provide for processing 
under the four-track system (e.g., administrative amendment procedures 
would be available for merged NSR actions). For permitting authorities 
that exempt NSPS sources from NSR, however, EPA believes the proposed 
processes may be useful and solicits comment on how they should be 
applied to NSPS.
10. Alternative Option for Monitoring Changes
    a. Overview. Operating permits serve two functions with respect to 
compliance monitoring. One function is to consolidate and reiterate the 
testing, monitoring, and recordkeeping provisions required by the 
underlying applicable requirements. The other function is to allow 
approval of equivalent or improved monitoring or recordkeeping methods. 
This latter function is served through the application of enhanced 
monitoring or the application of the periodic monitoring provisions as 
set forth in Sec. 70.6(a)(3)(i)(B).
    Where enhanced monitoring or periodic monitoring applies, it is 
implemented through the operating permit. Therefore, any changes to 
enhanced monitoring protocols, or periodic monitoring methods, would 
occur pursuant to a revision to the source's part 70 permit. Where the 
proposed change to monitoring is not part of enhanced or periodic 
monitoring, but originates from an underlying applicable requirement in 
the SIP, NSPS, or NESHAP, additional process beyond a part 70 revision 
may be required. For example, approval of an alternative NSPS or NESHAP 
monitoring method currently requires the review and concurrence of EPA 
Headquarters. Likewise, in order to provide a change to the SIP 
monitoring requirement, the SIP must be structured to ``allow'' 
alternatives to be developed in the part 70 process (see 
70.6(a)(1)(iii)). Thus the SIP must contain language that enables the 
permit to provide for alternatives that are ``at least as stringent 
as'' existing requirements, and to provide sufficiently specific 
criteria to make that determination (i.e., the part 64 requirements).
    The EPA recognizes that modifications in source operation may 
affect or alter the method by which a source monitors compliance. Such 
monitoring changes may range from a simple re-calibration of the 
existing monitoring devices, to a request for an entirely new 
monitoring method. The current part 70 provides that any 
``significant'' change in monitoring must be processed as a significant 
permit modification. The regulation does not define the term 
significant, beyond identifying a ``relaxation'' in reporting or 
recordkeeping terms and conditions as significant, leaving further 
distinctions to be defined through guidance and case-by-case analysis. 
The only changes in monitoring that are clearly identified in part 70 
as appropriate for a lesser level of review are increases in monitoring 
and reporting frequency, which may be implemented through an 
administrative permit amendment.
    Under the proposed four track permit revision system developed 
during settlement discussions with the part 70 rule litigants, the test 
for determining whether a change to existing monitoring permit terms or 
conditions is significant would still be relatively undefined, and 
continue to be based largely on whether the change represented a 
relaxation of reporting or recordkeeping permit terms or conditions. 
While the proposed four track system does provide further specifics 
regarding what types of monitoring changes would be eligible for de 
minimis permit revision or minor permit revision procedures, EPA is 
concerned that the proposal may overly rely on the ``significance'' 
test described above, and that the tests for eligibility for de minimis 
and minor permit revisions could both be very difficult for permitting 
authorities to implement and might not take into account the particular 
considerations associated with monitoring changes.
    For example, the proposed de minimis criteria would allow any 
monitoring change, no matter how significant, that is associated with a 
change that otherwise qualifies as a unit-based de minimis change, to 
be incorporated through de minimis procedures. However, the proposed 
increment based criteria could exclude from eligibility minor changes 
to monitoring that States currently routinely process with little EPA 
oversight. Moreover, the proposed criteria for minor permit revision 
eligibility would allow any monitoring change, no matter how 
significant and whether or not the permitting authority had prior 
opportunity to review the change, to be processed as a minor permit 
revision if it was necessary to implement any other change that was 
otherwise eligible. Finally, both the proposed de minimis and minor 
permit revision criteria would exclude from eligibility changes 
involving limits that had been established as federally enforceable 
only through part 70 procedures, thus potentially requiring all changes 
to enhanced or periodic monitoring protocols, no matter how minor, to 
be processed as significant permit revisions. The EPA notes that these 
criteria might be perceived as in conflict, and could consequently pose 
substantial difficulties for permit authority application of them.
    The EPA now believes that the treatment of virtually all monitoring 
changes as significant permit modifications under the current rule 
could be inconsistent with the goal of providing expeditious, 
streamlined, and adequate review pursuant of permit revisions. 
Moreover, while the four track permit revision system that EPA 
developed in the context of settlement discussions with the part 70 
litigants provides some flexibility for many types of changes requiring 
permit revisions, EPA is concerned that this flexibility could be 
limited if permitting authorities find it too difficult to apply the 
eligibility criteria and associated changes to the existing monitoring 
methods are required to undergo greater review than the associated 
physical or operational changes. This is particularly true in light of 
the proposed coverage for part 64 and consequent greater potential for 
changes in monitoring approaches and related compliance terms. 
Consequently, to avoid this problem, EPA also proposes as an option 
alternative provisions governing changes involving monitoring 
requirements that recognize the need for certain types of changes to 
existing monitoring methods to undergo more expedited review through an 
appropriate permit revision track, obviating the need to rely on the 
term ``significant'' in the existing part 70 regulations to determine 
what changes must be processed as significant permit revisions. In 
structuring the review for changes to monitoring or recordkeeping 
requirements under this option, EPA has essentially adhered to the 
four-track system proposed today. However, to implement the alternative 
option, certain provisions in the current proposed tracks would need to 
be modified, since they were developed in the context of the litigation 
settlement discussions prior to EPA's more specific treatment of the 
monitoring issue.
    The EPA wishes to stress that this alternative option was developed 
internally, after settlement discussions had concluded on the 
flexibility issues. However, the litigants had been apprised that EPA 
would continue to work on the monitoring issue after the settlement 
discussions, and that the Agency would offer additional provisions 
regarding monitoring changes in this proposal. In some aspects, the 
alternative option conflicts with particular provisions of the proposed 
four track permit revision system, and revisions to the proposed system 
would be required to integrate it with the alternative option discussed 
below. The EPA believes that such integration is viable, could result 
in a permit revision system that better provides for appropriate permit 
revision procedures for monitoring changes, and would better avoid 
rendering changes that otherwise would qualify for expedited process 
from being rendered ineligible due to the associated monitoring 
changes.
    The EPA believes that changes in monitoring must undergo sufficient 
review to ensure that any method continues to be representative of 
compliance and capable of identifying deviations consistent with the 
requirements for enhanced monitoring and periodic monitoring. A 
monitoring method that is unable to identify deviations from emission 
standards fails to have the ability to assure compliance. Such a result 
would be in conflict with the obligation under section 504(c) of the 
Act to issue permits that set forth monitoring provisions that assure 
compliance with all permit terms and conditions, and would not allow 
for the identification of permit violations necessary to implement 
section 502(a) regarding the unlawful operation of sources in violation 
of the permit.
    The proposed alternative option regarding changes in the monitoring 
method contained in the existing part 70 permit is intended to better 
enable such changes to take advantage of the four-track streamlined 
permit revision system also proposed today. This option notably does 
not address the process for sources to comply initially with part 64 
and periodic monitoring. The EPA believes that the level of review 
required by a significant permit revision under the proposed four-track 
system may not be necessary for all changes to an existing monitoring 
method, and that certain types of monitoring changes should be able to 
take advantage of the expedited review provided in the other three 
permit revision tracks. The option discussed below is intended to 
better match the review process in the previously discussed permit 
revision tracks to the scope, nature, and environmental significance of 
the requested monitoring change.
    The alternative option also introduces the concept of using the 
criteria proposed in 40 CFR part 64, Sec. 64.4(b)(5) and (c), 
appendices A through D, as the basis for evaluating the equivalency of 
proposed changes to the monitoring method in the permit. The EPA 
believes that the use of standardized criteria should provide 
nationwide consistency with respect to decisions regarding the adequacy 
of monitoring changes, thereby lessening the need for close EPA 
oversight of certain changes. Moreover, the use of such criteria would 
distinguish between changes that do, and do not, affect measurement of 
emissions and facilitate equivalency determinations for new or 
alternative methods.
    The EPA solicits comment on whether the review of all changes to 
monitoring and recordkeeping provisions should be based on standardized 
criteria, namely part 64 appendices A, B, C, and D. Furthermore, 
comment is solicited on whether the use of such criteria would enable 
re-delegation of authority in the NSPS and NESHAP programs such that 
review and approval of these alternatives could be handled solely 
through an operating permit revision, even for those monitoring 
provisions which are required by the underlying regulation (i.e., are 
not also part of an enhanced monitoring or periodic monitoring 
requirement).
    b. Background--Distinction Between Testing, Monitoring, and 
Recordkeeping. To frame the following discussion, EPA would first like 
to clarify the distinction between testing, monitoring, and 
recordkeeping methods. The terms testing, monitoring, and recordkeeping 
are widely used, and have a variety of meanings. A common understanding 
of how EPA proposes to use these terms is essential to understanding 
the appropriate review process discussed in this option for changes in 
monitoring and recordkeeping.
    (i) Compliance Test Methods. Development of a test method is a 
controlled experiment whereby all interferents are evaluated or 
controlled in order to obtain a ``true'' measurement of the pollutant 
of interest, on a consistent and reliable basis. The Agency has 
established a review process for changes to the compliance test method. 
Specifically, for the NSPS, NESHAP, and SIP programs, EPA has 
considered test method changes as either minor or major changes. The 
distinction between minor and major changes is based on whether the 
change affects the measured emission results relative to the compliance 
limit and the uniqueness of the application. Major changes require 
extensive technical review to assess the effects on the emission 
measurement or compliance determination. An example of a major change 
in method would be a change from wet chemistry titration to an ultra-
violet instrument for the measurement of SO2.
    The promulgation of method 301, 40 CFR part 63, appendix A, 
provides the basic criteria to evaluate a major change in test method. 
A proposed alternative test method which meets the criteria in method 
301 is considered substantially equivalent to the existing method, and 
is an acceptable change.
    (ii) Compliance Monitoring Methods. Compliance monitoring has 
traditionally been used in the air program as a supplement to the test 
method, to provide a basis for identifying proper operation and 
maintenance of control devices, and as an indication of compliance 
status and in some cases as a compliance determination method. In the 
past, however, EPA policy and regulations resulted in primary EPA 
reliance on the test method to provide the initial evidence of a 
violation.
    To ensure compliance with permit terms and conditions, and to 
provide for the annual compliance certifications required by title V, 
proof of compliance is necessary on a more frequent basis than upon 
source start-up, as traditionally required. Frequent use of the test 
method may be a costly means of obtaining such compliance information. 
Therefore, sources, EPA, and the permitting authority may be using 
monitoring data for directly determining compliance with emission 
standards.
    The acceptability of a monitoring method as direct proof of 
compliance with an emission standard is determined, in part, by 
correlating measurements from the proposed monitoring method to the 
emission standard as measured by the test method. Through the operating 
permit, a monitoring method may be proposed, demonstrated, evaluated, 
and accepted, as the means of determining compliance with the emission 
standard for an individual source. Where the permit relies on 
monitoring for compliance certifications, the monitoring method remains 
as the applicable compliance-determining method for that source, until 
such time as the permit revises or rescinds that method.
    The EPA believes that not all changes in monitoring methods need to 
be considered as significant changes. The monitoring provisions of part 
70, part 64, and part 60 do not establish the standard but instead 
provide and require a method to measure the standard that has already 
been established through the test method. Therefore, changes to the 
monitoring method do not change the standard or its stringency. 
Monitoring changes only affect the ability of the monitoring method to 
read the standard. It is essential, however, to evaluate the ability of 
the requested monitoring method to monitor compliance.
    Consequently, the performance specifications of 40 CFR part 60 and 
proposed part 64 identify criteria for the evaluation and acceptance of 
direct emission monitoring methods, predictive parameter monitoring 
methods, and parameter methods whether they are continuous or periodic. 
Quality assurance procedures are required to assure that the monitoring 
methods maintain the original qualifications of performance. The 
ability of the method to determine whether deviations are occurring 
must be established. While changes may affect the method's ability to 
read whether a deviation has occurred, the redemonstration under part 
60 and part 64, in addition to quality assurance procedures, continues 
to define and assess the method's ability to monitor the appropriate 
standard.
    (iii) Recordkeeping. Recordkeeping is traditionally viewed as the 
manual or automated permanent documentation on paper or computer file 
of operating parameters or emissions, as related to the emission 
standard. Where work practices are employed, recordkeeping serves as 
the principal means of documenting compliance with the standards. Where 
monitoring hardware is used to monitor compliance, recording data from 
such monitors is an essential and integral part of the monitoring 
system. Where compliance is determined through a series of calculations 
alone, such as where complying coatings are used to meet a VOC 
standard, recordkeeping may be used as the test method. Recordkeeping 
may therefore be the sole means of monitoring compliance, may be a 
necessary supplement to compliance monitoring, or may be used directly 
to determine compliance. Thus, recordkeeping can serve the function of 
compliance testing data or compliance monitoring data. For purposes of 
the following discussion recordkeeping is assumed to be included in the 
term monitoring, even though recordkeeping may not be specifically 
mentioned.
    c. Proposed Alternative Option for Treatment of Changes in 
Monitoring. The acceptability of changes in monitoring depends upon the 
demonstrated ability of the requested monitoring method to represent 
compliance accurately and identify deviations from permit terms and 
conditions. To the extent such demonstrations prove to be 
straightforward and uncomplicated, EPA believes that limited Agency 
review and oversight of monitoring changes may be needed. The EPA 
believes that changes to existing monitoring can be grouped into four 
levels that necessitate differing degrees of review and oversight. The 
Agency solicits comment on whether these four levels of monitoring 
changes are appropriate distinctions under the proposed permit revision 
tracks, balancing the need to provide oversight of compliance methods 
and the need to provide relief from the existing part 70 requirement 
that many changes in monitoring be processed under the current 
significant permit modification track. The EPA is generally taking 
comment on the need to increase or decrease the flexibility for 
monitoring or recordkeeping changes as proposed today in the four 
permit revision tracks.
    Under the option discussed below, EPA is proposing the use of 
standardized criteria set forth in the proposed part 64 (58 FR 54648 
(October 22, 1993)) for the evaluation of these monitoring changes. The 
proposed procedures in part 64 would provide quantification of the 
effects of changes to the monitoring method. The procedures and 
directions of proposed part 64 would be an extension of the Performance 
Specifications of part 60, appendix B, which require monitoring methods 
to meet certain accuracy and precision requirements (e.g., 20 percent 
relative accuracy). Proposed part 64 would provide broader application 
to all monitoring methods to ensure a level of correlation to the 
standard that is acceptable in assessing compliance. As a result, 
proposed part 64 would allow for the use of simple parameters, such as 
temperature, as a means of assuring compliance with the standard.
    Under proposed Sec. 64.7(b)(2), a source would be required to 
identify whether the physical or operational characteristics of the 
emission unit affect the performance of the monitoring protocol. The 
proposed rules also rely on the source to answer and demonstrate 
whether the monitoring change or alternative requested affects and 
satisfies the performance requirements of appendices A and B of part 
64, and whether the change or alternative provides the same degree of 
confidence and reliability as demonstrated by the existing monitoring 
method, as set forth in appendices A through D. These investigations as 
conducted by the source and assessed by the permitting authority would 
provide the basis on which the acceptability of the requested method or 
change could be evaluated.
    The following discussion provides explanations and examples of the 
types of changes in monitoring which may be appropriate for each of the 
four proposed permit revision tracks. Note that EPA believes that the 
use of the permit revision tracks is appropriate whether the change in 
a compliance monitoring method is driven by a need to implement a 
physical or operational change at the source, or solely by a desire to 
implement a different monitoring method. Some changes to monitoring 
will have little or no effect on the measured emission results, and 
will simply enhance the ability of the method to measure emissions 
accurately. For these changes, EPA believes a lesser level of review is 
appropriate. For other changes, the source may have already established 
that the operating parameter being monitored (e.g., temperature) is 
representative of emissions, and the only monitoring change necessary 
is to set a new operating level reflective of compliance with a new 
emission limit, or one that is more reflective of compliance in 
general. This situation may warrant more review than the former 
example; however, EPA believes some streamlining of the review process 
is appropriate, given the correlation that has already been established 
between the monitored parameter and emissions. In other cases, the 
correlation between emissions and the proposed monitoring method may be 
unclear, unknown, or poorly established for that source's unique 
operating conditions. In these cases, or where the source proposes to 
apply an entirely different monitoring method, EPA believes the change 
must be reviewed as a significant permit revision.
    (i) Administrative Amendments. Like the proposed four track-system 
discussed earlier, this option would continue to allow the 
administrative permit amendment process for increases in the frequency 
of monitoring or reporting. Additionally, this option proposes to allow 
increases in the frequency in testing and recordkeeping to undergo 
review through the administrative permit amendment process, since EPA 
believes that these increased frequencies have no potential to reduce 
the ability to monitor compliance. Also, where the monitoring change 
was reviewed as part of a merged NSR/part 70 procedure, the resultant 
part 70 permit review could be processed as an administrative permit 
amendment. However, EPA believes that the administrative amendment 
permit revision track provides such limited oversight, review, and 
feedback that it is not sufficient for the majority of monitoring 
changes that could reduce the ability to monitor compliance. The EPA 
solicits comment on other changes to monitoring that are easily 
recognized and have no potential to reduce a source's ability to 
monitor compliance, and on whether such changes might be appropriately 
incorporated through the administrative permit amendment track.
    (ii) De Minimis Permit Revisions. The EPA believes that certain 
changes to monitoring are such that they do not affect, or only 
enhance, the ability of the monitoring method to measure emission 
results. Monitoring changes that do not affect the ability to measure 
emission results are those changes that do not have an adverse effect 
on measurement sensitivity and representativeness such that precision 
and accuracy are unaffected. Minor changes may include, for example, a 
change from a stainless steel sampling probe to a teflon-lined probe to 
address a corrosion problem for a CEMS which measures acid gases (e.g., 
SO2). This change is site-specific, does not affect the measured 
value, does not have particular national significance, and will improve 
the operation and availability of the CEMS. Another example would be 
where a temperature monitor on an incinerator is changed from an analog 
readout with manual data recording to an automatic electronic data 
management system. These types of changes have traditionally been 
labeled ``minor'' changes in the monitoring method under the NSPS and 
NESHAP programs.
    States are currently delegated the authority to review and approve 
minor changes without prior EPA concurrence or consultation under the 
7-14 Delegations Manual (a copy of which can be obtained from docket A-
93-50). To maintain consistency with these delegations, and to expand 
the ability to expedite such monitoring changes to other regulatory 
programs, this option proposes that ``minor'' monitoring or 
recordkeeping changes be eligible for processing as de minimis permit 
revisions. The EPA expects that the majority of changes requested will 
be within this category of monitoring or recordkeeping changes. Since 
such changes do not affect the ability to measure emission results and 
are anticipated to be numerous, direct EPA oversight and review would 
not be necessary, practical, or efficient.
    Under the option proposed, to ensure sufficient review of the 
requested monitoring change by the permitting authority, the source 
would have to conduct a demonstration and obtain affirmative approval 
of the demonstration's adequacy from the permitting authority prior to 
submitting its application for the de minimis permit revision. The 
permitting authority's determination of adequacy would be based on an 
evaluation of the demonstration using the criteria provided in part 64. 
In the application requesting the de minimis permit revision the source 
would have to provide a summary of the demonstration and verification 
of the permitting authority's affirmative approval. The permitting 
authority would then be required to place a summary of the 
demonstration, a copy of the complete demonstration, and an affirmative 
statement by the permitting authority of the demonstration's adequacy 
in the public docket for the de minimis permit revision. Upon the 
monthly, batch public notice of the de minimis permit revision, the 
public would have access and an opportunity to review this information, 
along with the rest of the de minimis permit revision application, and 
could supply written comments on the change. The EPA would also have 
access to this information, and under this option could, upon citizen 
petition, review and object to any demonstration and de minimis permit 
revision that fails to assure compliance with applicable requirements.
    The EPA believes that the proposed de minimis permit revision track 
would provide sufficient opportunity for oversight of such minor 
changes to monitoring methods, since States have already developed 
expertise in determining whether changes are minor or major and in 
approving minor changes under the delegations policy discussed above. 
This practice currently occurs with only minimal EPA oversight. 
Processing such changes through the de minimis track would ensure 
national and programmatic consistency in the treatment of such changes, 
and provide the public with an opportunity to review and comment on 
these changes as they occur. It would also ensure that permitting 
authorities evaluate and make affirmative determinations on each 
change, which would become part of the permitting record for public, 
affected State, EPA, and ultimately administrative and judicial review. 
For example, where a citizen in the public comment process failed to 
elicit a response from the permitting authority on the change, the 
citizen could petition EPA to object. The EPA would then review the de 
minimis permit application and the demonstration, and if the Agency 
found the demonstration was inadequate, it would veto the de minimis 
permit revision, and thus render the source liable for the 
inappropriate change. The EPA believes this possibility would serve as 
a meaningful deterrent and ensure that minor changes to monitoring are 
proposed, approved, and implemented with integrity.
    The EPA also notes that in order for this option to provide for the 
de minimis permit revision track to process certain minor changes to 
monitoring methods, SIP revisions would be required to create a 
provision in the SIP to allow sources and permitting authorities to 
develop changes to SIP-required monitoring methods through the part 70 
permitting process without also having to undertake source-specific SIP 
revisions. As States develop these ``SIP flexibility'' provisions, the 
public would have an opportunity to review and comment upon them, and 
EPA approval of the SIP provisions would be required. Moreover, as 
would always be required in the de minimis track, the source's permit 
would have to contain an express term or condition allowing the source 
to make these types of minor changes at the relevant unit through the 
de minimis track. Such a term or condition could only be established 
through full permitting process, and the public and EPA would have a 
full opportunity to review the creation of this ``pre-authorizing'' 
term. Moreover, all pre-authorizations would have to be renewed every 
permit term, which is in itself a deterrent to potential abuse. Given 
all of these safeguards, EPA believes minor changes to monitoring may 
appropriately be processed through the de minimis permit revision 
track.
    Note also that integrating this option into the proposed four-track 
system would require some amendment to the system. First, under the 
unit-based track, any change that otherwise qualified as unit-based de 
minimis would be eligible for de minimis procedures, whether or not any 
associated changes in monitoring were minor, major, or even entirely 
new or alternative. This option would screen out the more significant 
monitoring changes, such that changes that would qualify as unit based 
de minimis at small units could be processed as de minimis permit 
revisions only if any associated monitoring changes were previously 
demonstrated to the permitting authority to be minor.
    Second, the scope of eligible changes under the increment-based de 
minimis track would be expanded. As proposed, the increment-based 
criteria exclude from the de minimis permit revisions associated re-
calibration of CEMS or operational parameters unless such changes have 
first been established in the permit program, the permit, or through 
procedures at least as stringent as minor permit revision procedures. 
However, EPA is concerned that permitting authorities would find it 
difficult to apply the proposed criteria or to exercise the foresight 
to establish how such changes would be governed and incorporated on a 
case-by-case basis. The alternative option would replace the proposed 
criteria with provisions allowing minor monitoring changes to be 
eligible for the de minimis permit revision track.
    Third, while this option would retain the provisions that would 
require a source to be in compliance with the terms it seeks to revise 
through the de minimis track and that would prohibit de minimis 
thresholds from being established through netting, for minor changes 
solely to monitoring it would create exceptions to the provisions that 
would require the need for a permit revision to result from a physical 
or operational change and that would exclude from eligibility changes 
involving a limit established solely pursuant to part 70 provisions. 
The EPA believes these exceptions would be necessary in order to allow 
sources and permitting authorities to make minor changes to monitoring 
methods where no other change is involved. These minor monitoring 
changes might not trigger other preconstruction review, and if there 
were no exception to the physical or operational change requirement, 
these minor improvements to monitoring would be forced to go through 
less streamlined procedures. Moreover, to the extent a source's 
monitoring methods were established solely through part 70 procedures, 
as may occur for enhanced monitoring protocols, EPA believes it should 
not be necessary to require minor improvements to such methods to be 
processed through more burdensome significant permit revision 
procedures in light of the stringent qualification criteria for minor 
changes and the safeguards discussed above. As would be otherwise 
provided under the de minimis permit revision track, minor monitoring 
changes processed under this option would not receive a permit shield.
    The EPA is taking comment on other monitoring changes that may be 
appropriate for review under the de minimis permit revision procedures. 
One category of such changes might be those associated with unit-based 
de minimis changes, notwithstanding whether associated changes to 
monitoring qualify as ``minor.'' On one hand, the emission increases 
from such changes could be so small that it is unlikely that changes in 
the correlation between emissions and the operating parameters being 
monitored could be environmentally significant. Further, EPA believes 
that any necessary change in the enforceable operating level could be 
so small that an expedited review of such changes is appropriate. 
However, if the application for the de minimis permit revision did not 
demonstrate how the new operating level is correlated to emissions, the 
change could not be reviewed through the de minimis track.
    The EPA recognizes the challenge in defining the distinction 
between changes traditionally considered ``minor'' and ``major.'' If 
the definitions are unclear, the result will be inconsistent judgements 
as to the appropriate track for reviewing and processing the changes. 
As a result of this potential difficulty, the Administrator is taking 
comment on the adequacy of the definitions provided, as well as any 
means for clarifying the distinction. The EPA is also soliciting 
comment on eliminating the distinction and reviewing minor and major 
changes under a single track, either the de minimis permit revision 
track or minor permit revision track.
    (iii) Minor Permit Revisions. The EPA is proposing, in this option, 
three categories of monitoring changes as appropriate for review 
through the proposed new minor permit revision process. The first 
category of monitoring changes are changes in the enforceable operating 
level that are correlated to the existing or proposed emission rate. 
The second category are monitoring or recordkeeping changes that have 
traditionally been considered ``major'' changes in the NSPS and NESHAP 
programs, excluding a switch to a new or alternative monitoring method. 
The third category are those monitoring changes which have been 
approved pursuant to minor or major NSR, including a switch to a new or 
alternative monitoring method.
    The first category of changes that EPA is proposing for review in 
the minor permit revision process are changes to the operating level, 
excluding a switch to a new or alternative operating parameter. Where a 
source's compliance is determined through the monitoring of operating 
parameters, such as temperature or pressure drop, a change in a 
source's emission limit will likely necessitate a change in the 
operating level which is demonstrative of compliance with the emission 
standard. The EPA believes such a change would be appropriate for 
review in the minor permit revision process. An example of such a 
change would be if compliance with an emission standard has been 
correlated to an incinerator temperature of 1800 degrees Fahrenheit and 
an increase in the source's emission limit might result in compliance 
being achieved at 1600 degrees. Alternatively, a source may wish to 
change the enforceable level of the operating parameter, absent a 
change in the emission limit, simply based on a demonstration that the 
new proposed operating level is also demonstrative of compliance with 
the existing emission limit.
    In both of these cases, the change in the enforceable operating 
level (i.e., the temperature limit) necessitates review sufficient to 
ensure that the new operating level is indeed representative of 
compliance with the applicable emissions limit. Since in these examples 
the temperature limit serves as the direct demonstrator of compliance, 
changes in the temperature limit will have a similar impact as a change 
in the emission limit and should therefore undergo review by EPA. Under 
the option proposed here, where the operating parameter is still 
correlated to emissions (i.e., temperature can still be representative 
of compliance) such a change could be reviewed through the proposed 
minor permit revision process. That is, monitoring changes that involve 
solely an adjustment to the level of the parameter being monitored, but 
do not necessitate a change in the type of parameter being monitored, 
may not need to undergo the longer review periods available through the 
significant permit revision process. Using the previous example, where 
only the temperature limit or level needs adjustment, but temperature 
as an operating parameter is still demonstrative of compliance, the 
change in temperature level could be reviewed as a minor permit 
revision. Since the original demonstration which showed a correlation 
between the operating parameter and emissions is still valid, this 
lessens the time and level of review needed by the permitting 
authority. However, the permit application would have to justify why 
the existing operating parameters are still demonstrative of 
compliance, as well as justify the new proposed compliance levels.
    Alternatively, where a change at the source is such that the 
existing operating parameters are no longer demonstrative of 
compliance, EPA believes that the monitoring change must be reviewed 
through the significant permit revision process. For example, where a 
new raw material is introduced, its properties may be so different from 
the previous raw material that different operating parameters need to 
be monitored, whereby temperature alone may no longer be representative 
of compliance.
    The second category of changes that EPA is proposing under this 
option are monitoring changes that have traditionally been considered 
``major,'' excluding new or alternative monitoring methods. Such 
changes include changes to the existing monitoring method that affect 
measurement sensitivity and representativeness, thus potentially 
affecting the ability to measure emission results; changes that affect 
the scope and intent of the existing monitoring method; and changes 
that may be applicable to similar monitoring methods in the same or 
other source categories.
    An example of a ``major'' change qualifying for review under the 
minor permit revision process would be a change to a continuous 
emission monitoring system (CEMS) to modify the sample conditioning 
system with the addition of a moisture condenser to improve the 
operating reliability of the analyzer. Such a change would require a 
demonstration that the CEMS data are valid for determining compliance 
with the applicable emission limit. The sample conditioning system 
change could alter the sample by removing not only moisture (change 
from wet to dry concentration requiring a moisture measurement and 
correction), but also by potentially removing some condensable 
compounds before analysis. However, a complete change from a gaseous 
CEMS to a parameter or predictive emission monitoring system would 
constitute a new or alternative monitoring method, therefore, requiring 
review through the significant permit revision process.
    Notwithstanding the above exclusion of new or alternative 
monitoring changes from the minor permit revision track, EPA is 
soliciting comment on the appropriateness of allowing selected new or 
alternative monitoring methods to be approved through the minor permit 
revision process where the change has received prior EPA approval. The 
Agency believes that prior EPA approval would require that EPA has 
previously officially recognized the new or alternative method for a 
particular source type and emissions matrix (e.g., under previous EPA 
delegation authority or Emission Measurement Technical Guidance 
documents). In particular, EPA is requesting comment on whether prior 
EPA approval of a new or alternative method provides an adequate bright 
line test for use by the permitting authority in determining whether a 
given new or alternative change may undergo review through the minor 
permit revision track. The EPA believes that the minor permit revision 
track contains sufficient safeguards to allow the permitting authority 
to determine that the new or alternative method has not received 
official EPA approval and to require that the method must undergo 
review in the significant permit revision track.
    The third category of changes that EPA is proposing under this 
option as eligible for the minor permit revision process are monitoring 
changes that in conjunction with a physical or operational change have 
been approved pursuant to minor or major NSR, provided that the 
preconstruction review has sufficiently focused on the adequacy of the 
proposed monitoring change. This category of monitoring changes may 
include ``major'' changes as discussed above, as well as changes to new 
or alternative monitoring methods. Changes to new or alternative 
monitoring methods are those that result in a fundamental change in the 
monitoring protocol used to determine compliance with the permit 
conditions. Such changes include, but are not limited to, measurement 
of a different pollutant, surrogate constituent, or operating parameter 
than measured by the existing monitoring method; use of an alternate 
analytical principle for measuring the pollutant, surrogate constituent 
or operating parameter; or use of a different monitoring frequency or 
data averaging time.
    The EPA believes that these types of changes will receive 
sufficient review in the NSR process to allow incorporation through the 
minor permit revision process. This eligibility, as in the case of 
merged NSR, would also be available on a permit by permit basis. Under 
this option, the permitting authority would be required to 
affirmatively approve the source's monitoring demonstration in the NSR 
action, and the demonstration along with verification of affirmative 
approval would be included in the source's part 70 minor permit 
revision application. Where the level of review and oversight provided 
in the NSR process is not sufficient to ensure the adequacy of the 
requested monitoring method, the requested change would be required to 
be reviewed through the significant permit revision process. Moreover, 
initial review of new or alternative change would be processed as a 
significant permit revision.
    The procedure under this option would require that prior to 
applying for a minor permit revision to an existing monitoring method, 
the source would have to provide a demonstration under part 64 and 
obtain affirmative approval of the demonstration's adequacy from the 
permitting authority. The permitting authority's determination of 
adequacy would be based on an analysis of the demonstration using the 
criteria provided in part 64. In order to provide meaningful public, 
affected State, and EPA review, the source would be required to provide 
a summary of the demonstration and verification of its approval by the 
permitting authority in its application for a minor permit revision. 
For monitoring changes approved pursuant to minor or major NSR, the 
source would be required to provide supporting documentation from the 
minor or major NSR permit approval which evidences the demonstration 
and its approval by the permitting authority in the application for the 
revision. As would generally be required under the proposed minor 
permit revision track, the source would be required to forward the 
application to EPA for its 45-day review and to any affected States 
immediately upon submitting its application to the permitting 
authority.
    The permitting authority would then be required to place a summary 
of the demonstration, a copy of the complete demonstration, and an 
affirmative statement by the permitting authority of the 
demonstration's adequacy in the public docket for the minor permit 
revision. The public would have access and an opportunity to review 
this information, along with the rest of the minor permit revision 
application, and could supply written comments on the requested change. 
As otherwise provided under the proposed minor permit revision track, 
if no comments were submitted during the 21-day public comment period 
and if neither the permitting authority or EPA objected to the change, 
the source would be able to implement the change on the 22nd day after 
submitting its minor permit revision application. If comments were 
received, however, the permitting authority would be required to 
determine whether those comments were germane and non-frivolous within 
28 days after the source submitted its application. Where the 
permitting authority failed to make such a determination or found that 
the comments were either frivolous or not germane, the source would be 
able to implement the change on the 29th day after it submitted its 
application, again provided that neither the permitting authority nor 
EPA had objected to the change. If the permitting authority failed to 
timely respond to submitted comments, the commenter would be able to 
sue to compel the permitting authority to respond and would be able to 
seek an injunction against the source implementing the requested 
change.
    The EPA would also be able to review the summary and gain access to 
the complete demonstration to determine whether the change assures 
compliance with applicable requirements, since the source would have 
provided EPA with a copy of the minor permit revision application. 
Also, as would be otherwise provided by the proposed minor permit 
revision track, where EPA did not object to a given change during its 
45-day review period, citizens would be able to petition EPA to object, 
and seek judicial review in Federal court if EPA did not object to the 
change in response to the petition.
    The EPA recognizes that even after permitting authority approval of 
initial part 64 demonstrations, subsequent verification testing might 
be required in order to ensure that the approved monitoring change was 
appropriate, and that such verification testing might not be able to be 
completed before the deadline for final permitting authority action on 
minor permit revision applications. The verification testing would have 
to be conducted according to a fixed compliance schedule with 
enforceable milestones established by the permitting authority. After 
the permitting authority approved the initial demonstration and 
established a compliance schedule for the verification testing, the 
source would then submit its minor permit revision application. Upon 
expiration of the public comment period, as otherwise provided in the 
proposed minor permit revision track, the source could implement the 
change and begin the verification testing in accordance with the 
established compliance schedule. The permitting authority would then 
take appropriate final action on the minor permit revision application 
as required, even if verification testing were ongoing. The source 
would have up to 90 days to complete any verification testing and to 
submit a demonstration of its adequacy to the permitting authority. 
Upon receipt of the source's verification test results, the permitting 
authority would have to promptly notify the source in writing of its 
acceptance or rejection of the test results, and place a copy of its 
determination in the public docket. The EPA is soliciting comment on 
the definition of ``promptly'' and believes that 30 to 90 days would be 
an appropriate definition. If, after the permitting authority's final 
action revising the permit, the verification testing showed that the 
monitoring change ultimately failed to demonstrate compliance as set 
forth in the demonstration, upon receipt of written notice from the 
permitting authority the minor permit revision would become null and 
void, the source would be required to comply with the monitoring terms 
and conditions that applied to the source before the minor permit 
revision, and the source would be liable for having operated in 
violation of its permit from the time the change was implemented until 
the permitting authority took final action to revise the permit. 
Moreover, if the source continued to operate the change after the 
permit revision had become null and void, it would be liable. However, 
if the verification testing confirmed that the monitoring change 
demonstrated compliance, the permitting authority would then place a 
copy of the final verification test in the public docket for the minor 
permit revision.
    The EPA believes that the proposed minor permit revision track 
would provide sufficient opportunity for oversight of these types of 
monitoring changes. The requirement that the permitting authority 
affirmatively approve the major monitoring changes and changes in 
enforceable operating levels prior to the source's submission of the 
minor permit revision application would ensure that the public, 
affected States, and EPA have the ability to review and comment upon 
not only the source's proposed change, but also on the permitting 
authority's assessment of the change. Such permitting authority 
assessments would become part of the permitting record for the change, 
and would be subject to administrative and judicial review. The public 
would be afforded an opportunity to comment upon each change prior to 
its implementation, and EPA would retain the ability to disapprove any 
change it found objectionable. Such disapproval could occur even after 
the source implemented the change, rendering the source liable for 
operating in violation of its permit. The EPA believes this possibility 
serves as a considerable deterrent against sources proposing and 
operating inappropriate major monitoring changes.
    Again, EPA notes that in order for States to use the minor permit 
revision process for major monitoring changes under this option, SIP 
revisions would be required to create a provision in the SIP allowing 
sources and permitting authorities to develop changes to SIP-required 
monitoring methods through the part 70 permitting process without 
having to undergo source-specific SIP revisions. The SIP revisions 
creating this ``SIP Flexibility'' would provide the public an 
opportunity to comment on the provision both at the State and Federal 
level, and would require EPA approval into the SIP.
    For major monitoring changes and new or alternative methods 
approved pursuant to minor or major NSR, EPA believes that such 
preconstruction actions provide an adequate forum for initial 
permitting authority approval of these changes prior to the minor 
permit revision process. Such a forum is especially important for 
changes representing new or alternative monitoring methods. Both minor 
and major NSR actions are required by EPA regulations to provide public 
process for preconstruction changes, and permitting authorities have 
developed a long-standing practice in NSR programs. The NSR actions 
that would allow major changes or establish new or alternative methods 
would be required to explicitly focus upon and approve the monitoring 
change to be eligible for subsequent minor permit revision processing 
under this option, and would be required to provide the forum for the 
demonstration of the adequacy of the monitoring change under part 64. 
Given the safeguards discussed above, EPA believes major monitoring 
changes and changes representing new or alternative methods could 
appropriately be processed as minor permit revisions.
    Integrating the proposed option into the four-track system would 
require some amendment to the proposed minor permit revision criteria. 
First, this option would delete the proposed provision that changes to 
monitoring requirements could be processed as minor permit revisions 
only if they are necessary to implement changes that otherwise qualify 
for this track. This option would replace that provision with 
principles establishing the scope of eligible monitoring changes as 
discussed above.
    Second, this option would expand the scope of eligible changes in 
that it would create an exception to the proposed provision that would 
exclude changes involving a limit previously established as federally 
enforceable solely pursuant to part 70 procedures. As is the case for 
de minimis permit revision procedures, EPA believes this exception 
would be necessary in order to allow sources and permitting authorities 
to make changes to monitoring where no other changes trigger 
preconstruction review. Furthermore, to the extent a source's 
monitoring method is established solely through part 70 procedures, as 
may occur for enhanced monitoring protocols, EPA believes it would not 
be necessary, once those protocols have been established pursuant to 
significant permit revision procedures, to require that all changes be 
processed through procedures beyond those provided by the minor permit 
revision track, given the procedural safeguards that would be required 
under this option.
    Third, this option would add to the application and public 
docketing requirements of the minor permit revision track for eligible 
monitoring changes, add the requirement of the demonstration under part 
64 prior to submission of a minor permit revision application, 
establish the ability to conduct verification testing even where 
existing permit terms conflicted with such testing, and establish a 
separate liability test where verification testing demonstrates post-
permit revision that a monitoring change was not adequate. While these 
amendments to the proposed minor permit revision track would be 
substantial, EPA believes the result is a more coherent, flexible, and 
appropriate approach for expeditiously processing monitoring changes.
    (iv) Significant Permit Revisions. Under this option, monitoring 
changes that did not qualify for the administrative, de minimis, or 
minor permit revision tracks would have to be processed as significant 
permit revisions. For example, a switch to a new monitoring method that 
had not been affirmatively reviewed pursuant to NSR, including a new 
parameter to be monitored, would be required to be processed as a 
significant permit revision. The significant permit revision process 
would also be required for the initial implementation of an enhanced 
monitoring protocol in order to ensure that EPA has sufficient review 
of the new method. Part 64 will provide further discussion of the 
implementation of an enhanced monitoring protocol. The EPA solicits 
comment on whether there are any other broad types of changes in 
monitoring that should be specifically identified as requiring 
significant permit revision.
    d. Liability Under the Alternative Option. As discussed above (see 
``Liability for Making Changes Before Permit is Revised''), industry 
expressed concern in settlement discussions that since certain 
monitoring, recordkeeping and reporting requirements may be determined 
on a case-by-case basis in the permitting process, the utility of the 
proposed streamlined revision tracks would be undermined by the 
inability of the source to propose with certainty the appropriate 
compliance terms in its permit revision application. In particular, 
industry suggested a source might expose itself to liability if it 
operated a change prior to final approval of the change by the 
permitting authority. Were the permitting authority to subsequently 
disapprove a change that the source had already begun to operate, the 
source would be subject to liability for operating in violation of the 
applicable permit terms. As discussed earlier in this notice, the 
Agency has proposed to address this concern by allowing the permitting 
authority to approve proposed permit revisions (including certain 
changes to relevant compliance terms) and to allow the permitting 
authority not to hold the source liable for having operated in 
violation of the original proposed permit terms.
    However, the Agency believes the alternative option concerning use 
of the proposed revision tracks for changes to source compliance 
monitoring existing in a permit may eliminate most, if not all, of the 
short term uncertainty regarding the adequacy of compliance terms in a 
proposed permit revision. Under the alternative option, since all 
changes to monitoring requirements in an existing permit that are 
eligible for de minimis or minor permit revision tracks must have been 
approved by the permitting authority prior to the submission of the 
proposed operating permit revision, uncertainty as to the permitting 
authority's positions will be eliminated. In addition, the existence of 
prior permitting analysis and approval of the proposed change should 
make it less likely that adjustments to the compliance monitoring 
requirements will be necessary in the permitting authorities final 
approval of the permit revision.
    In light of these considerations, the Agency requests comment on 
the need for appropriateness of provisions in the revision procedures 
discussed earlier in this notice that allow the permitting authority to 
correct minor changes in compliance monitoring requirements in the 
final permit revision, and on whether the permitting authority should 
be authorized to excuse source liability for operating changes that are 
subsequently disapproved. The Agency also solicits comment on whether 
under the alternative option any risk of potential source liability for 
operating a change prior to final permitting authority approval would 
unreasonably limit the use of the streamlined revision process and 
whether the integrity of the revision process for compliance monitoring 
would be better assured by allowing sources to assume the full risk, 
especially given the greater breadth of compliance monitoring changes 
subject to streamlined revision procedures under the alternative option 
and the greater certainty afforded by requiring prior permitting 
authority approval of the proposed change.
    e. Solicitation of Input on Test Method Changes. The EPA is also 
soliciting comment on whether to allow certain test method changes to 
also be eligible for review under permit revision procedures more 
streamlined than the significant permit revision processes, similar to 
the way monitoring changes are addressed in the proposed option 
discussed above. While the potential need to revise a test method 
should generally be unrelated to the previously described flexibility 
needs of sources, EPA believes that certain types of changes to test 
methods may be appropriate for more expeditious review particularly 
given the proposed use of method 301 as set forth in 40 CFR part 63, 
appendix A, as the standardized criteria for evaluating changes to 
testing. As discussed with respect to monitoring changes, test method 
changes would be appropriate only as allowed by the underlying 
applicable requirements, including the SIP.
    The EPA is considering whether the use of method 301 establishes 
sufficient and adequate criteria to evaluate new alternative and major 
changes in test methods. A proposed alternative test method which meets 
the criteria in method 301 is considered substantially equivalent to 
the existing method, and is an acceptable change. If EPA were to allow 
test methods to be changed pursuant to the procedures described above, 
the review and acceptance of new test methods using the method 301 
criteria could be conducted by the permitting authority, and EPA 
Headquarters would be available for technical assistance and 
arbitration of approval or disapprovals of proposed methods.

F. General Permits

    The statute and the current rule authorize permitting authorities 
to issue general permits to sources that are similar enough that they 
are subject to the same set of applicable requirements, may be 
monitored in the same way, and thus may be covered by the same permit. 
General permits have the potential to greatly reduce the cost of 
permitting similar sources and are the likely approach to permitting 
numerous smaller sources. The Agency considers general permits an 
important element of a workable, cost-effective permit program.
    Under the current rule, general permits for specific source 
categories are to be developed using full permit issuance procedures. 
Following promulgation of the general permit, sources that believe they 
meet the criteria for coverage by the general permit may submit a 
request to the permitting authority to operate under it. The permitting 
authority may authorize sources to operate under the general permit 
without public participation, and such authorizations are not 
judicially reviewable. A source authorized to operate under a general 
permit, however, is subject to an enforcement action for operating 
without a part 70 permit, notwithstanding the permit shield provisions, 
if the source is later determined not to qualify for coverage under the 
general permit.
    In the preamble to the current rule, EPA explained that the primary 
purpose of general permits is to provide a less burdensome means of 
permitting numerous similar sources, and that public participation in 
and judicial review of the permitting authority's decision to authorize 
a source to operate under a general permit would undermine that 
purpose. The Agency sought to offset the lack of public or judicial 
review with the provision making sources liable for operating without 
any permit if they were later determined not to qualify for a general 
permit.
    State and environmental group petitioners challenged several 
aspects of the current rule's approach to general permits. Both groups 
of petitioners objected to the provision denying judicial review of a 
permitting authority's decision to authorize a source to operate under 
a general permit. Environmental group petitioners also objected to the 
lack of public participation in the decision to authorize operation 
under a general permit. The petitioners generally challenged EPA's 
authority to exempt decisions regarding a source's eligibility for a 
general permit from public review or final agency action from judicial 
review. They were also not convinced that subjecting a source to 
continued liability for operating without a part 70 permit was enough 
to offset the loss of public or judicial review. They noted that a 
primary purpose of title V was to remove from enforcement actions the 
issue of what requirements applied to a source and that EPA's approach 
to general permits ran counter to this purpose.
    The Agency has reexamined the general permits provisions of the 
current rule from a legal and policy standpoint, and has concluded that 
the current rule provides too little opportunity for public oversight 
of the general permits. As noted above, the current rule relies 
exclusively on the availability of an enforcement action against a 
source that received authorization to operate under a general permit 
but should not have, to ensure the integrity of the general permitting 
process. On reflection, EPA agrees with the petitioners that this 
liability provision does not appropriately or effectively compensate 
for the lack of public or judicial review of the authorization decision 
itself. First, the liability provision returns to the enforcement arena 
basic issues of applicability that the permit program was established 
to settle in the permitting process. It is also questionable how 
effective enforcement actions would be as a remedy to inappropriately 
granted authorizations. Without public notice of the authorization, 
citizens could not easily determine who had been granted authorization 
and on what basis. Citizens would therefore be poorly situated to bring 
enforcement actions on their own. It is also questionable whether all 
courts would be willing to impose the potentially extremely heavy 
penalties that could have accrued if a source were found ineligible for 
a general permit in an enforcement action. The source would likely 
argue, and a court may well agree, that it had received and reasonably 
relied upon an authorization to operate under a general permit.
    The Agency therefore proposes to delete that portion of the rule 
that provides that permitting authority decisions to authorize sources 
to operate under general permits are not judicially reviewable. The 
Agency also proposes to require that the permitting authority provide 
public notice of any authorization decisions it has made. Public notice 
could be provided on a monthly, batched basis, as EPA is also proposing 
for de minimis permit revisions.
    The Agency is also considering whether to revise the rule to 
require permitting authorities to provide an opportunity for public 
objection to authorization requests. If the public had some opportunity 
to participate in the permitting authority's decision-making process 
itself, fewer challenges to authorization requests would end up in 
court, and those that did would likely have the benefit of an 
underlying administrative record for the court to consider in making 
its decision. The Agency requests comment on the need for public 
comment on decisions by the permitting authority to authorize operation 
under a general permit.
    One manner of offering the public an opportunity to participate in 
authorization decisions is that proposed for de minimis change 
procedures. As described before, the proposed de minimis change 
procedures would require a monthly public listing of the de minimis 
changes for which the permitting authority had received applications 
the previous month. Upon posting of the monthly list, the public would 
have a specified period of time in which to petition the permitting 
authority to disapprove the change request. The permitting authority 
would then have a specified period of time in which to respond to any 
public objections, and if at the end of that period it had not denied 
the change request, the request would be deemed granted. A citizen 
unsuccessful in persuading the permitting authority to object to the 
change would be able to seek EPA or judicial review. No permit shield 
would be available for permit revisions processed using these 
procedures.
    Applied to the general permit context, the process would entail a 
monthly public listing of the sources that had requested authorization 
to operate under the general permit; a specified period of time for the 
public to object to any such requests; a specified period of time for 
the permitting authority to respond to any objections; default granting 
of authorization if the permitting authority failed to act by end of 
the period for its response; and recourse to EPA or the courts if a 
public objection had not been heeded.
    Unlike the de minimis revision procedures, however, EPA believes 
that authorizations granted (or deemed granted) in accordance with 
these public procedures could, at the permitting authority's 
discretion, provide a source receiving such an authorization with a 
shield against an enforcement action for operating without a permit. In 
other words, EPA would delete the current rule's provision that leaves 
a source that receives an authorization to operate under a general 
permit liable for operating without a permit if the source is found in 
an enforcement action to not qualify for the general permit under which 
it has been operating. The Agency requests comments on whether a shield 
against enforcement against operating without a permit should be 
available if the Agency were to require procedures like those described 
above. It notes that whether or not such a shield is made available, 
the permitting authority could provide for a shield when it first 
issues the general permit to the effect that a source which qualifies 
to use the general permit may rely on the terms of the permit to comply 
with the Act's requirements addressed in the general permit.
    The Agency believes that the process described above has the 
advantage of providing for public participation in decisions about the 
eligibility of particular sources for a general permit in a manner that 
would not place any undue burden on sources. A source interested in 
being covered by a general permit would only have to apply to the 
permitting authority, and would not have to further interact with the 
permitting authority unless its application was questioned or denied. 
Obviously, public involvement in review of a source's application may 
lead to more questions than would have otherwise occurred, but one of 
the benefits of public participation is the additional scrutiny it 
affords. The Agency recognizes, moreover, that the cost of providing an 
opportunity for public participation would be passed on to sources 
through permit program fees. These costs to the source, however, would 
be offset by the availability of the shield against enforcement for 
operation without a permit that the procedures would afford.
    The Agency is interested in receiving comment on the burden the 
process described above would place on permitting authorities. For de 
minimis changes, EPA is not proposing that public notice take any 
particular form, and it is not suggesting any particular form for 
general permits, either. Potentially, low cost means of publicly 
circulating the list of general permit applicants could be found. 
Permitting authorities would more likely incur any substantial added 
costs as a result of the need to respond to public comment. To the 
extent that the public raised significant concerns about the 
eligibility of a source for a general permit, though, these costs would 
be justified. To the extent the public comments were not significant or 
germane, the permitting authority would require less time to respond to 
them, if it had to respond at all.
    The Agency is also interested in receiving comment on an 
alternative approach to authorizing sources to operate under general 
permits. Under this approach, the permitting authority could authorize 
sources to operate under a general permit without public involvement, 
but would be required to provide after-the-fact notice to the public of 
the sources whose requests for a general permit were granted. The 
permitting authority would also be required to provide as part of its 
permit program an expedited means of revoking a permit (see discussion 
of permit revocation procedures elsewhere in this preamble). The public 
would have the opportunity to petition the permitting authority to use 
the expedited process to revoke the authorization a source had received 
from the permitting authority.
    The advantage of this approach would be that a source could obtain 
authorization without having to wait for the expiration of the periods 
for public objection and permitting authority response. From the 
public's standpoint, it would not require full permit issuance 
procedures (which the permitting authority has 18 months to complete) 
to revoke an improper authorization to operate under a general permit. 
This approach would be preferable, moreover, to that taken by the 
current rule, in that questions of eligibility would be settled in an 
administrative action prior to an enforcement action. The Agency 
requests comments on whether it would be appropriate to establish 
minimum criteria for expedited permit revocation procedures if it were 
to take this approach, and if so, what those criteria should be.
    A difference between the two approaches would be the availability 
of the permit shield. As explained above, EPA believes that general 
permits issued pursuant to procedures like those proposed for de 
minimis changes could provide a shield against enforcement for 
operating without a permit, even if the source is later determined to 
not qualify for the general permit. Under the second approach described 
above, the source would obtain its authorization without the benefit of 
any public involvement, and under such circumstances EPA believes it 
would be inappropriate to afford any permit shield. Commenters should 
taken into account the potential availability of a shield for the 
former approach in commenting on the relative merits of the two 
approaches.

IV. Other Changes and Clarifications

    The following section of today's notice addresses other issues 
raised in the permits case or during State/local agency and EPA 
implementation of the part 70 permits program. The issues are presented 
in the order of the sections in part 70 to which they relate. The EPA 
proposes to resolve some issues through rule revisions while for others 
the Agency offers clarifications or guidance.

A. Section 70.2--Definitions

1. Applicable Requirements
    a. Emissions or Offset Credits and Limits Taken to Avoid Applicable 
Requirements. The current definition of ``applicable requirements'' in 
part 70 does not include an explicit reference to requirements that 
create emissions or offset credits or that limit emissions for the 
purpose of avoiding applicable requirements. The proposed change would 
clarify that applicable requirements include any emissions-limiting 
requirement that is enforceable by EPA and by citizens under the Act 
and that is imposed on a source for purposes of creating an emissions 
or offset credit or avoiding the applicability of other applicable 
requirements. Several petitioners in the permits case are concerned 
that the rule may be read to not require the inclusion of such 
requirements in a part 70 permit. The Agency believes that virtually 
all such requirements fall within the scope of the listed components in 
the definition of applicable requirements. For instance, limits taken 
to avoid major NSR are generally established in minor NSR permits the 
terms of which are included as applicable requirements under paragraph 
(2) of the definition. Likewise, a source's ability to earn emissions 
or offset credits is generally grounded in regulations establishing an 
emission control program or standard (e.g., NSR or MACT) that are also 
listed as sources of applicable requirements in the current rule.
    The Agency nevertheless appreciates petitioners' concern that 
without an explicit reference in the applicable requirements 
definition, at least some limits taken for potential to emit or 
emissions credit purposes might be construed as not falling within the 
listed categories of applicable requirements. It is important to 
include these voluntarily undertaken limits in part 70 permits, as they 
require emissions reductions or controls that allow a source to avoid 
other, presumably more onerous, emissions reductions or controls. It is 
especially important if the limit creates a credit to be used to allow 
increased emissions at another source. The Agency is thus proposing to 
explicitly include these requirements in the list of applicable 
requirements. A new paragraph (2) is proposed to be added under the 
definition of applicable requirement to reflect these changes. The 
remaining paragraphs would be renumbered accordingly.
    b. Title VI Requirements.--Currently, Sec. 70.2 defines 
``applicable requirement'' to include ``[a]ny standard or other 
requirement of the regulations promulgated to protect stratospheric 
ozone under the title VI of the Act, unless the Administrator has 
determined that such requirements need not be contained in a part 70 
permit'' (emphasis added). In today's action, EPA proposes to determine 
that certain title VI requirements need not be included in part 70 
permits.
    The EPA believes that portions of the title VI program are 
fundamentally different from the other programs contained within the 
definition of ``applicable requirements'' in part 70. These other 
programs (e.g, NSR, PSD, NSPS, toxic air pollutants, acid rain, and 
solid waste combustion (section 129)) are based on control of emissions 
from stationary sources which produce pollutants as a result of their 
various processes. In contrast, the title VI program reduces ozone-
depleting substances (ODS) not so much by requiring controls on 
emissions but by requiring the phaseout of production of ODS, 
technician certification, bans on non-essential products, evaluation of 
alternatives for the most potent ODS, regulation of interstate commerce 
of ODS, and warning label requirements.
    In addition, to be most effective, many title VI activities require 
national consistency which could be compromised if implemented by State 
or local operating permit programs. Therefore, EPA proposes to delete 
as applicable requirements the requirements of sections 604-607 and 
610-612 of the Act. Today's proposal would retain, however, the title 
VI regulations under sections 608 and 609, which apply to ODS capture 
and recycling during service and disposal of refrigerator equipment and 
air conditioners (including motor vehicle air conditioners (MVAC)). 
These requirements are more similar to requirements issued under 
section 111 and 112.
    (1) Phase Out of Production and Consumption of ODS--Section 604, 
605, and 606. Sections 604, 605, and 606 of the Act require EPA to 
promulgate a schedule to phase out the production and use of ozone-
depleting chemicals, and to accelerate the phaseout if certain actions 
occur. On December 10, 1993, EPA promulgated regulations which 
accelerated the originally promulgated schedule for the phaseout (40 
CFR 82, Subpart A, 58 FR 65018). Under the accelerated phaseout, 
production of Class I substances will be phased out by 1996. Class I 
substances are CFC's, halons, carbon tetrachloride, methyl chloroform, 
and methyl bromide. The phaseout is accomplished by issuing decreasing 
numbers of production and consumption allowances to ODS producers and 
importers which are few in number and scattered across the country. 
Allowances are issued not to individual facilities but to corporations, 
many of which have facilities in more than one State. Beyond that, the 
program involves a national allowance trading system. Thus, 
determination of compliance with the program must occur using a 
coordinated national program. For these reasons, EPA believes that 
implementation of this program through part 70 permits would be 
inappropriate and that these applicable requirements need not be 
contained in operating permits. Focusing implementation of this 
regulation through EPA conserves resources, promotes efficiency and 
avoids possible misunderstandings.
    (2) National Recycling and Emission Reduction Program--Section 608. 
The EPA believes that the regulations promulgated pursuant to section 
608 of title VI are applicable requirements that should be included in 
operating permits (40 CFR 82, Subpart F, 58 FR 28660), because 
inclusion of those requirements in part 70 permits will facilitate 
their implementation and enforcement. Inclusion of these requirements 
in part 70 permits, however, does not diminish EPA's authority to 
enforce section 608 directly.
    On May 14, 1993, EPA promulgated final regulations pursuant to 
section 608 of the Act. These regulations require recycling of ozone-
depleting refrigerants which are recovered during servicing of non-
motor vehicle air conditioning or refrigeration equipment. The rules 
also require recycling during disposal of all air conditioning and 
refrigeration equipment. In addition, the regulations establish certain 
service practices which reduce emissions of refrigerants and provide 
for training and certification of the technicians who service air 
conditioners and refrigeration equipment. A source is in the best 
position to ensure that any disposal or repair work done at the source 
is done only by technicians who are properly certified. In addition, 
part 70 requires a compliance certification signed by a responsible 
official. Inclusion of the section 608 requirements in the part 70 
permit will assist enforcement of these regulations by allowing 
permitting authority enforcement officials to investigate and monitor 
compliance with the requirements of this program.
    (3) Servicing of Motor Vehicle Air Conditioners--Section 609. The 
EPA believes that the regulations promulgated under section 609 of 
title VI should be in part 70 permits to facilitate implementation and 
enforcement of those regulations. Inclusion of those requirements in a 
part 70 permit does not diminish EPA's authority to enforce section 609 
directly.
    On July 14, 1992, EPA promulgated final regulations pursuant to 
section 609 of the Act (40 CFR 82, Subpart B, 57 FR 31241). These 
regulations prescribe standards and requirements for servicing motor 
vehicle air conditioners. The regulations also require certification 
for service technicians who repair or service motor vehicle air-
conditioning units. Technicians must be certified to use approved 
equipment to recover and recycle certain refrigerants. The regulations 
also prohibit the sale of small containers (under 20 pounds) of ODS to 
anyone except certified technicians.
    Many part 70 sources have company cars or fleets of motor vehicles. 
The need for motor vehicle air conditioner maintenance and service is 
routine and foreseeable. In addition, technicians who perform the MVAC 
repair and maintenance are usually either employees of the part 70 
source or independent contractors. The source is in the best position 
to ensure these technicians are properly certified before performing 
any work. The EPA believes that including section 609 requirements in 
operating permits will enhance compliance with these requirements by 
requiring a compliance certification signed by a responsible official.
    (4) Nonessential Products Containing Chlorofluorocarbons--Section 
610. On January 15, 1993, EPA promulgated final regulations which 
prohibit the sale and distribution, or offer of sale or distribution, 
of certain ``nonessential'' products into interstate commerce which 
contain or were produced with CFC's after specified dates (40 CFR 82, 
Subpart C, 58 FR 4768). On December 30, 1993, EPA promulgated final 
regulations which prohibit the sale and distribution, or offer of sale 
or distribution, of certain ``nonessential'' products into interstate 
commerce which contain or were produced with hydrochlorofluorocarbons 
(HCFC) after specified dates (40 CFR 82, Subpart C, 58 FR 69637). 
Examples of ``nonessential'' products are cleaning fluids for 
noncommercial photographic or electronic equipment. These rules involve 
the movement of certain items into interstate commerce, not the 
emission of pollutants from stationary sources. The EPA believes that 
the operating permit program was not intended to implement and enforce 
these types of provisions, and that the section 610 regulations are 
more appropriately implemented and enforced nationally by EPA, 
therefore, EPA believes that section 610 applicable requirements need 
not be contained in operating permits.
    (5) Labeling--Section 611. On February 11, 1993, EPA promulgated 
final regulations establishing labeling requirements for products 
manufactured with ODS, products that contain these substances, and the 
physical containers of these substances (40 CFR 82, Subpart E, 58 FR 
8136). These products must contain a conspicuous ``warning label'' 
which clearly informs the reader that the product contains (or was 
manufactured with) substances which harm ``* * * public health and the 
environment by destroying ozone in the upper atmosphere * * *'' (40 CFR 
82.106). The warning label requirement does not necessarily apply to 
particular facilities, but instead applies more generally to the 
company which produces covered products. Inclusion of these 
requirements in a part 70 permit could thus be inappropriate or at 
least unnecessary. Accordingly, EPA believes that there is no 
significant benefit to including these requirements in part 70 permits 
and proposes that they not be included.
    (6) Safe-Alternatives--Section 612. On March 18, 1994, EPA issued 
final regulations pursuant to section 612 of the Act establishes a 
program to identify, evaluate, and, if warranted, regulate substitutes 
for ODS (40 CFR 82, Subpart G, 59 FR 13044). This program is called the 
Significant New Alternatives Policy (SNAP) program and is intended to 
facilitate the switch to non-ozone-depleting chemical substitutes. The 
EPA believes that this program cannot be implemented via operating 
permits because EPA is charged with judging the acceptability of non-
ozone-depleting chemical substitutes. This function must be performed 
at the Federal level to provide for national consistency. However, 
operating permits may refer to the SNAP list of acceptable ODS 
alternatives in order to provide maximum flexibility under regulations 
promulgated under sections 608 and 609.
    The EPA reserves the right to determine through future rulemaking 
that the applicable requirements of title VI it today proposes to not 
include in part 70 permits be included if evidence arises indicating 
that such applicable requirements should be contained in operating 
permits. Similarly, EPA may determine in future rulemaking that the 
applicable requirements of sections 608 and/or 609 need not be 
contained in operating permits.
2. Administrator
    In several places in part 70, a change is made where reference is 
made to the Administrator to reflect that the appropriate reference 
should be ``his or her'' instead of ``his.''
3. Deletion of ``Section 502(b)(10) Change'' Definition
    The definition of ``Section 502(b)(10) changes'' is being deleted 
since the provisions using that term are being revised such that the 
term is no longer needed. Refer to the previous discussion of the 
revisions proposed to be made to the permit revision procedures in 
Sec. 70.7.
4. Addition of Major NSR and Minor NSR Definitions
    Definitions of ``major new source review'' and ``minor new source 
review'' are being added so they can be used in describing the proposed 
revised permit revision procedures. Since the various processes by 
which permits would be revised under the proposed four-track system 
often would depend on whether the change had been previously subject to 
major or minor NSR, it is critical to define these terms.
5. Major Source Definition
    a. SIC Codes for Hazardous Air Pollutants (HAP's) Sources. Today's 
proposal would change the definition of major source in part 70 to 
conform to the definition in section 112(a) of the Act and implementing 
regulations governing HAP's sources recently promulgated in 40 CFR part 
63. Under the current definition of ``major source'' in part 70, a 
stationary source or group of stationary sources located within a 
contiguous boundary and under common control would be considered to be 
a major source only if those stationary sources belong to the same two-
digit SIC code. However, in section 112 of the Act and 40 CFR part 63 
there is a somewhat broader definition of major source of HAP emissions 
(see 40 CFR 63.2). ``Major source'' is defined in part 63 as any 
stationary source or group of stationary sources located within a 
contiguous boundary and under common control that emits (or has the 
potential to emit, considering controls) above a threshold level of 
HAP's, regardless of SIC code commonality.
    As currently written, part 70 requires some, but not all, sources 
considered major under part 63 to obtain a part 70 permit. Unless the 
part 70 definition is revised as proposed, there will likely be some 
sources that are major for purposes of part 63 but not major for 
purposes of part 70. These sources could be subject to a section 112 
standard or other requirement, but under the current rule would not 
have to apply for and obtain a part 70 permit until required to do so 
by a specific section 112 standard. Section 501 of the Act defines 
major source for title V purposes as, among other things, major sources 
as defined in section 112 of the Act. Section 502(a) requires that all 
major sources obtain permits. Since EPA has defined section 112 major 
sources in part 63, there is no basis for a different definition in 
part 70. Moreover, EPA believes the implementation of section 112 will 
be enhanced if it is clear from the start that any source that would be 
major under part 63 must apply for a part 70 permit within 12 months 
(or a shorter time designated by the permitting authority) of becoming 
subject to the part 70 program. Therefore, today's notice proposes to 
change the definition of major source in part 70 to include all sources 
defined as major in part 63.
    b. Fugitive Emissions. The current definition of ``major source'' 
in part 70 requires sources to count fugitive emissions in determining 
major source status for PSD and nonattainment NSR purposes, when the 
source is subject to a standard promulgated under section 111 or 112 of 
the Act, regardless of when the standard was established. In previous 
rulemaking under section 302(j), EPA has determined that fugitive 
emissions for purposes of NSR are to be counted for sources in 
categories subject to section 111 or 112 standards that were 
established prior to August 7, 1980. One petitioner asserts that EPA 
may not require that fugitives be counted in determining NSR major 
source status for sources in categories subject to section 111 or 112 
standards promulgated on or after August 7, 1980 without conducting 
future rulemaking under section 302(j).
    The EPA agrees that it did not follow the procedural steps 
necessary under section 302(j) to expand the scope of sources for which 
fugitives must be counted in making NSR major source determinations. 
Today's proposed revision would thus change paragraph (2)(xxvii) of the 
definition of ``major source'' such that only a source belonging to a 
source category subject to a section 111 or 112 standard issued prior 
to August 7, 1980 would be required to count fugitive emissions of the 
pollutant regulated by that standard in determining if it were major 
for NSR purposes. States would not be required to provide that a source 
belonging to source category subject to a section 111 or 112 standard 
promulgated after August 7, 1980 include fugitive emissions of the 
relevant pollutant in its calculation of NSR major source status, 
unless and until EPA conducts future section 302(j) rulemaking (except 
where such a source would qualify as a support facility; see discussion 
below).
    With respect to determinations of major source status under section 
112, EPA believes the Act requires that fugitive emissions, to the 
extent quantifiable, be counted. The section 112(a)(1) ``major source'' 
definition is distinguishable from the part C and part D definitions of 
major source in some important respects. Section 112(a)(1) uses the 
term ``major source'' as opposed to ``major stationary source,'' and 
legislative history indicates an intent to treat this definition as 
distinct from the section 302(j) ``major stationary source'' 
definition. The Senate Committee Report states that ``[t]he concept of 
`major source' is not used in the current regulatory regime for 
hazardous air pollutants and, thus, a definition of `major source' 
ne[e]ds to be added to section 112. The definition established here 
will only apply in the context of this section and should not be 
confused with other meanings of the term `major source' in [parts C and 
D] of the Act'' (S. Rep. No. 228, 101st Cong., 1st Sess. 150-51 
(1989)). Moreover, section 112 establishes a new regulatory program the 
focus of which is specific hazardous air pollutants at source 
categories to be determined by EPA. All this suggests that the section 
302(j) rulemaking requirement does not apply in the context of section 
112, and that fugitive emissions must therefore be included for 
purposes of determining whether a source is major under section 
112(a)(1).
    The current part 70 rule requires that fugitive emissions be 
included in the determination of major sources of section 112 
pollutants under paragraph (1) of the definition of ``major source,'' 
although EPA acknowledges that the existing language may be unclear in 
this respect. In paragraph (1)(i) of the definition of ``major 
source,'' therefore, the words ``including fugitive emissions'' are 
proposed to be added to clarify that fugitive emissions of any 
hazardous air pollutant listed in section 112(b) of the Act must be 
counted in calculating the source's emissions to determine if the 
source is major under section 112(a)(1).
    Pollutants for which a standard has been set under section 112 
after August 7, 1980 are included in the list of HAP's in section 
112(b) of the Act. Fugitives for those pollutants must thus be counted 
in determining whether a source is major under paragraph (1)(i) of the 
part 70 definition of ``major source.''
    For further analysis of when fugitives must be counted in making 
major source determinations under the Act, see in the docket for this 
rulemaking (A-93-50) the March 8, 1994 memorandum, ``Consideration of 
Fugitive Emissions in Major Source Determinations'' from Lydia Wegman, 
Deputy Director, Office of Air Quality Planning and Standards to EPA's 
Regional Office Air Division Directors.
    c. Support facility. A clarification of the definition of ``major 
source'' is proposed to reflect EPA's intention with respect to 
including the emissions of support facilities when determining if a 
source is major. The preamble to the part 70 proposal states that ``* * 
* any equipment used to support the main activity at a site would also 
be considered as part of the same major source regardless of the 2-
digit SIC code for that equipment'' (56 FR 21724). The discussion goes 
on to indicate that greater than 50 percent of the output of the 
support equipment would have to be dedicated to a source to be 
considered as part of the same major source. The proposed clarification 
would establish the term ``support facility'' and specify that 
emissions from such a facility would be included with the source it is 
supporting if 50 percent or greater of its output were dedicated to 
that source.
6. Potential to Emit
    The current definition of ``potential to emit'' in part 70 refers 
to limitations enforceable by the Administrator. Several petitioners 
pointed out that federally-enforceable potential to emit limits are 
enforceable under the Act by the Administrator and by citizens. The 
Administrator agrees, and thus proposes to revise the definition so 
that limitations are considered in determining a source's potential to 
emit if they are enforceable by the Administrator and citizens under 
the Act.
7. Responsible Official
    The definition of ``responsible official'' is proposed to be 
revised to allow a person other than the designated representative to 
be the responsible official for activities not related to acid rain 
control at affected sources. The reason for this proposed change is 
that the nature of the responsibilities of a designated representative 
(e.g., performing allowance account transactions) has prompted many 
owners and operators of affected sources to select corporate personnel, 
in lieu of site personnel, to act as their designated representative. 
Such persons, though, may not be in the best position to handle title V 
duties not related to acid rain. This revision, therefore, would allow 
sources to designate the appropriate individual to carry out each 
responsibility. Procedurally, the designated representative would still 
be responsible for signing all documents relating to acid rain (e.g., 
the acid rain permit applications and revision requests) and would be 
authorized to submit them directly to the permitting authority for 
action without the consent of the non-acid rain responsible official. 
Similarly, the non-acid rain responsible official may carry out 
responsibilities not related to the acid rain program without the 
consent of the designated representative.
8. Title I Modification
    As previously discussed, the failure of the current rule to define 
the phrase ``modification under any provision of title I of the Act,'' 
has caused confusion and controversy. The EPA is thus proposing today 
to add a new definition of ``Title I modification'' or ``modification 
under any provision of title I'' to specify that it includes minor NSR 
actions.

B. Section 70.3--Applicability

1. Part C and D Sources
    Section 502(a) of the Act includes in the list of sources required 
to obtain a permit ``* * * any other source required to have a permit 
under part C or D of title I. * * *'' Although this category was not 
specifically mentioned in Sec. 70.3(a), EPA notes that sources required 
to obtain a permit under part C or D of the Act are also major sources 
which are subject to part 70. Today's proposal would add a separate 
item to Sec. 70.3(a) with respect to sources required to obtain permits 
under parts C and D to make it parallel with the Act.
2. Nonmajor Sources
    Sections 70.3(a) (2) and (3) of the current part 70, as part of the 
list of sources that must obtain permits under part 70, refer to any 
source, including an ``area'' source subject to a standard, limitation, 
or other requirement under sections 111 and 112 of the Act, 
respectively. Section 70.3(b)(1) then refers to sources that are not 
major being eligible for an exemption from permitting. Essentially, 
``area source'' and ``nonmajor source'' mean the same thing for 
purposes of part 70 and language is proposed to be added to 
Secs. 70.3(a) (2) and (3) to clarify this point.
3. Section 112(r) Pollutants
    Currently, Sec. 70.3(a)(3) requires any source subject to a 
standard or other requirement under section 112 of the Act to obtain a 
part 70 permit unless it would be subject to part 70 solely because it 
is subject to regulations or requirements under section 112(r). Section 
112(r)(3) requires EPA to promulgate a list of regulated substances and 
thresholds for the prevention of accidental releases. Section 112(r)(4) 
establishes criteria for the development of the list of regulated 
substances, focusing on acute effects which result in serious off-site 
consequences, rather than chronic effects. As a result, many of the 
substances that EPA listed in 40 CFR 68.130 pursuant to section 
112(r)(3) (59 FR 4478 (January 31, 1994)) are not regulated elsewhere 
under the Act.
    Questions have been raised as to whether section 70.3(a)(1), which 
provides that ``any major source'' is subject to the permit rule, 
requires that sources that have major source levels of section 112(r) 
pollutants must be permitted. Setting aside the issues of whether and 
how major source status is to be determined for section 112(r) 
purposes, section 112(r)(7)(F) exempts from title V permitting 
requirements any source that would be subject to title V only as result 
of being subject to section 112(r) requirements. That section provides 
that ``[n]otwithstanding the provisions of title V or this section, no 
stationary source shall be required to apply for, or operate pursuant 
to, a permit issued under such title solely because such source is 
subject to regulations or requirements under this subsection.'' It is 
thus clear that even if a source could be considered a ``major source'' 
for section 112(r) purposes, it would not be subject to title V 
permitting on that basis alone. The EPA proposes to revise section 
70.3(a) to clarify this point.

C. Section 70.4--State Program Submittals and Transition

1. Group Processing
    The reference in section 70.4(b)(3)(xi) to the 180-day time limit 
for group processing of minor permit modifications is proposed to be 
deleted since the proposed minor permit revision provisions would make 
it no longer applicable. See the discussion above on the proposed 
changes to the permit revision provisions.
2. Judicial Review Time Period
    Section 70.4(b)(3)(xii) in the current part 70 requires that a 
program may allow a period of no more than 90 days for filing petitions 
for judicial review after a final permit action or after new grounds 
for review arise. Several petitioners pointed out that the 90-day limit 
is shorter than that provided by some State or local statutes. They 
argued that it is inappropriate for the Federal Government to be 
requiring shorter statutes of limitation than those provided by State 
or local law.
    The Agency included the 90-day limit in the current rule to ensure 
the finality of permit terms and conditions. Without such a limit, 
challenges to permit terms and conditions would likely take place in 
the context of enforcement actions, thus undercutting the title V 
purpose of improving the enforceability of Act requirements. The Act 
itself contains such a limit on judicial review of EPA rules (see 
section 307).
    At the same time, EPA wants to build on, and not unnecessarily 
disrupt, State and local programs. The Agency believes that a judicial 
review time limit of 125 days from the date a permit is issued or 
revised would not require any State or local agency to revise 
applicable State or local statutes of limitation. Lengthening the 
period for obtaining judicial review to 125 days should not 
significantly undermine the goal of obtaining finality. The Agency thus 
proposes to revise the current rule to extend the allowable judicial 
review period to 125 days. As under the current rule, permitting 
authorities would be free to establish shorter time periods.
3. Program Revision
    Section 70.4 of the current rule contains provisions governing when 
and how operating permits programs are to be revised. As explained in 
section 70.4(i), State or local programs may need to be revised when 
the relevant Federal or State or local statutes or regulations are 
revised. Today's notice proposes a number of revisions to the Federal 
regulations establishing the minimum elements of operating permits 
programs that, if promulgated, will require revisions of those permit 
programs. In this section of the preamble, EPA is also proposing a few 
changes to the provisions that will govern permitting authority efforts 
to revise their programs.
    The Agency proposes to consolidate the provisions governing 
operating permits program revisions in section 70.4(i) and to set 
deadlines for submission of program revisions to EPA for approval. 
Specifically, EPA proposes to delete the second sentence of section 
70.4, which requires permitting authorities to submit permit program 
revisions as needed in response to part 70 revisions within 12 months 
of EPA promulgating the part 70 revisions or such other time as the 
Administrator authorizes. That sentence would be replaced by deadlines 
established in section 70.4(i) for submission of various types of 
program revisions to EPA.
    Where a permitting authority could revise its program to comport 
with part 70 revisions without changing State or local law or 
regulations, the permitting authority would be required to submit its 
revisions within 180 days of the publication of the part 70 revisions. 
Where a change in State or local regulations were needed, the 
permitting authority would have up to 12 months to submit the 
revisions. Where statutory changes were needed, the permitting 
authority would have up to 2 years to complete the necessary changes. 
Notwithstanding these deadlines, the Administrator could set other 
deadlines as appropriate. This graduated series of timeframes reflects 
the probable effort needed by State and local agencies to accomplish 
different types of program revisions. Where State legislatures meet 
only every 2 years, however, 2 years may not be enough time. The 
Administrator could provide a longer timeframe in such an instance 
under the proposed revisions to Sec. 70.4(i).
4. Savings Provision
    Several State and local permitting authorities have raised 
questions and concerns about the effect that revisions to part 70 will 
have on the Agency's approval of operating permits programs that were 
developed in light of the current rule. While a number of State and 
local authorities have yet to submit their part 70 programs to EPA for 
approval, many have submitted their programs and all State and local 
authorities have relied on the current rule in designing their 
programs. Many permitting authorities have expressed the concern that 
if EPA were to base program approval decisions on the revised part 70, 
most if not all submitted programs would be disapproved.
    The Agency recognizes this timing concern and is proposing a new 
paragraph (j) to be added to Sec. 70.4 to govern how submitted programs 
that were developed based on the current part 70 would be reviewed by 
EPA after promulgation of the part 70 revisions. The proposal would 
allow State and local agencies to submit programs based on the current 
part 70 for up to 6 months after promulgation of the revised part 70. 
The EPA would then evaluate those programs under part 70 as originally 
promulgated. The permitting authority could also request that its 
program, or portions of it, be judged against the revised part 70.
    Programs receiving approval based on the originally promulgated 
part 70 would still have to be revised to conform with the revised part 
70 in accordance with the schedule being proposed in Sec. 70.4(i) for 
program revisions. Programs submitted after the 6-month period would be 
evaluated against only the revised part 70.
    The EPA believes it may provide for such ``grandfathering'' of 
permit programs developed and submitted pursuant to part 70 as 
originally promulgated (see Sierra Club v. EPA, 719 F.2d 436 (D.C. Cir. 
1982), cert. denied, 468 U.S. 1204 (1984) and memorandum from Gerald 
Emison, June 27, 1988, ``Grandfathering of Requirements for Pending SIP 
Revisions''). First, the proposed changes to the part 70 provisions for 
permit revisions would represent a significant departure from the 
regime under which permitting authorities are currently required to 
develop programs. Permitting authorities will need adequate time to 
develop program revisions consistent with the new requirements and 
could not reasonably be expected to convert their programs to the new 
system immediately. Second, EPA recognizes that the process for 
developing part 70 programs is time-consuming, and does not wish to 
inadvertently punish State and local agencies that have relied on the 
existing rule in developing programs for submittal to EPA. Third, EPA 
does not believe there is a strong statutory interest in applying the 
revised part 70 immediately upon promulgation, especially where State 
and local agencies have developed and submitted programs in good faith 
based on the current rule.
    Other reasons also strongly support a 6-month transition period. 
Some State and local agencies may be submitting initial part 70 
programs in 1995. To require review of those programs under the revised 
part 70 could result in imposition of a Federal program since programs 
submitted based on the current part 70 would not likely be approvable 
under the proposed revised part 70. The proposed 6-month grandfathering 
period allows EPA a reasonable opportunity to approve programs 
developed under the current part 70 and avoid unnecessary imposition of 
a Federal program.
    The EPA solicits comment on the appropriateness of the proposed 
grandfathering provision and the adequacy of a 6-month period following 
promulgation during which permitting authorities could submit programs 
based on current part 70. The EPA also solicits comment on the need for 
grandfathering considering other options that could be provided, such 
as postponing the effective date of the revised part 70 (as discussed 
in the following section).
5. Phase In of New Requirements
    As previously discussed, to accommodate the workload associated 
with making regulatory and legislative changes, EPA proposes to allow 
permitting authorities a period of up to 2 years after promulgation of 
part 70 revisions to submit revisions of their part 70 programs. This 
is of particular importance because revisions to part 70 are likely to 
occur in two or more phases and, in addition, many permitting 
authorities will have to develop and submit program revisions to 
address deficiencies identified through the interim approval process. 
Most State and local agencies would like the effect of these revised 
part 70 provisions and the next series of revisions to be phased in 
such a way that existing programs are not disrupted.
    The EPA believes that avoiding undue disruption to State and local 
programs is important to program continuity and helps reduce 
uncertainty. The EPA also believes that there is sufficient flexibility 
in the Act (particularly after a permit program meeting the current 
part 70 is in place) to provide for a reasonable transition to the 
revised procedures for permit revisions and any changes in the 
requirements relating to the content of issued permits. This issue as 
it pertains to changes in permit content is not critical with respect 
to today's proposal since it would not impose significant new permit 
content requirements. In subsequent rulemaking, however, EPA may 
address one or more aspects of permit content. The EPA solicits comment 
on how specifically to balance the need to implement revisions to part 
70 expeditiously with the need to avoid undue disruption of State or 
local programs submitted under the current part 70. For changes in 
permit content requirements, any approach to balance these needs should 
minimize the workload that would be required to reopen and reissue 
permits before their renewal and to expedite the required updates to 
permits at the first convenient time.
    One possible approach to upgrading permit content would be to defer 
generally the incorporation of new, more restrictive requirements 
created by revisions to part 70 until renewal of issued part 70 
permits. Another approach would be, after the effective date of the 
revised State or local program but before the permit renewal date, for 
permit revisions processed through the significant permit revision 
process to include during that process incorporation of the additional 
requirements created by the part 70 revisions. In all cases, the permit 
shield would not preclude EPA, citizens, and the permitting authority 
from enforcing any applicable requirement to which the source would be 
subject outside the part 70 permit.
    The EPA solicits comment on these suggested approaches to phasing 
in new permit content requirements and the legal basis for them. With 
regard to new permit revision procedures, EPA is not today proposing to 
allow permitting authorities to phase them in. However, EPA solicits 
comment on the need to provide such relief. The EPA solicits comment on 
whether such relief is needed to address potential adverse impacts to 
permitting authorities. The Agency believes that there are widely 
differing State and local situations for implementing the new permit 
revision procedures. If this is of concern, one approach that promotes 
equitable treatment of these different situations is to prescribe, as 
previously outlined, varying deadlines for the submittal of program 
revisions depending on how difficult it is to development them (e.g., 
12 months for a State or local agency to accomplish rulemaking which 
does not itself require prior changes to enabling legislative 
authority). Another approach would be to establish one date by which 
all agencies would have to implement the new permit revision 
procedures. Permit issuance, renewal, or revision would be subject to 
the permitting authority's existing part 70 program until 
implementation of the new requirements by the agency, which could be 
before but not after the national date. Setting such a date would 
create national consistency, but would require that all permitting 
authorities act in time for EPA to approve their programs by the date. 
The EPA solicits comment on this approach and what any such date should 
be.
    In addition to the concern over impacts to permitting authorities, 
the Agency is also concerned with the potential transitional problems 
for sources. Sources may include in their permit applications, and have 
adopted into their permits, terms and conditions designed with an 
understanding of which permit revision tracks would be used to process 
changes at their facility and what other changes would qualify for off-
permit treatment. Such sources may wish, and need the opportunity, to 
redesign their permit terms and conditions when the proposed four-track 
permit revision system is adopted by the permitting authority, if the 
new permit revision system is not phased into effect. The EPA solicits 
comment on whether additional relief should be provided for sources 
that find themselves in this situation.
6. Processing Time for Early Reductions
    A minor change is proposed with respect to permitting authority 
action on permit applications containing early reduction 
demonstrations. In the current part 70 at Sec. 70.4(b)(11)(iii), State 
and local programs are required to include a transition plan providing 
final action within 9 months on any complete, initial permit 
application containing an early reductions demonstration (pursuant to 
section 112(i)(5) of the Act). Today's proposal would revise the 
interval for final action on such applications to 12 months. Although 
it is imperative that sources participating in the Early Reductions 
Program receive timely action on their permit applications, the 
original 9-month action requirement would in many cases be too short 
for adequate processing of the permit application by the permitting 
authority, especially considering the time needed for public review of 
draft permits. The proposed 12-month final action requirement would be 
consistent with a similar requirement for action on specialty permit 
applications under proposed 40 CFR part 71 subpart B, which provides 
for interim Federal issuance of specialty title V permits to sources 
participating in the Early Reductions Program until permitting 
authorities can begin issuing permits to such sources.
    The 12-month period for final action on applications containing 
early reductions demonstrations also has been proposed as a requirement 
under Sec. 70.7(a)(2). This change is necessary because permit 
applications (or applications for permit revision) under the Early 
Reductions Program may continue to be received by the title V 
permitting authority well after the transition period (possibly until 
around the year 2000), and these later applications must be processed 
just as quickly as those submitted during the transition period.

D. Section 70.5--Permit Applications

1. Complete Application
    Section 70.5(a)(2) of the current rule provides for criteria and 
procedures for determining when a permit application is complete. It 
specifies that unless the permitting authority determines that the 
application is not complete within 60 days of receiving it, the 
application is deemed complete.
    In response to a concern raised by one of the permits case 
petitioners, EPA wants to clarify that the permitting authority may 
deem an application complete if it contains the information needed for 
the permitting authority to begin processing the application. The 
application should contain the information it is required to contain 
under Sec. 70.5(c), but the permitting authority need not ensure that 
the application contains all of the information that the permitting 
authority ultimately finds necessary to issue a permit. Consistent with 
its original intent, Sec. 70.5(a)(2) is today proposed to be revised to 
provide expressly for the permitting authority to deem complete an 
application which contains information sufficient to allow the 
permitting authority to begin processing the application.
    The proposal would allow the permitting authority considerable 
flexibility to obtain additional information in recognition of the fact 
that it and sources are likely to discover the need for additional 
information as the permitting process progresses and that information 
to address certain applicable requirements (particularly those with 
future compliance dates) will only be available in the future. While 
Sec. 70.5(c) requires that a part 70 permit application for a subject 
source comprehensively address all applicable requirements of the 
source, the permitting authority under today's proposal would retain 
considerable discretion in deciding the amount of information needed 
for the completeness determination. The following illustrates the 
degree of flexibility that EPA believes would be available.
    Under the proposed rule revisions, a permitting authority could 
provide that an application for a source with an applicable requirement 
with a future compliance date is complete enough for processing if it 
contains (1) a statement acknowledging the applicability of the 
requirement, and (2) an acceptable schedule for submitting the more 
detailed information necessary to define its compliance. This approach 
would allow the source to defer the submittal of information that is 
not otherwise required at this time and that may be based on 
complicated control choices still open to the source. Such an approach 
for applications would be similar to EPA's proposed approach for 
incorporating MACT standards into part 70 permits (see section III.E.9. 
of this preamble).
    In addition, a permitting authority would have the flexibility to 
make completeness determinations consistent with its approved 
transition plan. That is, permitting authorities could require sources 
scheduled for permit issuance in years 2 and 3 of the initial phase-in 
of their program to submit less detailed applications than those 
sources scheduled for permit issuance in the first year, provided that 
the minimum requirements of Sec. 70.5(c) are met and that the required 
information is subsequently submitted to the permitting authority to 
allow permit issuance consistent with Secs. 70.7 and 70.8. Such an 
approach again would meet the requirements of Sec. 70.5(a) as well as 
assure needed flexibility to State and local agencies as they start up 
their approved part 70 programs.
    The EPA solicits comment on its proposal to allow these options for 
allowing additional flexibility to permitting authorities in 
determining complete applications after certain minimum criteria are 
met. In particular, the Agency is interested in receiving comment on 
how well its proposal addresses concerns over application content 
during the initial phase-in of State and local programs.
2. Identification of Units
    An addition to Sec. 70.5(c)(7) is proposed to make it consistent 
with the proposed permit revision procedures. Under the proposed 
change, a permit application would identify any units that were 
eligible for emissions trading or were eligible for the de minimis 
permit revision process. See the discussion above on proposed permit 
revision procedures under Sec. 70.7.
3. Compliance Information
    Section 503(b) of the Act requires that a sources include in its 
permit application a compliance plan describing how it will comply with 
the applicable requirements to which it is subject and including a 
schedule of compliance. The current rule implements that provision at 
Sec. 70.5(c)(8) by requiring that a source submit a compliance plan and 
schedule that for requirements with which the source is already in 
compliance, a statement to that effect, and for requirements to which 
the source will first become subject during the permit term, a 
statement that the source will comply with those requirements.
    State petitioners in the permits case expressed concern that the 
rule might be read to prohibit permitting authorities from requiring 
compliance plans and schedules that contained more information and 
enforceable milestones than those required by the rule. The Agency 
wishes to make clear that the permits rule in general, and the 
compliance plan and schedule provision in particular, only establish 
minimum requirements for State or local permit programs. State and 
local permitting authorities are free to prescribe more stringent 
permitting requirements, including more extensive compliance plan and 
schedule requirements.

E. Section 70.6--Permit Content

1. Clarification of EPA's View on Referencing of Requirements
    Petitioners have asked for clarification as to how much of the 
permit content required by Sec. 70.6 may be referenced rather than be 
required to reside in the permit. The EPA did not address this issue in 
the July 21, 1992 preamble; however, the Agency did respond to comments 
on this issue in the ``Technical Support Document for title V Operating 
Permit Programs,'' May 1992, which is in public docket number A-90-33 
for the final part 70 rulemaking. In that document, EPA states that 
emission limit, test method, and monitoring and recordkeeping 
requirements should within reason be placed in the permit, rather than 
referenced. The Agency also stated that referencing may be appropriate, 
however, where the test method is too cumbersome to be placed entirely 
in the permit.
    To clarify its position on this issue, EPA notes that certain 
elements must be included in the permit. Section 504(a) states that 
each permit ``shall include enforceable emission limitations and 
standards'' and ``such other conditions as are necessary to assure 
compliance with the applicable requirements.'' In addition, section 
504(c) requires each permit to ``set forth inspection, entry, 
monitoring, compliance certification, and reporting requirements to 
assure compliance with the permit terms and conditions.'' The EPA 
believes these provisions place limits on the type of information that 
need not be contained in the permit and can be referenced. Clearly, 
each emission limit with its basis of origin must expressly be included 
in the permit. In addition, the permit must contain monitoring, 
compliance certification, and reporting requirements necessary to 
assure compliance with the emission limit.
    A key principle, then, is that any referenced provision must not 
interfere with the enforceability of other permit terms and conditions. 
This means that the reference citation must be free of ambiguity 
regarding applicability. Thus, requirements may be referenced only 
where their applicability to the source is clearly beyond dispute. 
Referencing should not allow enforcement of the permit to be 
compromised, for example, by a defense by the source that it is using 
an alternative provision in the referenced provision. Such alternatives 
must be expressly included in the permit.
    Current practices in some State and local permit programs would 
clearly not meet this principle. Some State and local permits have 
simply referenced the applicable requirement without expressly 
including emission limitations, monitoring, reporting, and other 
requirements. The EPA believes such a practice is inadequate to meet 
the requirements of sections 504 (a) and (c). For example, it would be 
insufficient to cite ``Subpart VVV of the NSPS'' as the applicable 
requirement for a source without also restating in the permit the 
emission limitations, monitoring requirements, the applicable test 
method, or other compliance terms from the NSPS.
    On the other hand, EPA recognizes that when used appropriately by 
permitting authorities, referencing may support enforcement of permit 
terms and meet the requirements of sections 504 (a) and (c). In 
addition, referencing could help reduce the size of the permit and 
eliminate the unnecessary restatement of technical procedures.
    Referencing appears to be generally appropriate for (1) test 
methods, (2) definitions, (3) startup, shutdown, or malfunction 
requirements or plans, and (4) detailed emission calculation protocols. 
For example, it would be appropriate for a permit to require that 
testing be performed using EPA method 25, without containing the 
detailed provisions of method 25, or the permit could require that a 
source comply with startup, shutdown, and malfunction requirements of 
the SIP and cite the section of the SIP containing those requirements. 
It would not be appropriate, however, merely to cite a regulation 
containing procedures for determining emission limits, such as a 
process weight curve. The permit would need to include the specific 
emission limit that applies to the source or unit covered by the 
permit. It would have to include the results from the procedure and 
could not simply cite the procedure itself. The EPA solicits comment on 
other types of requirements for which referencing would be appropriate.
    The EPA also solicits comment on any criteria that would be 
necessary for adequate citation of referenced requirements. One 
possible criteria might be the date of the adopted rule being 
referenced. The EPA solicits comment on an approach in which the permit 
would cite the date of the referenced requirement, but also would 
reference any subsequent revisions to the requirement. This would 
provide for automatic updating of the referenced requirement when test 
methods or other requirements residing outside of the permit are 
revised, and avoid the need to revise the permit.

F. Section 70.7--Permit Issuance, Renewal, Reopenings, and Revisions

1. New Applicable Requirements
    The July 21, 1992 preamble to the current rule (57 FR 32275) 
included a discussion of EPA's intent to revise part 70 in the future 
to provide for a system of grandfathering, whereby requirements that 
are promulgated or approved late in the permit issuance or renewal 
process may be incorporated into the permit after issuance or renewal. 
This discussion was a response to concerns expressed by permitting 
authorities late in the part 70 rulemaking process that the 
promulgation of new requirements, particularly by EPA, could 
significantly delay individual permit actions. Delay could occur 
because of the part 70 requirement that any permit issued or renewed 
must assure compliance with all applicable requirements, and because 
incorporation of requirements promulgated during or after the public 
comment period for permit issuance or renewal would require another 
round of public and EPA review. These permitting authorities argued 
that implementation of title V and the Act would be enhanced if the 
permit could be issued on schedule and the new applicable requirements 
be incorporated through a permit reopening.
    While EPA was sympathetic to these concerns, it was not able to 
take action in the final part 70 rule because the issue had not been 
properly noticed in the proposal, nor had it been raised in comments 
submitted during the comment period. However, permitting authorities 
have continued to express these concerns to EPA since promulgation of 
part 70. The EPA is therefore taking this opportunity to propose 
revisions to part 70 that would address this concern.
    Since promulgation of the current part 70, EPA has learned that the 
potential for delay is even greater than anticipated due to the fact 
that the majority of States must, as a matter of State constitutional 
law, conduct rulemaking to adopt a Federal standard before 
incorporating the standard into the permit. Although the time 
associated with administrative rulemaking varies among State and local 
agencies, the need for this additional step could typically add several 
months up front before the permitting authority could issue a draft 
permit reflecting the new requirement.
    Today's notice proposes a system in a new Sec. 70.7(a)(7) similar 
to, though less complex than, that discussed in the July 21, 1992 
preamble. The proposal would allow requirements promulgated or approved 
by EPA following the issuance of the draft permit to not be 
incorporated in the version of the permit that is subsequently issued 
and effective. The proposal would place two conditions on this. First, 
the permitting authority would have to commence action prior to 
issuance of the permit to reopen the permit to incorporate the new 
requirements. This reopening process and subsequent reissuance of the 
permit would have to be completed within 18 months of approval or 
promulgation of the new applicable requirement as required by 
Sec. 70.7(i). Second, the permit that is issued must indicate that the 
permit is being reopened for this purpose.
    The EPA believes this approach is consistent with the Act. Section 
504(a) requires that each permit include conditions necessary to assure 
compliance with applicable requirements. Today's proposal reduces the 
likelihood of delayed issuance of permits. By allowing the issued 
permit to address only the requirements that were applicable at the 
time of draft permit issuance, these requirements will be reflected in 
an effective part 70 permit sooner than would be the case if part 70 
procedures had to be repeated to incorporate the new requirements.
    This potential for delay is increased for those permitting 
authorities that must first conduct rulemaking before procedures to 
incorporate the new requirement can begin. Conceivably, this delay 
could be repeated numerous times. This clearly would frustrate the 
purposes of section 504(a) if the permitting authority's ability to 
issue an effective part 70 permit were hampered in this way. By 
removing this obstacle, the proposed rule would also further the 
purposes of section 502(b)(6), which requires that permit issuance 
procedures be ``expeditious,'' as well as section 503(c), which 
requires that permit actions be completed within 18 months.
    This approach is also consistent with section 502(b)(9) of the Act, 
which requires that a permit be reopened to include requirements 
promulgated by the EPA ``after the issuance'' of a permit. Although 
this could be read to imply that requirements promulgated before permit 
issuance must be included in the permit before issuance of an effective 
permit may occur, the EPA believes the term ``issuance,'' as used in 
this provision, may also be read to refer to issuance of the draft 
permit. This reading results in a more rational system for 
incorporation of new requirements, and avoids the delays referred to 
above that would frustrate the purposes of title V.
    An additional benefit of today's proposal is that it is consistent 
with an overarching principle of the Act that implementation should 
rest primarily with the State and local governments. Today's proposal 
would provide a better accommodation between specific part 70 
requirements and State constitutional due process concerns.
    The EPA notes that permitting authorities may be more stringent 
with regard to incorporation of new requirements than this proposal 
would provide, and must, pursuant to Sec. 70.5(a)(2), have authority to 
request additional information necessary to take final action on the 
permit. This latter authority should allow the permitting authority to 
require incorporation of newly applicable requirements not reflected in 
the permit on a case by case basis.
2. Denial of Permits to Noncomplying Sources
    One of the concerns raised by State litigants in the permits case 
was the rule's possible effect on a permitting authority's ability to 
deny permits to sources that are not in compliance with applicable 
requirements. These litigants noted that the rule does not explicitly 
authorize permitting authorities to deny permits to noncomplying 
sources and might thus be read as not allowing them to do so. They 
pointed out that some State and local statutes forbid the issuance of 
permits to noncomplying sources and that other permitting authorities 
generally have discretion under State or local law to deny permits to 
such sources. The ability to deny permits to noncomplying sources, they 
argued, was important to the enforcement of clean air rules.
    The Agency believes that the current rule does not prohibit or 
prevent permitting authorities from exercising their discretion to deny 
permits to noncomplying sources. The rule sets forth minimum criteria 
governing the issuance of permits, but it does not require that 
permitting authorities issue permits when only these requirements are 
met. Section 70.7(a) provides that ``[a] permit * * * may be issued 
only if all of the following conditions have been met'' (emphasis 
added), indicating that the permitting authority has discretion to not 
issue a permit even when all of the requisite conditions have been met. 
As EPA explained in the preamble to the current rule, one of the 
Agency's guiding principles in implementing title V was to build on 
State and local programs and not unnecessarily disrupt them. The Agency 
is particularly reluctant to reduce existing State or local authority 
to take measures to bring sources into compliance with applicable 
requirements and believes that the current rule does not affect such 
State or local authority. The EPA notes that permitting authorities 
following this approach must do so consistent with Federal law. Where a 
permitting authority denies an application for a part 70 permit, it is 
in effect ordering the source to cease operations or risk an 
enforcement action under the Act.
    At the same time, EPA believes that one of the benefits of the 
permit issuance process is to provide an opportunity for a permitting 
authority and a noncomplying source to work out a plan for bringing the 
source into compliance. The statute and rule explicitly provide that a 
permit application include a source's proposed schedule of compliance, 
which the statute defines as a schedule of ``remedial measures'' 
leading to compliance with applicable requirements. The statute and 
rule thus contemplate that permits can and generally will be a vehicle 
for bringing sources into compliance. While permitting authorities 
retain discretion to deny permits to noncomplying sources, EPA expects 
that permitting authorities will generally use permits to provide a 
schedule of enforceable measures that will lead to compliance as 
opposed to a sanction against noncompliance. The current rule and 
statute's provision for compliance schedules in no way limits the 
liability of the source under the Act while the violation continues 
during the schedule of remedial measures. Obviously, most permits with 
a compliance schedule will be accompanied by a settlement of an 
enforcement action addressing the violation. The Agency believes that 
appropriate exceptions to this approach include where State or local 
law prohibits issuing permits to noncomplying sources or where a 
source's noncompliance is longstanding or otherwise egregious.
3. Permit Revocation Procedures
    State litigants also expressed concern that the current rule may 
require that permitting authorities use permit issuance procedures to 
revoke permits. They noted that many State or local statutes authorize 
the use of faster proceedings to revoke the permits of sources found in 
noncompliance and that the availability of such procedures contributes 
to the effectiveness of State and local enforcement efforts. They urged 
that part 70 not constrain permitting authority ability to use such 
faster proceedings.
    The Agency believes that part 70 does not address the issue of what 
procedures a permitting authority must use when it seeks only to revoke 
a permit, as opposed to revoke and revise or reissue a permit. Section 
70.7(f)(1) requires that every permit contain provisions specifying 
when the permit will be reopened prior to the end of its term, 
including when EPA or the permitting authority determines that the 
permit must be ``revised or revoked'' to assure compliance with 
applicable requirements. Section 70.7(f)(2) provides that proceedings 
to ``reopen and issue'' a permit shall follow permit issuance 
procedures (emphasis added). Accordingly, although one of the reasons 
for permit reopening is revocation, the requirement to use permit 
issuance procedures only applies when the permitting authority wants to 
reissue the permit. The rule is silent with regard to the procedures 
that must be used to only revoke a permit.
    Again, EPA's approach to the permits rule has been to avoid 
unnecessary interference with the way State and local agencies 
implement their air pollution control programs. The Agency believes 
there is no reason to require a permitting authority to undertake 
permit issuance procedures if its only objective is to revoke a permit. 
The Agency expects that permitting authorities will rarely seek to only 
revoke and not also reissue a permit, given the consequences of permit 
revocation on the source. At the same time, it recognizes that 
permitting authorities have legitimate reasons for wanting to retain 
the authority they now have to revoke permits using expedited 
procedures. The Agency thus believes that the rule is properly read to 
leave permitting authorities broad discretion to devise permit 
revocation procedures, provided that the affected source is afforded 
due process, including prior notice and an opportunity to object.

G. Section 70.8--Permit Review by EPA and Affected States

1. Notification of 45-Day Review
    The public has 60 days after the end of EPA's 45-day period for 
review of a proposed permit to petition EPA to object to the permit if 
EPA did not object. There is no provision in part 70, however, to let 
the public know when EPA's 45-day period begins or ends, making it 
particularly difficult for the public to exercise this option. The 
proposed revision to Sec. 70.8(d) would require that the permitting 
authority provide public access to information concerning the beginning 
and end of EPA's 45-day review period for permit actions. No specific 
means for providing public access are proposed. The permitting 
authority would not have to give the public notice, but could provide 
public access through a telephone hot line, a computer terminal at the 
permitting agency office, a bulletin board, or any other reasonable 
means that the public could use to get the information on a timely 
basis.

H. Section 70.9--Fee Determination and Certification

1. Periodic Updates to Demonstration
    The obligation of the Administrator under section 502(i) of the Act 
to assure adequate administration and enforcement of permitting 
programs includes assurance that programs are adequately funded on a 
continuing basis. The Administrator may, therefore, periodically need 
information from the permitting authority that verifies funding is 
adequate. Section 70.9(c) requires that the permitting authority 
demonstrate fee adequacy; however, the language does not make clear 
that periodic information may be required if fee adequacy comes into 
question. The proposed revision adds to paragraph (c) language that is 
found in paragraph (d), which pertains to demonstrating that required 
fees are used solely for purposes of the operating permits program. The 
proposal is to add ``(and periodic updates as required by the 
Administrator)'' after the requirement for a demonstration.

I. Section 70.10--Federal Oversight and Sanctions

1. Citation Correction
    A correction to a paragraph citation is proposed for three places 
under paragraph (b). All three citations are for the Administrator's 
finding of inadequate program administration and enforcement. The 
citations are to paragraph (c)(1) and should be corrected to read 
``(b)(1).''
2. Sanctions Provisions
    a. Proposed Change.--The Agency proposes to revise Sec. 70.10 to 
clarify the conditions under which sanctions would be applied where a 
State or local program is disapproved or granted interim approval. 
Section 70.10(a)(1) would be revised to be consistent with section 
502(d)(2) of the Act to provide expressly that no sanctions would be 
applied if a State or local agency submits a timely and complete 
program (including one requesting interim approval), to provide that 
``failure to submit'' would apply to the corrective submittal for 
interim approval, and to make other clarifications. A new paragraph 
(a)(2) is proposed to clarify that, for purposes of title V, the 
sanctions under section 179(b)(2) for offsets applies only in 
nonattainment areas. A clarifying addition to existing paragraph 
(a)(2), to be renumbered as paragraph (a)(3), would indicate that a 
Federal program would be required by the later of November 15, 1995, if 
full approval had not been granted by then, or the expiration of an 
interim approval period if EPA had not granted full approval by then.
    b. Rationale for Change.--Sections 502(d)(2), (g), and (i)(1)-(3) 
of the Act address when and how EPA may and shall apply sanctions 
against a permitting authority that does not fulfill part 70 program 
requirements. Part 70 as currently promulgated implements these 
provisions at Sec. 70.10. The EPA believes that revisions to Sec. 70.10 
are needed to clarify EPA's policy for applying sanctions when 
permitting authorities fail to submit part 70 permit programs and when 
EPA disapproves submitted programs. The EPA also believes that 
revisions are needed to clarify how EPA's part 70 sanctions policy 
relates to interim program approvals. Revisions are also needed to 
conform the regulations to the provisions of the Act.
    Section 502(d)(2)(B) of the Act provides that if a permitting 
authority does not submit a permit program meeting the requirements of 
title V, or if EPA disapproves a submitted program, 18 months after the 
date for such submittal or the date of such disapproval, whichever is 
the case, EPA shall apply sanctions under section 179(b) of the Act 
against the permitting authority in the same manner and subject to the 
same deadlines and other conditions as are applicable in the case of a 
determination, disapproval, or finding under section 179(a) of the Act 
(42 U.S.C. 7661a(d)(2)(B)).28 The available sanctions under 
section 179(b) are an EPA-imposed prohibition against the Department of 
Transportation approving certain highway projects or awarding grants 
for certain projects in States under sanctions, and a requirement that 
new or modified sources and emissions units permitted under part D of 
title I achieve a ratio of emissions reductions to increased emissions 
of at least 2 to 1 when complying with the emissions offset 
requirements of section 173 of the Act (42 U.S.C. 7509(b)). In 
addition, section 502(d)(2)(A) provides that in such cases of failure 
to submit and disapproval, EPA may, prior to the expiration of the 18-
month period, apply any of the sanctions under section 179(b) (42 
U.S.C. 7661a(d)(2)(A)). However, section 502(g) of the Act provides 
that for the period of an interim approval of a State or local program, 
the provisions of section 502(d)(2) are suspended, but will again apply 
after the expiration of interim approval (42 U.S.C. 7661a(g)).
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    \2\8Section 179(a) of the Act provides that following certain 
EPA findings of deficiency regarding operating permits program 
submittals, unless such deficiency has been corrected within 18 
months after the finding, disapproval, or determination, one of the 
sanctions referred to in subsection (b) shall apply, as selected by 
the Administrator, until the Administrator determines that the State 
has come into compliance, except that if the Administrator finds a 
lack of good faith, sanctions under both paragraph (1) and paragraph 
(2) of subsection (b) shall apply until the Administrator determines 
that the State has come into compliance. If the Administrator has 
selected one of such sanctions and the deficiency has not been 
corrected within 6 months thereafter, sanctions under both paragraph 
(1) and paragraph (2) of subsection (b) shall apply until the 
Administrator determines that the State has come into compliance.
    (42 U.S.C. 7509(a)). As EPA is doing for purposes of applying 
sanctions for State failures under title I of the Act (59 FR 39832, 
August 4, 1994). EPA intends through a separate rulemaking to select 
a default sequence for the application of title V sanctions so that 
mandatory sanctions would apply automatically upon expiration of the 
18-month clock without the need for further rulemaking. Like the 
title I selection of sanctions rule, the title V selection of 
sanctions rule would also address what is required to stop a 
sanctions clock once started, and what is required to lift 
sanctions. The EPA intends to promulgate this separate rule before 
the first date on which mandatory sanctions could possibly be 
required (i.e., before May 15, 1995).
---------------------------------------------------------------------------

    In implementing section 502(d)(2), part 70 currently provides that 
EPA's discretionary sanctions authority and mandatory sanctions 
obligations arise [i]f a State fails to submit a fully-approvable whole 
part 70 program, or a required revision thereto, in conformance with 
the provisions of Sec. 70.4, or if an interim approval expires and the 
Administrator has not approved a whole part 70 program.
    (40 CFR 70.10(a)(1)). The EPA is concerned that this language needs 
additional clarification to explain which situations trigger EPA's 
sanctions authority and obligations under sections 502(d)(2) and (g) of 
the Act.
    For example, the language does not explicitly provide that a 
failure to submit a complete permit program would be treated as an 
absolute failure to submit, for sanctions purposes. Nor does the 
language explicitly state that no sanctions authority arises and no 
sanctions clock starts if a permitting authority submits a timely and 
complete program for interim approval. Moreover, the language does not 
explicitly indicate that if a permitting authority granted interim 
approval fails to submit a corrective program as required by Sec. 70.4, 
the EPA's sanctions authority would arise and the 18-month mandatory 
sanctions clock would start for that permitting authority. Finally, the 
language does not clearly state that separate sanctions authority 
arises and a separate sanctions clock starts when EPA disapproves a 
submitted program that had been initially found complete.
    The proposed revisions to Sec. 70.10(a)(1) are intended to remedy 
the existing rule's lack of clarity on these and other points. First, 
in part 70, EPA indicated that before proceeding to evaluate submitted 
operating permits programs, EPA would within 60 days of receipt of a 
submittal determine whether it is complete enough to warrant review by 
EPA for approval (40 CFR 70.4(e)(1)). To ensure that permitting 
authorities could not avoid the risk of sanctions merely by submitting 
permit programs that are so incomplete that EPA would not be able to go 
forward to evaluate the program, EPA believes it is reasonable to treat 
a failure to submit a complete program as an absolute failure to 
submit, such that the 18-month sanctions clock would run from the date 
the complete submittal was due. The EPA believes that the statutory 
language of title V is amenable to this approach, as section 502(d)(1) 
requires permitting authorities to submit permit programs ``meeting the 
requirements of this title'' (42 U.S.C. 7661a(d)(1)), and section 
502(d)(2) bases EPA's sanctions authority on a permitting authority's 
failure to ``* * * submit a program as required by paragraph (1)'' (42 
U.S.C. 7661a(d)(2) (A) and (B)). This language does not speak directly 
to whether a permitting authority's failure to submit a complete 
program necessarily constitutes an absolute failure to submit. 
Consequently, it is within EPA's discretion to interpret the general 
language of section 502(d) in fashioning the most reasonable sanctions 
policy (see Chevron U.S.A. Inc. v. Natural Resources Defense Council, 
467 U.S. 837 (1984)). To give full effect to the deterrent functions of 
the sanctions provisions of title V, and to achieve consistency with 
EPA's sanctions policy under title I of the Act, EPA believes that it 
is necessary to treat failures to submit complete programs as absolute 
failures to submit, so that permitting authorities cannot avoid the 
risk of sanctions by submitting programs that are so incomplete that 
EPA could not evaluate whether they are approvable.
    The EPA believes that the phrase ``in conformance with the 
provisions of Sec. 70.4'' in Sec. 70.10(a)(1) already provides that, to 
avoid sanctions, a permitting authority must submit a program that EPA 
finds complete, since the criteria for determining whether a permit 
program is complete can be found in Sec. 70.4(b). If a State or local 
program submittal fails to address any of the elements listed in 
Sec. 70.4(b), such as evidence that regulations comprising the program 
were lawfully adopted through proper State or local procedures, it 
would be incomplete. However, as long as the submittal addresses all of 
the Sec. 70.4(b) elements, even if it does so inadequately such that 
the program was not approvable, it would be found complete. To better 
link the submittal of an incomplete program with section 502(d)(2) 
sanctions authority, the proposed revisions to Sec. 70.10(a)(1) would 
explicitly state that a failure to submit a complete program triggers a 
permitting authority's risk of falling subject to sanctions. This will 
make EPA's sanctions policy under title V more consistent with the 
Agency's title I sanctions policy under which failure to submit a 
complete SIP is treated as a failure starting the sanctions clock (see 
section 179(a)(1) of the Act, 42 U.S.C. 7509(a)(1)).
    Second, as discussed above, section 502(g) of the Act requires that 
during the period of interim approval of an operating permits program, 
EPA's authority to apply sanctions in that State or local area of 
jurisdiction shall be suspended (42 U.S.C. 7661a(g)). The EPA believes 
that section 502(g)'s suspension of sanctions authority during interim 
approval periods requires that section 502(d)(2) be interpreted to not 
provide EPA with authority to apply discretionary sanctions and to not 
start an 18-month mandatory sanctions clock when a permitting authority 
makes a timely and complete submittal of an interim permit program. 
Otherwise, a permitting authority would be faced with uncertainty as to 
whether it was at risk of being subject to sanctions unless and until 
EPA takes final action to grant the program interim approval. The EPA 
does not believe that Congress intended for a permitting authority's 
potential sanctions liability to depend on the expeditiousness with 
which EPA grants interim approval of a complete and timely submittal 
for interim approval. Consequently, to give full effect to the 
suspension required by section 502(g), EPA would not apply 
discretionary sanctions or start the 18-month mandatory sanctions clock 
in such situations.
    The EPA believes that Sec. 70.10(a)(1) is unclear in addressing 
this issue, in providing that EPA's sanctions authority arises whenever 
a permitting authority ``* * * fails to submit a fully approvable whole 
part 70 program * * * or if an interim approval expires and the 
Administrator has not approved a whole part 70 program'' (40 CFR 
70.10(a)(1) (emphasis added)). Read literally, the provision might be 
interpreted to mean that if either condition is present, a permitting 
authority would be subject to risk of sanctions. This result would 
clearly conflict with the provisions of section 502(g) of the Act, 
since a failure to submit a fully approvable whole program would result 
in sanctions notwithstanding the permitting authority having received 
interim approval. Moreover, Sec. 70.10(a)(1) does not explicitly state 
when a permitting authority whose program was granted interim approval 
would have become free from the risk of sanctions. To remedy this 
unclarity, the proposed revisions to Sec. 70.10(a)(1) would explicitly 
provide that EPA's sanctions authority would not arise where a 
permitting authority submits a timely and complete interim part 70 
program.
    Third, section 502(g) of the Act provides that no interim approval 
may last longer than 2 years, may not be renewed, and that a permitting 
authority whose program is granted interim approval must make changes 
specified by EPA before the program may receive full approval (42 
U.S.C. 7661a(g)). In part 70, EPA provided that a permitting authority 
whose program is granted interim approval must submit such changes to 
the program addressing the deficiencies specified in the interim 
approval no later than 6 months prior to the expiration of the interim 
approval (40 CFR 70.4(f)(2)). The EPA also provided that if a 
permitting authority fails to submit a required revision to a part 70 
program, EPA's sanctions authority would arise (40 CFR 70.10(a)(1)). 
However, the phrase ``or a required revision thereto'' in 
Sec. 70.10(a)(1) follows the phrase ``fully-approvable whole part 70 
program,'' and thus does not clearly state that if a permitting 
authority fails to submit a required revision to a program granted 
interim approval the permitting authority would be at risk of sanctions 
(Id). Consequently, Sec. 70.10(a)(1) might be read to effectively 
render the program correction submittal requirement under section 
502(g) of the Act and Sec. 70.4(f)(2) nugatory. This result is not what 
EPA intended in promulgating part 70. To remedy this problem, the 
proposed revisions to Sec. 70.10(a)(1) would, consistent with section 
502(g) of the Act and Sec. 70.4(f)(2), explicitly provide that if a 
permitting authority whose program was granted interim approval failed 
to submit a timely revision to correct the deficiencies identified in 
the interim approval, EPA's sanctions authority would arise. The EPA 
believes that section 502(g) provides the authority to treat the 
submittal of such a corrective program as a required submittal under 
section 502(d)(1) of the Act that could start an 18-month sanctions 
clock upon failure to submit by the permitting authority. Otherwise, 
permitting authorities whose programs are granted interim approval and 
who never submit corrective programs would not be at risk of sanctions, 
unless and until they subsequently abdicated their responsibilities to 
administer and enforce permit programs. This result would be unfair to 
permitting authorities that had, for example, initially been granted 
interim approval, then submitted corrective programs that EPA 
disapproved, and became subject to sanctions as a result of the 
disapproval.
    Fourth, section 502(d)(2) of the Act clearly indicates that even if 
a permitting authority submits a part 70 program, if EPA disapproves 
the submittal, the permitting authority may become subject to sanctions 
(42 U.S.C. 7661a(d)(2) (A) and (B)). In such situations, EPA would be 
authorized to impose discretionary sanctions at any time, and would be 
required to impose mandatory sanctions after 18 months. Part 70 does 
explicitly indicate that 18 months after the date of disapproval of a 
State or local operating permits program EPA will apply sanctions (40 
CFR 70.10(a)(1)(ii)), but is unclear whether EPA could impose 
discretionary sanctions following disapproval but before expiration of 
the 18-month clock. In order to remedy this unclarity and more clearly 
implement section 502(d)(2)(A) of the Act, the proposed revisions to 
part 70 would explicitly provide that separate discretionary and 
mandatory sanctions authority would arise in all cases where EPA 
disapproves a submitted operating permits program.
    Fifth, section 502(d)(2)(C) of the Act provides that the 2-to-1 NSR 
offset sanction under section 179(b)(2) of the Act shall not apply in 
any area unless the failure to submit or the disapproval referred to in 
section 502(d)(2) (A) or (B) relates to an air pollutant for which the 
area has been designated a nonattainment area as defined in part D of 
title I of the Act (42 U.S.C. 7661a(d)(2)(C)). Part 70 does not 
currently implement this section of the Act. The proposed revisions to 
Sec. 70.10(a)(2) would explicitly provide for this limitation on EPA's 
sanctions authority. As a result, consistent with Congress' intent, for 
a State or local agency without areas designated as nonattainment that 
became subject to sanctions under title V, the 2-to-1 offset sanction 
would not be applied.
    Finally, section 502(d)(3) of the Act provides that if a program 
meeting the requirements of title V has not been approved in whole for 
any State, the Administrator shall, by November 15, 1995, promulgate, 
administer, and enforce a program under title V for that State (42 
U.S.C. 7661a(d)(3)). However, section 502(g) provides that during an 
interim approval period, the obligation of the Administrator to 
promulgate a Federal program for a State is suspended, and does not 
arise until after the expiration of such interim approval (42 U.S.C. 
7661a(g)). In implementing title V, part 70 provided that ``[i]f full 
approval of a whole part 70 program has not taken place * * *'' by 
November 15, 1995, ``* * * the Administrator will promulgate, 
administer, and enforce a whole or a partial program as appropriate for 
such State * * *'' (40 CFR 70.10(a)(2)). The EPA believes that this 
regulatory language does not give full effect to the Act, particularly 
to section 502(g). To be more consistent with the Act, the proposed 
revisions to Sec. 70.10(a)(3) would clarify that EPA's duty to 
implement a Federal permit program would be suspended during periods of 
interim approval and not arise until the end of the interim approval 
period if EPA had not granted the program full approval by then.

J. Section 70.11--Requirements for Enforcement Authority

    Section 70.11 requires that State and local operating permits 
programs provide for civil penalties to be recoverable in a maximum 
amount of not less than $10,000 per day per violation and does not 
allow mental state as an element of proof. The revision proposed to 
Sec. 70.11(a)(3)(i) clarifies that, provided the permitting authority 
demonstrates that it has the civil penalty authority to recover up to 
$10,000 per day for each violation on a strict liability basis, the 
permitting authority is not precluded from having additional civil 
penalty authority that imposes mental state as an element of proof. 
However, to be approvable by EPA, it must be demonstrated that as a 
matter of State or local law any element of mental state required for 
proof of a violation would not apply to the authority to impose civil 
penalties up to a maximum of $10,000 per day for each violation.

V. Decision-Making Flow Charts

A. Flow Chart for Changes Subject to Major NSR

1. Explanation
    The questions in this flow chart are ordered to determine (1) if 
the change qualifies as a merged program change eligible for 
administrative amendment procedures, and (2) if the change does not 
qualify as a merged program change, whether it qualifies for minor 
permit revision procedures. Note that this flow chart does not include 
questions to determine whether the change requires any permit revision 
at all, because major new source review virtually always yields 
additional applicable requirements. It is consequently a foregone 
conclusion that a change subject to major new source review will 
require a permit revision to update the permit.
    The flow chart also does not include questions to determine whether 
the change may be operated immediately, because changes subject to 
major NSR by definition involve an emissions increase. In today's 
notice, EPA is proposing off-permit treatment for only changes that do 
not increase emissions.
    Finally, it is unnecessary for this flow chart to include questions 
regarding whether the change involves netting, since the change will 
necessarily undergo a 30-day comment period as a result of being 
subject to major NSR. The netting-related gatekeepers for the more 
streamlined permit revision procedures allow any netting transaction to 
be processed using streamlined procedures so long as a 30-day comment 
period was provided for the netting transaction.
2. Flow Chart
    a. Did the change undergo a merged major NSR/part 70 process (i.e., 
one that (1) addressed both major NSR and part 70 permit application 
and content requirements, (2) provided prior notice to EPA and affected 
States, and (3) provided a 30-day comment period and, in the case of 
PSD NSR, an opportunity for a public hearing)?

--If yes, process as an administrative amendment that is subject to the 
procedures for ``merged program'' changes.
--If no, go to b.

    b. Does the change require a revision of a part 70 permit limit 
established solely through part 70 procedures?

--If yes, process as a significant permit revision.
--If no, go to c.

    c. Is the source in compliance with the permit terms it seeks to 
change?

--If yes, process as a minor permit revision;
--If no, process as a significant permit revision.

B. Flow Chart for Changes Subject to Minor NSR

1. Explanation
    The questions in this flow chart are ordered to determine (1) if 
the change may be operated immediately, (2) if the change requires any 
permit revision at all, (3) for a change that requires a permit 
revision, whether it qualifies for administrative amendment procedures 
as a merged program change, (4) for a change that does not qualify for 
administrative amendment procedures, whether it qualifies for de 
minimis revision procedures, and (5) for a change that does not qualify 
for de minimis revision procedures, whether it qualifies for minor 
permit revision procedures.
2. Flow Chart
    a. Can the source operate the change and still comply with all of 
its existing permit terms?

--If yes, go to b.
--If no, go to c.

    b. Does the change render the source subject to an applicable 
requirement to which it was not previously subject (i.e., a new minor 
NSR permit term)?

--If yes, go to c.
--If no, the change can be operated immediately and does not require a 
permit revision, unless the change decreases allowable emissions and 
the source wants to earn emission reduction credits, in which case go 
to question 3 of the flow chart for changes that decrease emissions.

    c. Does the change increase emissions of regulated pollutants?

--If yes, go to d.
--If no, the source can operate the change immediately, but it must 
apply for a permit revision within six months of commencing operation 
of the change; to determine what permit revision procedures to use, 
follow the rest of this flow chart.

    d. Did the change undergo a merged minor NSR preconstruction/part 
70 process (i.e., one that (1) addressed both minor NSR and part 70 
permit application and content requirements, (2) provided prior notice 
to the public, EPA and affected States, and (3) provided a public 
comment period of 30 days (or no less than 15 days\29\ in the case of 
minor NSR programs that provided no less than 15 days as of 11/15/93))?
---------------------------------------------------------------------------

    \29\If the change involves a netting transaction that includes 
any single increase that is greater than applicable major 
modification significance levels or a sum of increases that is 
greater than applicable major source thresholds, it must have 
undergone a preconstruction review process that provided a public 
comment period of at least 30 days to be processed as an 
administrative amendment.

--If yes, process as an administrative amendment that is subject to the 
procedures for ``merged program'' changes.
--If no, go to e.

    e. Does the change require a revision of a part 70 permit limit 
established solely through part 70 procedures?

--If yes, process as a significant permit revision.
--If no, go to f.

    f. Is the source in compliance with the permit terms it seeks to 
change?

--If yes, go to g.
--If no, process as a significant permit revision.

    g. Is the change to a new or existing unit that both before and 
after the change emits at no more than the applicable unit-based de 
minimis level?

--If yes, go to k.
--If no, go to h.

    h. Does the change increase a unit's emissions by no more than 
increment-based de minimis amounts?

--If yes, go to i.
--If no, go to l.

    i. Is the resulting emission limit expressed in the same form and 
unit of measure as the previous limit?

--If yes, go to j.
--If no, go to l.

    j. Does the change require a change in the operating parameters or 
other monitoring, recordkeeping or reporting requirements prescribed by 
the permit that has not been pre-authorized?

--If yes, go to l.
--If no, go to k.

    k. Does the existing permit allow for the type of change to be made 
through de minimis procedures?

--If yes, process as a de minimis permit revision;
--In no, go to l.

    l. Does the change involve a netting transaction for which a 30-day 
public comment period was not provided?
--If yes, go to m;
--If no, process as a minor permit revision.

    m. Did the netting transaction include any single increase that is 
greater than the applicable major modification significance level or a 
sum of increases that is greater than the applicable major source 
thresholds?

--If yes, process as a significant permit revision;
--If no, process as a minor permit revision.

C. Flow Chart for Section 112(g) Modifications30
---------------------------------------------------------------------------

    \3\0A 112(g) modification is a physical or operational change at 
a major source that increases actual emissions of a HAP by more than 
a de minimis amount, or results in emission of more than a de 
minimis amount of a HAP not previously emitted, and which is not 
offset by an equal or greater decrease in emissions of another HAP 
that is deemed more hazardous.
---------------------------------------------------------------------------

1. Explanation
    The questions in this flow chart are ordered to determine (1) if 
the change qualifies as a merged program change eligible for 
administrative amendment procedures, and (2) if the change does not 
qualify as a merged program change, whether it qualifies for minor 
permit revisions procedures. Note that this flow chart does not include 
questions to determine whether the change requires any permit revision 
at all, because a modification as defined by section 112(g) will always 
render the source subject to a new applicable requirement under that 
subsection. It is consequently a foregone conclusion that a section 
112(g) modification will require a permit revision to update the 
permit.
    The flow chart also does not include questions to determine whether 
the change may be operated immediately, because section 112(g) 
modifications by definition involve an emissions increase that is not 
offset by an emissions decrease. In today's notice, EPA is proposing 
off-permit treatment for only changes that do not increase emissions.
    Finally, the flow chart does not include questions regarding 
whether the change involves netting, since section 112(g) defines 
modifications subject to that subsection in terms of whether the 
changes increases emissions on net, and the proposed section 112(g) 
preconstruction review procedures take into account the fact that 
netting calculations may be involved.
2. Flow Chart
    a. Did the modification undergo a merged 112(g) preconstruction 
review/part 70 process (i.e., one that (1) addressed both section 
112(g) modification and part 70 permit application and content 
requirements, (2) provided prior notice to EPA and affected States and 
(3) provided a 45-day public comment period)?

--If yes, process as an administrative amendment that is subject to the 
procedures for ``merged program'' changes.

--If no, go to b.

    b. Does the change require a revision of a part 70 permit limit 
established solely through part 70 procedures?

--If yes, process as a significant permit revisions.
--If no, go to c.

    c. Is the source in compliance with the permit terms it seeks to 
change?

--If yes, process as a minor permit revision.
--If no, process as a significant permit revision.

VI. Administrative Requirements

A. Public Hearing

    One public hearing will be held to discuss the proposed regulatory 
revisions as indicated in the DATES section of this preamble. Persons 
wishing to make oral presentations at the public hearing should contact 
EPA at the address given in the ADDRESSES section of this preamble. If 
necessary, oral presentations will be limited to 15 minutes each. Any 
member of the public may file a written statement with EPA before, 
during, or within 30 days after the hearing. Written statements should 
be addressed to the Air Docket address given in the ADDRESSES section 
of this preamble.
    A verbatim transcript of the public hearing and written statements 
will be available for public inspection and copying during normal 
working hours at EPA's Air Docket in Washington, DC (see ADDRESSES 
section of this preamble).

B. Docket

    The docket for this regulatory action is A-93-50. 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 (except for interagency 
review materials) (307(d)(7)(A)). The docket is available for public 
inspection at EPA's Air Docket, which is listed under the ADDRESSES 
section of this notice.

C. Office of Management and Budget (OMB) Review

    Under Executive Order 12866 (E.O. 12866) (58 FR 51735 (October 4, 
1993)), section 4(c), EPA is required for significant regulatory 
actions to prepare an assessment of the potential costs and benefits 
(referred to as a Regulatory Impact Analysis (RIA)) of the regulatory 
action. Sections 3(f) (1-4) of E.O. 12866 define ``significant'' 
regulatory actions as those that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, 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,31 or the principles set 
forth in E.O. 12866.
---------------------------------------------------------------------------

    \3\1These priorities include economic growth while maintaining 
environmental quality, provide opportunities for domestic and 
international competitiveness, mitigate the impact of regulations on 
the innovation and dissemination of environmental technologies, and 
empower minority and poor communities in accordance with the 
Administration's primary goal for environmental equity.
---------------------------------------------------------------------------

    Pursuant to the terms of Executive Order 12866, OMB and EPA 
consider this a ``significant regulatory action'' within the meaning of 
the Executive Order. The EPA has submitted this action to OMB for 
review. Changes made in response to OMB suggestions or recommendations 
will be documented in the public record. Any written comments from OMB 
to EPA, and any EPA responses to those comments, will be included in 
Docket A-93-50.
    To facilitate OMB review of this proposed rulemaking, EPA has 
prepared an analysis showing the marginal impacts of the proposed 
revisions to part 70. The Agency is also in the process of updating the 
current Information Collection request for part 70 and will, at that 
time, conduct a comprehensive analysis of the regulatory revisions 
proposed herein.
    After review of the current RIA for part 70, (EPA-450/2-91-011), 
the Agency has determined that the effect of the changes to part 70 
resulting from today's action will be more than $70 million per year 
when compared to the current ICR approved by OMB. However, the 
revisions that are included in this action would, primarily through the 
revised permit revision process, result in a net decreased impact of 
$268 million per year when compared to a baseline of original rule 
costs which is adjusted to account for the Agency's revised definition 
of title I modification.32
---------------------------------------------------------------------------

    \3\2The baseline for purposes of assessing whether a significant 
impact would occur is the impact level defined in the RIA and ICR. 
The EPA believes that this baseline should be adjusted to reflect 
the effect of precluding the availability of off-permit status to 
minor NSR actions since as title I modifications they would not 
qualify for such treatment. The increased costs associated with the 
adjustment are principally those relating to accomplishing permit 
revisions before renewal of the permit. While OMB has not approved 
this adjustment in baseline costs, EPA believes that the current ICR 
is understated without including this effect.
---------------------------------------------------------------------------

D. Regulatory Flexibility Act Compliance

    Under the Regulatory Flexibility Act, whenever an Agency publishes 
any proposed or final rule in the Federal Register, it must prepare a 
Regulatory Flexibility Analysis (RFA) that describes the impact of the 
rule on small entities (i.e., small businesses, organizations, and 
governmental jurisdictions).
    The EPA has established guidelines which require an RFA to 
accompany a rulemaking package. For any rule subject to the Regulatory 
Flexibility Act, the Agency's new policy requires a regulatory 
flexibility analysis if the rule will have any economic impact, however 
small, on any small entities that are subject to the rule, even though 
the Agency may not be legally required to do so.
    A regulatory flexibility screening analysis of the impacts of the 
original part 70 rules revealed that the original rule did not have a 
significant and disproportionate adverse impact on small entities. The 
resulting administrative costs of today's proposal affect larger part 
70 sources which are not typically believed to be small business 
entities. Consequently, the Administrator certifies that the proposed 
revisions to part 70 will not have a significant and disproportionate 
impact on small entities. The EPA, however, solicits any information or 
data which might affect this proposed certification. The EPA will 
reexamine this issue and perform any subsequent analysis deemed 
necessary. Any subsequent analysis will be available in the docket and 
taken into account before promulgation.

E. Paperwork Reduction Act

    The Information Collection Request (ICR) requirements for the part 
70 regulations were submitted for approval to OMB under the Paperwork 
Reduction Act, 44 U.S.C. 3501 et seq. The ICR was prepared by EPA in 
association with the promulgation of part 70 and a copy may be obtained 
from Sandy Farmer, Information Policy Branch (mail code 2136), U.S. 
Environmental Protection Agency, 401 M St. SW., Washington, DC 20460, 
(202) 260-2740.
    The screening analysis done for the original ICR for part 70 
indicated the paperwork burden imposed by the rulemaking was not 
substantial. The screening analysis for the revisions to part 70 
indicates a need to revise that estimate. However, since the original 
ICR for part 70 must be revised anyway before it expires in June 1995, 
the ICR analysis of today's proposed revisions to part 70 does not 
supersede or replace the up-date of the original part 70 ICR. Instead, 
the Administrator proposes to revise formally the ICR for the entire 
part 70 rule in the June 1995 up-date.
    Send comments regarding the burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden by October 28, 1994 to: Chief, Information Policy Branch (2136), 
U.S. Environmental Protection Agency, 401 M Street, SW., Washington, DC 
20460; and to the Office of Information and Regulatory Affairs, Office 
of Management and Budget, Washington, DC 20503, marked ``Attention: 
Desk Officer for EPA.'' The final rule revisions will respond to any 
OMB or public comments on the information collection requirements 
contained in this proposal.

List of Subjects in 40 CFR Part 70

    Environmental protection, Air pollution control, Prevention of 
significant deterioration, New source review, Fugitive emissions, 
Particulate matter, Volatile organic compounds, Nitrogen dioxide, 
Carbon monoxide, Hydrocarbons, Lead, Operating permits.

    Dated: July 8, 1994.
Carol M. Browner,
Administrator.
    For the reasons set out in the preamble, part 70 of title 40, 
chapter I of the Code of Federal Regulations is proposed to be amended 
as set forth below.

    (Note: Material enclosed by double parentheses and designated as 
``Option'' sets forth alternative proposal regarding revision of 
permit terms that prescribe monitoring or recordkeeping procedures)

PART 70--STATE OPERATING PERMIT PROGRAMS

    1. The authority cite for part 70 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

    2. Section 70.2 is amended as follows:
    a. The definition of Affected States is amended by replacing the 
word ``modification'' with ``revision'';
    b. The definition of Applicable requirement is amended by 
redesignating paragraphs (2) through (12) as (3) through (13), adding a 
new paragraph (2), and revising the newly redesignated paragraph (12);
    c. The definition of Draft permit is amended by revising the cite 
``70.7(h)'' to read ``70.7'';
    d. The definition of The EPA or the Administrator is revised;
    e. The definition of Major new source review is added after the 
definition of ``General permit'';
    f. The definition of Major source is amended by revising the first 
paragraph; by revising the first sentence in paragraph (1)(i) and 
revising paragraph (2) introductory text and (2)(xxvii);
    g. The definition of Minor new source review is added after the 
definition of Major source;
    h. The definitions of Permit modification and Section 502(b)(10) 
changes are removed;
    i. The definition of Permit revision is revised;
    j. The definition of Potential to emit is amended by adding the 
phrase ``and citizens under the Act'' to the end of the second 
sentence;
    k. The definition of Responsible official is amended by revising 
paragraphs (4) (i) and (ii);
    l. The definition of Title I modification is added after the 
definition of Stationery source.
    Additions and revisions to the section are set out to read as 
follows:


Sec. 70.2  Definitions.

* * * * *
    Applicable requirement * * *
    (2) Any requirement enforceable by the Administrator and by 
citizens under the Act that limits emissions for purposes of creating 
offset credits or for complying with or avoiding applicability of 
applicable requirements;
* * * * *
    (12) Any standard or other requirement of the regulations 
promulgated to protect stratospheric ozone under sections 608 or 609 of 
title VI of the Act, unless the Administrator has determined that such 
requirements need not be contained in a part 70 permit, and any 
standard or other requirement under any other section(s) of title VI of 
the Act that the Administrator determines should be contained in a 
title V permit;
* * * * *
    The EPA or the Administrator means the Administrator of the EPA or 
his or her designee.
* * * * *
    Major new source review (major NSR) means a title I program 
contained in an EPA-approved or promulgated implementation plan for the 
preconstruction review of changes which are subject to review as new 
major stationary sources or major modifications under EPA regulations 
implementing parts C or D of title I of the Act.
    Major source means any stationary source or group of stationary 
sources as described in paragraphs (1), (2), and (3) of this 
definition. For purposes of paragraphs (2) and (3), major stationary 
source includes any group of stationary sources that are located on one 
or more contiguous or adjacent properties, and are under common control 
of the same person (or persons under common control) belonging to a 
single major industrial grouping. For the purposes of defining ``major 
source'' in paragraphs (2) or (3) of this definition, a stationary 
source or group of stationary sources shall be considered part of a 
single industrial grouping if all of the pollutant emitting activities 
at such source or group of sources on contiguous or adjacent properties 
belong to the same Major Group (i.e., all have the same two-digit code) 
as described in the Standard Industrial Classification Manual, 1987. In 
addition, for purposes of paragraphs (2) and (3) of this definition, 
any stationary source (or group of stationary sources) that supports 
another source, where both are under common control of the same person 
(or persons under common control) and on contiguous or adjacent 
properties, shall be considered a support facility and part of the same 
source regardless of the 2-digit SIC code for that support facility. A 
stationary source (or group of stationary sources) is considered a 
support facility to a source if at least 50 percent of the output of 
the support facility is dedicated to the source.
    (1) * * *
    (i) For pollutants other than radionuclides, any stationary source 
or group of stationary sources located within a contiguous area and 
under common control that emits or has the potential to emit, in the 
aggregate, 10 tons per year (tpy) or more of any hazardous air 
pollutant (HAP) (including any fugitive emissions of such pollutant) 
which has been listed pursuant to section 112(b) of the Act, 25 tpy or 
more of any combination of such hazardous air pollutants (including any 
fugitive emissions of such pollutants) or such lesser quantity as the 
Administrator may establish by rule. * * *
* * * * *
    (2) A major stationary source of air pollutants or any group of 
stationary sources, as defined in section 302 of the Act, that directly 
emits, or has the potential to emit, 100 tpy or more of any air 
pollutant (including any fugitive emissions of any such pollutant, as 
determined by rule by the Administrator). The fugitive emissions of a 
stationary source shall not be considered in determining whether it is 
a major stationary source for the purposes of section 302(j) of the Act 
or for the purposes of paragraph (3) of this definition, unless the 
source belongs to one of the following categories of stationary source:
* * * * *
    (xxvii) All other stationary source categories regulated by a 
standard promulgated as of August 7, 1980, under section 111 or 112 of 
the Act, but only with respect to those air pollutants that have been 
regulated for that category.
* * * * *
    Minor new source review (minor NSR) means a title I program 
approved by EPA into a State's implementation plan under EPA 
regulations implementing section 110(a)(2) of title I of the Act for 
the preconstruction review of changes which are subject to review as 
new or modified sources and which do not qualify as new major 
stationary sources or major modifications under EPA regulations 
implementing parts C or D of title I of the Act.
* * * * *
    Permit revision means any de minimis permit revision, minor permit 
revision, significant permit revision, or administrative permit 
amendment.
* * * * *
    Responsible official * * *
* * * * *
    (4) * * *
    (i) The designated representative for all actions, standards, 
requirements, or prohibitions under title IV of the Act or the 
regulations promulgated thereunder; or
    (ii) The designated representative or a person meeting provisions 
of paragraphs (1), (2), or (3) of this definition for any other 
purposes under part 70.
* * * * *
    Title I modification or modification under any provision of title I 
of the Act means any modification under parts C and D of title I or 
sections 110(a)(2), 111(a)(4), 112(a)(5), or 112(g) of the Act; under 
regulations promulgated by EPA thereunder or in Sec. 61.07 of part 61 
of this chapter; or under State regulations approved by EPA to meet 
such requirements.
* * * * *
    3. Section 70.3 is amended by revising paragraphs (a)(1) through 
(a)(3); by redesignating paragraphs (a)(4) and (a)(5) as (a)(5) and 
(a)(6) respectively; by adding a new paragraph (a)(4); and by revising 
paragraph (b)(2) to read as follows:


Sec. 70.3  Applicability.

     (a) * * *
    (1) Any major source, except that a source is not required to 
obtain a permit if it would be classified as a major source solely 
because it has the potential to emit major amounts of a pollutant 
listed pursuant to section 112(r)(3) of the Act and is not otherwise 
required to obtain a permit under this part;
    (2) Any source, including an area source (i.e., a nonmajor source), 
subject to a standard, limitation, or other requirement under section 
111 of the Act;
    (3) Any source, including an area source (i.e., a nonmajor source), 
subject to a standard or other requirement under section 112 of the 
Act, except that a source is not required to obtain a permit solely 
because it is subject to regulations or requirements under section 
112(r) of the Act;
    (4) Any source required to have a permit under parts C or D of 
title I of the Act;
* * * * *
    (b) * * *
    (2) In the case of nonmajor sources subject to a standard or other 
requirement under either section 111 or section 112 of the Act 
promulgated after July 21, 1992, the Administrator will determine 
whether to exempt any or all such sources from the requirement to 
obtain a part 70 permit at the time that the new standard is 
promulgated.
* * * * *
    4. Section 70.4 is amended by:
    a. Revising paragraphs (a) and (b)(3)(x);
    b. Removing the last sentence from paragraph (b)(3)(xi);
    c. Amending paragraph (b)(3)(xii) by replacing ``90'' in the first 
and third sentences with ``125'';
    d. Amending paragraph (b)(11)(iii) by replacing ``9'' with ``12'';
    e. Revising paragraphs (b)(12) through (14), (h), (i) introductory 
text and (i)(1);
    f. Removing paragraph (b)(15) and redesignating paragraph (b)(16) 
as (b)(15);
    g. Redesignating paragraphs (j) and (k) as (k) and (l), 
respectively; and by adding a new paragraph (j).
    Additions and revisions are set out to read as follows:


Sec. 70.4  State program submittals and transition.

    (a) Date for submittal. Not later than November 15, 1993, the 
Governor of each State shall submit to the Administrator for approval a 
proposed part 70 program, under State law or under an interstate 
compact, meeting the requirements.
    (b) * * *
    (3) * * *
    (x) Provide an opportunity for judicial review in State court of 
the final permit action by the applicant, any person who participated 
in the applicable public participation process provided pursuant to 
Sec. 70.7 and any other person who could obtain judicial review of such 
actions under State laws.
* * * * *
    (12) Provisions consistent with paragraphs (b)(12) (i) and (ii) of 
this section to allow changes within a permitted facility without 
requiring a permit revision, if the changes are not modifications under 
any provision of title I of the Act and the changes do not exceed the 
emissions allowable under the permit (whether expressed therein as a 
rate of emissions or in terms of total emissions): Provided that the 
facility provides the Administrator and the permitting authority with 
written notification as required below in advance of the proposed 
changes, which shall be a minimum of 7 days, unless the permitting 
authority provides in its regulations a different time frame for 
emergencies. The source, permitting authority, and EPA shall attach 
each such notice to their copy of the relevant permit. The following 
provisions implement this requirement of an approvable part 70 permit 
program:
    (i) Trading under permitted emissions caps. The program shall 
require the permitting authority to include in a permit an emissions 
cap, pursuant to a request submitted by the applicant, consistent with 
any specific emission limits or restrictions otherwise required in the 
permit by any applicable requirements, and permit terms and conditions 
for emissions trading solely for the purposes of complying with that 
cap, provided that the permitting authority finds that the request 
contains adequate terms and conditions, including all terms required 
under Sec. 70.6 (a) and (c), to determine compliance with the cap and 
with any emissions trading provisions. The permit shall also contain 
terms and conditions to assure compliance with all applicable 
requirements. The permit applicant shall include in its application 
proposed replicable procedures and permit terms that ensure the 
emissions cap is enforceable and trades pursuant to it are quantifiable 
and enforceable. Any permit terms and conditions establishing such a 
cap or allowing such trading may be established or changed only in a 
full permit issuance, renewal, or significant permit revision process. 
The permitting authority shall not be required to include in the cap or 
emissions trading provisions any emissions units where the permitting 
authority determines that the emissions are not quantifiable or where 
it determines that there are no replicable procedures or practical 
means to enforce the emissions trades.
    (A) The written notification required under this paragraph 
(b)(12)(i) shall state when the change will occur and shall describe 
the changes in emissions that will result and how these increases and 
decreases in emissions will comply with the terms and conditions of the 
permit.
    (B) The permit shield described in Sec. 70.6(f) may extend to terms 
and conditions that allow such increases and decreases in emissions.
    (ii) Trading under the implementation plan. The program may provide 
for permitted sources to trade increases and decreases in emissions in 
the permitted facility, where the applicable implementation plan 
provides for such emissions trades without requiring a permit revision 
and based on the 7-day notice prescribed in this paragraph (b)(12)(ii). 
This provision is available in those cases where the permit does not 
already provide for such emissions trading provided the permit 
identifies which permit terms may be replaced with the emissions 
trading provisions in the implementation plan.
    (A) The written notification required under this paragraph 
(b)(12)(ii) shall include such information as may be required by the 
provision in the applicable implementation plan authorizing the 
emissions trade, including at a minimum, when the proposed change will 
occur, a description of each such change, any change in emissions, the 
permit requirements with which the source will comply using the 
emissions trading provisions of the applicable implementation plan, and 
the pollutants emitted subject to the emissions trade. The notice shall 
also refer to the provisions with which the source will comply in the 
applicable implementation plan and that provide for the emissions 
trade.
    (B) The permit shield described in Sec. 70.6(f) shall not extend to 
any change made under this paragraph (b)(12)(ii). Compliance with the 
permit terms that the source will meet using the emissions trade shall 
be determined according to requirements of the applicable 
implementation plan authorizing the emissions trade.
    (13) Provisions for adequate, streamlined, and reasonable 
procedures for expeditious review of permit revisions. The program may 
meet this requirement by using procedures that meet the requirements of 
Sec. 70.7 (d), (e), (f), (g), and (h) or that are substantially 
equivalent to those provided therein.
    (14) If a State allows permittees, without first applying for a 
permit revision, to make changes that do not result in the source being 
in violation of any permit term or condition but render the source 
subject to an applicable requirement to which the source was not 
previously subject, provisions meeting the requirements of paragraphs 
(b)(14) (i) through (vii).
    (i)(A) Each change shall meet all applicable requirements and shall 
not violate or result in the violation of any existing permit term or 
condition.
    (B) Each change shall not result in a net increase in the allowable 
emissions of any regulated air pollutant at the source.
    (C) The change may not be subject to the requirements of title IV 
of the Act.
    (ii) Sources must provide contemporaneous written notice to the 
permitting authority of each such change. Such written notice shall 
describe each such change, the date of the change, any change in 
emissions, pollutants emitted, and the applicable requirement to which 
the source becomes subject as a result of the change.
    (iii) The change shall not be eligible for the permit shield under 
Sec. 70.6(f) until such time as a permit shield may be granted in a 
subsequent permit revision consistent with the provisions of Sec. 70.7 
(g) or (h).
    (iv) The permittee shall keep a record describing changes made 
under this paragraph.
    (v) The permittee shall apply for a permit revision by the deadline 
set forth in Sec. 70.5(a)(1)(ii), except that if the deadline would 
occur after the date on which a renewal application is due, the State 
may allow the permittee to include the permit application with the 
renewal application.
    (vi) The permit shall be revised under the relevant procedures of 
Sec. 70.7 (e), (f), (g) or (h) for which the change is eligible, except 
that, notwithstanding provisions in those sections, if the change is 
processed under minor permit revision or significant permit revision 
procedures, and the permitting authority or EPA determines that the 
change was ineligible under this paragraph, then the source shall be 
liable from the date the change was made for failing to have applied 
for a permit revision before the change was made as required under 
Sec. 70.7.
    (vii) If eligible for the minor permit revision procedures of 
Sec. 70.7(g), the following provisions shall apply to changes made 
under this paragraph.
    (A) The public notice required under Sec. 70.7(g)(3)(ii) shall 
state that if no germane and non-frivolous objection is received within 
21 days of application, the permitting authority may consider that the 
change was eligible for processing under this paragraph without further 
opportunity for public objection. In addition to the provisions of 
Sec. 70.7(g)(3)(ii), a germane objection is one that objects to the 
change on the grounds that the source was ineligible under this 
paragraph.
    (B) The provisions of Sec. 70.7(g)(5) (i) and (ii) prohibiting the 
source from making the change do not apply.
    (C) Notwithstanding the provisions of Sec. 70.7(g)(6), the source 
must comply with all applicable requirements from the date the change 
was made.
* * * * *
    (h) Individual permit transition. Upon approval of a State program, 
the Administrator shall suspend the issuance of Federal permits for 
those activities subject to the approved State program, except that the 
Administrator will continue to issue phase I acid rain permits and, to 
the extent provided in regulations promulgated pursuant to title IV of 
the Act, will issue phase II acid rain permits. After program approval, 
EPA shall retain jurisdiction over any permit (including any general 
permit) that it has issued unless arrangements have been made with the 
State to assume responsibility for these permits. Where EPA retains 
jurisdiction, it will continue to process permit appeals and revision 
requests, to conduct inspections, and to receive and review monitoring 
reports. If any permit appeal or revision request is not finally 
resolved when the federally-issued permit expires, EPA may, with the 
consent of the State, retain jurisdiction until the matter is resolved. 
Upon request by a State, the Administrator may delegate authority to 
implement all or part of a permit issued by EPA, if a part 70 program 
has been approved for the State. The delegation may include 
authorization for the State to collect appropriate fees, consistent 
with Sec. 70.9.
    (i) Program revisions. Either EPA or a State with an approved 
program may initiate a program revision. Program revision may be 
necessary when the relevant Federal or State statutes or regulations, 
including part 70, are revised, modified, or supplemented. The State 
shall keep EPA apprised of any proposed modifications to its basic 
statutory or regulatory authority or procedures. If the Administrator 
determines pursuant to Sec. 70.10 that a State is not adequately 
administering the requirements of this part, or that the State's permit 
program is inadequate in any other way, the State shall revise the 
program or its means of implementation to correct the inadequacy.
    (1) If the program or the means of implementing it must be revised, 
fully adopted program revisions shall be submitted to the Administrator 
in accordance with the following timeframes, which will commence upon 
promulgation of revised requirements under title V of the Act or upon a 
finding by the Administrator of inadequate program administration:
    (i) Within 180 days if no new statutory authority or regulatory 
revisions are necessary;
    (ii) Within 12 months if no new statutory authority is needed but 
regulatory revisions are necessary;
    (iii) Within 2 years if new statutory authority is needed; or
    (iv) Notwithstanding paragraphs (i)(1)(i) through (iii) of this 
section, any other time period that the Administrator determines is 
appropriate to allow for program revision.
* * * * *
    (j) Savings provision. Any operating permits program developed and 
submitted to the Administrator for approval prior to [DATE 6 MONTHS 
AFTER PUBLICATION OF FINAL RULE] must meet the applicable criteria 
contained in part 70 as in effect on July 21, 1992 to receive EPA 
approval. Notwithstanding the preceding sentence, the Administrator may 
review portions or the entirety of such program submittals upon request 
of the permitting authority, and will review the entirety of all later 
submittals, on the basis of the criteria in part 70 as in effect at the 
time of the submittal.
* * * * *
    5. Section 70.5 is amended by:
    a. Revising paragraph (a)(1)(ii);
    b. Redesignating paragraphs (a)(1)(iii) and (a)(1)(iv) as 
(a)(1)(iv) and (a)(1)(v) respectively, adding a new paragraph 
(a)(1)(iii), and revising the newly redesignated paragraph (a)(1)(v);
    c. Revising the second sentence in paragraph (a)(2);
    d. Adding a new sentence to paragraph (c) introductory text after 
the fifth sentence in that paragraph;
    e. Redesignating paragraphs (c)(8), (c)(9), and (c)(10) as 
paragraphs (c)(9), (c)(10), and (c)(11) respectively and adding a new 
paragraph (c)(8).
    Additions and revisions are set out to read as follows:


Sec. 70.5  Permit applications.

    (a) * * *
    (1) * * *
    (ii) For purposes of changes eligible under Sec. 70.4(b)(14), a 
timely application is one that is submitted not later than 6 months 
after the notice required under Sec. 70.4(b)(14)(ii).
    (iii) For purposes of permit revisions other than changes eligible 
under Sec. 70.4(b)(14), a timely application is one that is submitted 
by the relevant deadlines set forth in Secs. 70.7(e), (f), (g), or (h).
* * * * *
    (v) Applications for initial phase II acid rain permits shall be 
submitted to the permitting authority by January 1, 1996 for sulfur 
dioxide, and by January 1, 1998 for nitrogen oxides or by such other 
deadlines established under title IV of the Act and the regulations 
promulgated thereunder.
    (2) * * * To be found complete, an application must provide all 
information required pursuant to paragraph (c) of this section 
sufficient to allow the permitting authority to begin processing the 
application, except that applications for permit revision need supply 
such information only if it is related to the proposed change. * * *
* * * * *
    (c) * * * No activity or emissions unit of a source may be exempted 
when determining whether a source is major. * * *
* * * * *
    (8) Identification of those emissions units eligible for emissions 
trading under Sec. 70.6(a)(10) and those emissions units at which 
changes may be processed under de minimis permit revision procedures 
contained in Sec. 70.7(f) of this part.
    6. Section 70.6 is amended by:
    a. Revising paragraphs (a)(3)(ii) introductory text, 
(a)(3)(iii)(B), (a)(4) introductory text, (a)(8), (a)(9)(i), (a)(10) 
introductory text, (c)(1), (d)(2), and (f)(3)(i);
    b. Adding a new paragraph (d)(3);
    c. Amending paragraphs (a)(1)(iii), (a)(6)(i), and (a)(6)(iii) by 
replacing the word ``modification'' with ``revision'';
    d. Amending paragraph (a)(4)(ii) by replacing the word ``source'' 
with ``unit'';
    e. Amending paragraphs (c)(3) and (c)(4) by revising references to 
``Sec. 70.5(c)(8)'' to read ``Sec. 70.5(c)(9)'';
    f. Amending paragraph (d)(1) by revising references to 
``Sec. 70.7(h)'' to read ``Sec. 70.7(k).''
    The additions and revisions read as follows:


Sec. 70.6  Permit content.

    (a) * * *
    (3) * * *
    (ii) With respect to recordkeeping, the permit shall incorporate 
all applicable recordkeeping requirements and require the following:
* * * * *
    (iii) * * *
    (B) Prompt reporting of deviations from permit requirements, 
including those attributable to upset conditions, the probable cause of 
such deviations, and any corrective actions or preventive measures 
taken. The permitting authority shall define ``prompt'' in its part 70 
program regulations for each situation which is not already defined in 
the underlying applicable requirement, and do so in relation to the 
degree and type of deviation likely to occur and the applicable 
requirements. Upset conditions shall be defined in the permit.
    (4) For affected sources, a permit condition prohibiting any 
affected unit from emitting SO2 in excess of any allowances that 
the affected unit lawfully holds under title IV of the Act or the 
regulations promulgated thereunder.
* * * * *
    (8) Emissions trading. A provision stating that no permit revision 
shall be required, under any economic incentives, marketable permits, 
emissions trading and other similar programs or processes approved in 
an implementation plan or other applicable requirement authorizing such 
changes to be provided for in the permit and where the permit provides 
for such changes.
    (9) * * *
    (i) Shall require the source, contemporaneously with making a 
change from one operating scenario to another, to record in a log at 
the permitted facility a record of the scenario under which it is 
operating. Provided that each of the alternative scenarios available 
for a particular unit is monitored in a way that yields objective, 
contemporaneous measurement and recordation of relevant emissions or 
parameters and that the means of measurement are sufficiently different 
for each of the scenarios that the contemporaneous record reveals the 
scenario under which the source was operating when the record was made, 
no further notice to the permitting authority is required. Otherwise, 
the permit shall require that when any change is made between 
alternative scenarios, the permittee at the beginning of the following 
week shall place in regular mail to the permitting authority notice of 
such change(s) between scenarios, which could consist of a copy of the 
relevant portion of the on-site log indicating the scenario(s) under 
which the source operated during the previous week;
* * * * *
    (10) Terms and conditions, if the permit applicant requests them, 
for the trading of emissions increases and decreases in the permitted 
facility, to the extent that the applicable requirements provide for 
trading such increases and decreases without a case-by-case approval of 
any emissions trade. Such terms and conditions:
* * * * *
    (c) * * *
    (1) Consistent with paragraph (a)(3) of this section, testing, 
monitoring, recordkeeping, reporting, and compliance certification 
requirements sufficient to assure compliance with the terms and 
conditions of the permit. Any document (including reports) required to 
be submitted by a part 70 permit shall contain a certification by a 
responsible official that meets the requirements of Sec. 70.5(d).
* * * * *
    (d) * * *
    (2) Part 70 sources that would qualify for a general permit must 
apply to the permitting authority for coverage under the terms of the 
general permit or must apply for a part 70 permit consistent with 
Sec. 70.5. The permitting authority may, in the general permit, provide 
for applications which deviate from the requirements of Sec. 70.5, 
provided that such applications meet the requirements of title V of the 
Act, and include all information necessary to determine qualification 
for, and to assure compliance with, the general permit. Without 
repeating the public participation procedures required under 
Sec. 70.7(k), the permitting authority may grant a source's request for 
authorization to operate under a general permit, and such a grant shall 
be a final permit action for purposes of judicial review.
    (3) The permitting authority shall provide timely notice to the 
public of any authorization given to a source to operate under the 
terms of a general permit. Such notice may be made on a monthly, 
summarized basis covering all sources receiving authorization since the 
time of the last notice.
* * * * *
    (f) * * *
    (3) * * *
    (i) The provisions of sections 112(r)(9) and 303 of the Act 
(emergency orders), including the authority of the Administrator under 
those sections;
* * * * *
    7. Section 70.7 is amended by:
    a. Revising paragraphs (a)(1) introductory text, (a)(1)(i), 
(a)(1)(ii), (a)(1)(iv), (a)(1)(v), (a)(2), and (a)(4);
    b. Adding a new paragraph (a)(7);
    c. Revising paragraph (b);
    d. Redesignating paragraphs (f), (g), and (h) as paragraphs (i), 
(j), and (k);
    e. Redesignating paragraph (e)(2) as a new paragraph (g) and 
revising it, and redesignating paragraph (e)(4) as paragraph (h) 
introductory text, and paragraphs (e)(4) (i) and (ii) as paragraphs 
(h)(1) and (h)(2);
    f. Removing paragraphs (e) introductory text and (e) (1) and (3); 
redesignating paragraph (d) as paragraph (e) and revising it;
    g. Adding new paragraphs (d) and (f)
    h. Revising newly redesignated paragraph (h)(1), and amending newly 
redesignated paragraph (h)(2) by revising the word ``modifications'' to 
read ``revisions'';
    k. Revising the newly redesignated paragraphs (i)(2) and (i)(3);
    l. Amending the newly redesignated paragraph (j)(1) by replacing 
the citation ``paragraph (f)'' to read ``paragraph (i)'';
    m. Amending the newly redesignated paragraph (j)(5) introductory 
text by revising the citations to ``paragraph (g)(2)'' and ``paragraph 
(g)(4)'' to read ``paragraph (j)(2)'' and ``paragraph (j)(4)'' 
respectively;
    n. Amending the newly redesignated paragraph (j)(5)(i) by revising 
the citation ``paragraphs (g) (1) through (4)'' to read ``paragraphs 
(j) (1) through (4)'';
    o. Revising the newly redesignated paragraph (k) introductory text;
    p. Amending the newly redesignated paragraph (k)(2) by revising the 
word ``modification'' to read ``revision'';
    q. Amending the newly redesignated paragraph (k)(5) by adding the 
words ``or her'' after the words ``the Administrator may fulfill his''.
    The additions and revisions read as follows:


Sec. 70.7  Permit issuance, renewal, reopenings, and revisions.

    (a) Action on Application. (1) A permit, permit revision, or 
renewal may be issued only if all of the following conditions have been 
met:
    (i) The permitting authority has received a complete application 
for a permit, permit revision, or permit renewal, except that a 
complete application need not be received before issuance of a general 
permit under Sec. 70.6(d) of this part;
    (ii) The permitting authority has complied with the applicable 
requirements for public participation under this section;
* * * * *
    (iv) Except as provided in paragraph (a)(7) of this section, the 
conditions of the permit provide for compliance with all applicable 
requirements and the requirements of this part; and
    (v) Except for revisions qualifying for de minimis permit revision 
procedures under paragraph (f) of this section or for administrative 
amendment procedures under paragraphs (e)(1) (i) through (v) of this 
section, the Administrator has received a copy of the proposed permit 
and any notices required under Sec. 70.8 (a) and (b), and has not 
objected to issuance of the permit under Sec. 70.8(c) within the time 
period specified therein.
    (2) Except as provided under the initial transition plan provided 
for under Sec. 70.4(b)(11) or under regulations promulgated under title 
IV or title V of the Act for the permitting of affected sources under 
the acid rain program, the program shall provide that the permitting 
authority take final action on each permit application (including a 
request for permit revision or renewal) within 18 months, or such 
lesser time approved by the Administrator, after receiving a complete 
application. However, the permitting authority shall take final action 
within 12 months on any complete permit application containing an early 
reductions demonstration.
* * * * *
    (4) The permitting authority shall promptly provide notice to the 
applicant of whether the application is complete. Unless the permitting 
authority requests additional information or otherwise notifies the 
applicant of incompleteness within 60 days of receipt of an 
application, the application shall be deemed complete. For revisions 
that qualify for and are processed through the procedures of paragraphs 
(e), (f), or (g) of this section, the State program need not require a 
completeness determination.
* * * * *
    (7) Any new applicable requirement approved or promulgated by EPA 
that becomes applicable to a source prior to issuance of a draft permit 
(whether during issuance or renewal) shall be included in the draft 
permit. If any new applicable requirement becomes applicable after 
issuance of a draft permit, and the requirement is not reflected in the 
draft permit, the permit may be issued without incorporating the new 
applicable requirement, provided that the permitting authority 
institutes proceedings no later than the date of permit issuance to 
reopen the permit consistent with paragraph (i) of this section to 
incorporate the new applicable requirement and that the permit contains 
a statement that it is being reopened for this purpose.
    (b) Requirement for a permit. Except as provided in the following 
sentence and paragraphs (e), (f), and (g) of this section, no part 70 
source may operate after the time that it is required to submit a 
timely and complete application under an approved permit program, 
except in compliance with a permit issued under a part 70 program.
* * * * *
    (d) Permit revisions. Changes requiring a revision of a part 70 
permit are those that could not be operated without violating an 
existing permit term or rendering the source subject to an applicable 
requirement to which the source has not been previously subject. The 
State shall provide adequate, streamlined, and reasonable procedures 
for expeditiously processing permit revisions. The State may meet this 
obligation by adopting the procedures set forth in paragraphs (e), (f), 
(g), and (h) of this section and in Sec. 70.4(b)(14) or ones 
substantially equivalent. The State may also develop different 
procedures for different types of revisions depending on the 
significance and complexity of the requested revision, but EPA will not 
approve a part 70 program that has permit revision procedures that 
provide for less permitting authority, EPA, or affected State review or 
public participation than is provided for in this part. A permit 
revision for purposes of the acid rain portion of the permit shall be 
governed by regulations promulgated under title IV of the Act.
    (e) Administrative permit amendments.--(1) An ``administrative 
permit amendment'' is a permit revision that:
    (i) Corrects typographical errors;
    (ii) Identifies a change in the name, address, or phone number of 
any person identified in the permit, or provides a similar minor 
administrative change;
    (iii) Requires more frequent testing, monitoring, recordkeeping, or 
reporting;
    (iv) Allows for a change in ownership or operational control of a 
source where the permitting authority determines that no other change 
in the permit is necessary, provided that a written agreement 
containing a specific date for transfer of permit responsibility, 
coverage and liability between the current and new permittee has been 
submitted to the permitting authority;
    (v) Incorporates any other type of change which the Administrator 
has determined as part of the approved part 70 program to be similar to 
those in paragraphs (e)(1)(i) through (iv) of this section;
    (vi) Incorporates the requirements of a minor NSR or major NSR 
preconstruction permit or decision or a section 112(g) determination, 
provided that such permit or determination was issued in accordance 
with procedural requirements substantially equivalent to the 
requirements of paragraph (e)(4) of this section and contains 
compliance requirements substantially equivalent to those required 
under Sec. 70.6.
    (vii) Notwithstanding the provisions of paragraph (e)(1)(vi) of 
this section, incorporates a standard promulgated after permit issuance 
pursuant to section 112 of the Act.
    (2) Administrative permit amendments for purposes of the acid rain 
portion of the permit shall be governed by regulations promulgated 
under title IV of the Act.
    (3) Administrative permit amendment procedures for changes meeting 
the criteria under Sec. 70.7(e)(1)(i) through (v). Changes meeting the 
criteria set forth in paragraphs (e)(1)(i) through (v) of this section 
may be made to a permit using the following procedures:
    (i) The source shall submit to the permitting authority an 
application containing a proposed addendum to the source's part 70 
permit. The application shall demonstrate how the proposed change meets 
one of the criteria for administrative amendments set forth in 
paragraphs (e)(1)(i) through (v) of this section, and include 
certification by the responsible official consistent with Sec. 70.5(d) 
of this part that the change is eligible for administrative amendment 
procedures. The addendum shall:
    (A) Identify the terms of the existing part 70 permit that it 
proposes to change;
    (B) Propose new permit terms consistent with the provisions of this 
part applicable to the change;
    (C) Designate the addendum as having been processed under the 
procedures of this paragraph; and
    (D) Specify that the addendum will be effective 60 days from the 
date of permitting authority receipt unless the permitting authority 
disapproves the change within such period.
    (ii) The permitting authority may allow the source to implement the 
requested change immediately upon making all required submittals, 
including the proposed addendum.
    (iii) The proposed addendum may become effective 60 days after the 
permitting authority receives the submittal, provided the permitting 
authority has not disapproved the request in writing before the end of 
the 60-day period. The permitting authority shall record the change by 
attaching a copy of the addendum to the existing part 70 permit and 
shall provide the Administrator with a copy of the addendum.
    (iv) If the permitting authority disapproves the change, it shall 
notify the source of its reasons for disapproving the change in a 
timely manner. Upon receiving such notice, the source shall comply with 
the terms of the permit that it had proposed to change, and thereafter 
the proposed addendum shall not take effect. The permitting authority 
may approve a permit addendum for an administrative permit amendment 
that varies from the source's application without rendering the source 
liable for violating its existing permit if the permitting authority's 
revisions are not necessary to make the request eligible for 
administrative amendment procedures and do not change the applicant's 
proposed determination of which applicable requirements of the Act 
apply to the source as a result of the requested change and if the 
source demonstrates to the satisfaction of the permitting authority its 
compliance with the applicable requirement to which it is subject as a 
result of the change. However, the source would remain liable for any 
violations of the requirements which are applicable as a result of the 
change and the source's proposed permit revision.
    (v) The process in paragraph (e)(3) of this section may also be 
used for changes initiated by the permitting authority that meet the 
criteria under paragraphs (e)(1)(i), (ii), and (iv) of this section. 
For such changes, the permitting authority shall notify the source of 
the proposed change and its effective date, and shall attach a copy of 
the change to the existing permit. On the effective date of the 
proposed change, the source shall comply with the provisions of the 
proposed change.
    (vi) The permit shield under Sec. 70.6(f) of this part may not 
extend to administrative amendments processed under this paragraph 
(e)(3).
    (4) Administrative amendment procedures for changes meeting the 
criteria under Sec. 70.7(e)(1)(vi). A change meeting the criteria of 
Sec. 70.7(e)(1)(vi) may be made to a permit using the procedures in the 
following paragraphs (e)(4)(i) through (v) of this section.
    (i) An applicant shall submit prior to construction (including 
modification), a permit application meeting the requirements for 
applications of minor NSR, major NSR, section 112(g) determinations 
under the Act, and paragraph (e)(3)(i) of this section. The application 
must:
    (A) Specify draft permit terms governing construction of any 
proposed new or modified emissions unit or combination thereof, 
including all applicable requirements;
    (B) Inform the permitting authority that the source is requesting 
to modify the part 70 permit using the process under this paragraph;
    (C) Include a proposed addendum to the part 70 permit that 
identifies the terms of the existing part 70 permit that will change 
and the draft terms and conditions which will govern operation of the 
new or modified unit consistent with part 70 (including compliance 
requirements consistent with Sec. 70.6) and any notice requirements 
contained in paragraph (e)(4)(ii) of this section, and that 
incorporates relevant terms and conditions from the proposed minor NSR 
or major NSR or section 112(g) action.
    (D) Include an affidavit signed by a responsible official stating 
that the source accepts all liability of making the requested change 
prior to final permitting authority action to revise the source's 
permit.
    (ii) For any minor NSR or major NSR or section 112(g) action and 
part 70 permit addendum proposed for approval under this paragraph 
(e)(4), the permitting authority shall:
    (A) Provide a comment period for the public and affected States 
prior to construction of the change of at least 30 days or, in the case 
of minor NSR, as many days as required by the approved implementation 
plan as of November 15, 1993, but not less than 15 days. Where a minor 
NSR action includes a netting transaction involving either a single 
emissions increase above applicable title I modification significance 
levels or a sum of increases above applicable major source thresholds, 
a public comment period of at least 30 days must be provided for a 
change to qualify for processing under this paragraph;
    (B) Provide notice and a copy of the application filed pursuant to 
paragraph (e)(4)(i) of this section to EPA by the beginning of the 
public comment period;
    (C) Issue a minor NSR or major NSR permit or determination or issue 
a section 112(g) determination and an addendum to the part 70 permit 
for the operation of the change if it determines the requirements of 
the applicable minor NSR, major NSR, or section 112(g) review program 
and part 70 have been met; and
    (D) Provide an opportunity for EPA objection consistent with the 
provisions of Sec. 70.8(c), starting either upon receipt of the notice 
described under paragraphs (e)(4)(ii)(D) (1) or (2) of this section as 
applicable or from the date the permitting authority made its final 
minor NSR, major NSR, or section 112(g) determination, whichever is 
later.
    (1) For changes approved by the permitting authority under major 
NSR or section 112(g) review, the source shall provide a notice to EPA 
and the permitting authority which must be postmarked at least 21 days 
before the anticipated date of initial startup of the new or modified 
source. For such changes, the source may commence operation at the end 
of the 21-day period, unless EPA objects in writing to the proposed 
change within the 21-day period. Upon notification of such objection, 
the source may not operate such a change and must comply with the terms 
and conditions of the permit that it sought to change.
    (2) For changes approved by the permitting authority under minor 
NSR, the source shall notify EPA and the permitting authority of the 
anticipated date for startup of the change. The source may commence 
operation of such a change upon postmark of such notice.
    (iii) The proposed part 70 permit addendum may become effective 45 
days after EPA receives notice under paragraph (e)(4)(ii)(D) of this 
section or 45 days from the date the permitting authority makes its 
final preconstruction determination, whichever is later, provided that 
by the end of such period EPA has not objected to the change.
    (iv) If EPA objects to the change, EPA shall notify the permitting 
authority and the source of its reasons for objecting to the change. 
Upon receiving such notice, the source shall comply with the terms of 
the permit that it had proposed to change, and thereafter the proposed 
addendum shall not take effect. If, subsequent to source implementation 
of the requested change, EPA objects to the change, the source shall be 
liable for having operated in violation of its existing permit from the 
time it implemented the change. Notwithstanding the preceding sentence, 
the permitting authority may revise a proposed addendum making an 
administrative permit amendment in response to an EPA objection without 
rendering the source liable for violating its existing permit if the 
permitting authority's revisions are not necessary to make the change 
eligible for administrative amendment procedures and do not change the 
applicant's proposed determination of which applicable requirements 
apply to the source as a result of the requested change and if the 
source demonstrates to the satisfaction of the permitting authority its 
compliance with the applicable requirement to which it is subject as a 
result of the change. However, the source would remain liable for any 
violations of the requirements which are applicable as a result of the 
change and the source's proposed permit revision.
    (v) The permitting authority may provide a permit shield consistent 
with the provisions of Sec. 70.6(f).
    (5) Administrative permit amendment procedures for changes meeting 
the criteria under Sec. 70.7(e)(1)(vii). Changes meeting the criteria 
set forth in paragraphs (e)(1)(vii) of this section may be made to a 
permit using the following procedures:
    (i) After receipt of the initial notification required under the 
section 112 standard, the permitting authority shall prepare a proposed 
addendum to the source's part 70 permit. The addendum shall contain the 
following:
    (A) A statement that the section 112 standard is an applicable 
requirement for the permitted source.
    (B) A schedule of compliance, consistent with Sec. 70.5(c)(9).
    (C) A requirement to submit any implementation plan or report 
required under the standard.
    (D) A requirement to apply for a minor permit revision by the 
deadline for the compliance statement, unless the source is exempted 
from this requirement by the rulemaking promulgating the applicable 
section 112 standard. If the source is utilizing an alternative 
requiring case-by-case approval, such as emissions averaging, the 
source shall apply for a significant permit revision in lieu of the 
minor permit revision required in the preceding sentence. If the 
compliance statement deadline is within 6 months of the end of the 
permit term, the source may incorporate its application for the 
revisions into its application for permit renewal, in lieu of applying 
for revisions by the compliance statement deadline.
    (E) Any other provisions required to be incorporated into the 
permit by the applicable section 112 standard.
    (ii) The permitting authority shall make available for public 
review and comment for at least 30 days a list of sources whose permits 
are reopened under this paragraph. Notice of the availability of the 
list shall be given by such time as to assure that any additional 
administrative amendments for sources subject to the standard and not 
on the list take effect within 18 months after promulgation of the 
section 112 standard. If after considering public comment, the 
permitting authority determines that permits for other sources must be 
reopened to incorporate section 112 standards, it shall notify such 
sources of its intent to do so at least 30 days before reopening the 
permit, and may use the provisions of this paragraph.
    (iii) The proposed addendum shall become effective not later than 
18 months after promulgation of the section 112 standard. The 
permitting authority shall attach a copy of the addendum to the 
existing part 70 permit and shall provide the Administrator with a 
copy.
    (iv) The permitting authority shall, as soon as practicable, place 
all information required to be submitted by the permit with respect to 
the section 112 standard in a docket accessible to the public.
    (v) The permit shield under Sec. 70.6(f) of this part may not 
extend to administrative amendments processed under this paragraph 
(e)(5).
    (f) De minimis permit revisions. (1) A de minimis permit revision 
may be made by the permitting authority to a part 70 permit provided 
that the permit contains a term or condition authorizing the source to 
make use of de minimis permit revision procedures for qualifying 
changes at the applicable unit and such term or condition was 
established during permit issuance or renewal, or under permit revision 
procedures contained in paragraph (h) of this section, and provided the 
action taken meets the criteria and procedures specified in this 
paragraph (f).
    (2) Criteria. For the change to be considered eligible for de 
minimis permit revision procedures, the conditions in paragraph 
(f)(2)(i) of this section and the applicable conditions and limits in 
paragraphs (f)(2) (ii) and (iii) of this section must be met. The 
limits in paragraphs (f)(2) (ii) and (iii) of this section are on a 
single pollutant basis except where a combination of hazardous air 
pollutants is indicated.
    (i) Conditions limiting de minimis changes. (A) The source must not 
be in violation of the part 70 permit terms and conditions it seeks to 
change.
    (B) In the case of existing units, the need for a permit revision 
must result from a physical or operational change. (OPTION: ADD TO END 
OF SENTENCE: , unless the permit revision solely involves monitoring or 
recordkeeping requirements.)
    (C) (OPTION: ADD TO BEGINNING OF SENTENCE: Except for permit 
revisions solely involving monitoring or recordkeeping requirements,) 
The change may not involve a permit term or condition established to 
limit emissions which is federally enforceable only as a part 70 permit 
term or condition.
    (D) De minimis emission threshold levels cannot be met by 
offsetting emission increases with emission decreases at the same 
source.
    (OPTION: ADD NEW PARAGRAPHS (f)(2)(i) (E) and (F): (E) The change 
may not involve a change to monitoring or recordkeeping requirements 
unless, prior to the source's submission of a de minimis permit 
revision application, the permitting authority affirmatively determines 
that the monitoring or recordkeeping change has been demonstrated by 
the source:
    (1) To not affect the capability of the method to measure emission 
results as precisely, accurately, and timely as is provided by the 
existing monitoring or recordkeeping method;
    (2) To only affect a single source or facility; and
    (3) To not constitute a new or alternative monitoring method or 
represent a new operating level of the method.
    (F) The criteria for all demonstrations required under paragraph 
(f)(2)(i)(E) of this section shall include, in addition to the 
requirements of paragraph (f)(3)(i)(C) of this section, an analysis 
conducted in accordance with 40 CFR 64.4(b)(5) and 64.4(c) utilizing 
appendices A, B, C and D, and related appendices' procedures of 40 CFR 
part 64.))
    (ii) Unit-based change limits. For a change at any emissions unit 
to qualify as a unit-based de minimis permit revision, the total 
emissions of an entirely new unit and the total emissions at an 
existing unit after the change (i.e., the sum of the existing emissions 
before the change plus the emissions increase that results from the 
change) may not exceed:
    (A) For criteria pollutants:
     ALTERNATIVE 1:
    The following emissions over the life of the permit:
    (1) 4 tons of CO;
    (2) ton of NOX;
    (3) 1.6 tons of SO2;
    (4) .6 tons of PM-10;
    (5) 1 ton of VOC;
    ALTERNATIVE 2:
    20% of the applicable major source threshold, or 5 tpy of VOC or 
NOx, whichever is greater, but in no event no more than 15 tpy PM-
10 or 0.6 tpy lead;
    ALTERNATIVE 3:
    5 tpy;
    ALTERNATIVE 4:
    30% of the applicable major source threshold or 5 tpy, whichever is 
greater;
    OR
    A unit size established by a State for use within that State, where 
the State can show that, of the estimated annual emissions of units 
subject to minor and major NSR in the State, 80% or more of the 
emissions of those units would be from units above that level.
    (B) For HAP's:
    ALTERNATIVE 1:
    0 tpy.
    ALTERNATIVE 2:
    20% of the section 112 major source thresholds or 50% of the 
section 112(g) de minimis levels, whichever is less.
    ALTERNATIVE 3:
    75% of section 112(g) de minimis levels.
    (C) For other pollutants regulated only under section 111 of the 
Act, the significance levels in Sec. 52.21(b)(23)(i) of part 52 of this 
chapter.
    (iii) Increment-based change limits. A change at any emissions unit 
not qualifying for a unit-based change may still qualify as a de 
minimis permit revision if the following criteria are met:
    (A) Additional conditions: (1) Any resulting emissions limit must 
be expressed in the same form and units of measure as the previous 
emissions limit;
    (2) Any associated re-calibration of continuous emissions monitors 
(CEM) or operational parameters must be undertaken in accordance with 
emission rates-to-CEM or operational parameter ratios established in 
the operating permit program, in the source's permit, or through permit 
issuance procedures providing at least as much permitting authority, 
EPA, and affected State review and public participation as minor permit 
revision procedures; (OPTION: DELETE PREVIOUS PARAGRAPH (f)(2)(iii) (A) 
(2).)
    (B) Size restrictions on individual change. No emissions increase 
at any unit may exceed:
    (1) For criteria pollutants:
    ALTERNATIVE 1:
    The following emissions over the life of the permit:
    (1) 4 tons of CO;
    (2) 1 ton of NOX;
    (3) 1.6 tons of SO2;
    (4) .6 tons of PM-10;
    (5) 1 ton of VOC;
    ALTERNATIVE 2:
    20% of the applicable major source threshold, 10% of the limit 
applicable to the unit undergoing the change, or 15 tpy VOC or 
NOX, whichever is less but in no event less than (2-5) tpy VOC or 
NOX or greater than 15 tpy PM-10 or 0.6 tpy lead;
    ALTERNATIVE 3:
    30% of applicable major source thresholds, or 15% of the limit 
applicable to the unit undergoing the change, whichever is less, but in 
no event less than 5 tpy for VOC or NOX;
    OR
    A specified incremental amount established by a State for use 
within that State, where the State can show that, of the estimated 
annual emissions increases subject to minor and major NSR in the State, 
80% or more would be above that level.
    (2) For HAP's:
    ALTERNATIVE 1:
    0 tpy.
    ALTERNATIVE 2:
    20% of the section 112 major source thresholds, 50% of the de 
minimis levels set pursuant to section 112(g) of the Act, or 10% of the 
limit applicable to the unit undergoing change, whichever is less.
    ALTERNATIVE 3:
    75% of section 112(g) de minimis levels.
    (3) For other pollutants regulated only under section 111 of the 
Act, the significance levels in Sec. 52.21(b)(23)(i) of part 52 of this 
chapter.
    (3) De minimis permit revision procedures. (i) Application. A 
source may submit an application to the permitting authority requesting 
the use of de minimis permit revision procedures provided that the 
permit contains a term or condition that authorizes the source to make 
use of the de minimis permit revision procedures for qualifying 
changes, the application meets the requirements of Sec. 70.5(c) of this 
part, and the permit application includes the following:
    (A) A description of the change, the emissions resulting from the 
change, and any new applicable requirements that will apply if the 
change occurs;
    (B) An addendum containing the terms and conditions of the source's 
suggested draft permit revision;
    (C) A demonstration that the proposed change meets the criteria for 
a de minimis permit revision; and
    (D) Certification by a responsible official consistent with 
Sec. 70.5(c) of this part that:
    (1) The source is in compliance with any permit terms or conditions 
it seeks to modify;
    (2) The proposed modification meets the criteria for use of de 
minimis permit revision procedures; and
    (3) The source accepts all liability of making the requested change 
prior to final permitting authority action to revise the source's 
permit.
    (OPTION: ADD NEW PARAGRAPH: (E) A summary of any required 
demonstration performed in accordance with paragraphs (f)(2)(i) (E) and 
(F) of this section, and verification of such demonstration's 
affirmative approval by the permitting authority.)
    (ii) The permitting authority may allow the source to implement the 
requested change 7 days after the permitting authority's receipt of the 
source's de minimis permit revision application. At its discretion, the 
permitting authority may grant a request by the source to implement the 
change after less than 7 days.
    (iii) Public notification. Public notice shall be given of de 
minimis permit revision applications received by the permitting 
authority on a monthly, batched basis. (OPTION: ADD TO END OF 
PARAGRAPH: In addition, for permit revisions involving changes to 
monitoring or recordkeeping requirements, the permitting authority 
shall also submit to the publicly available docket the complete 
demonstration required by paragraphs (f)(2)(i) (E) and (F) of this 
section, a summary of the demonstration, and an affirmative statement 
of the demonstration's adequacy.)
    (iv) Permit amendment. The permit is revised by attaching the 
proposed addendum to the permit with the addendum specifying when the 
permit revision takes effect consistent with the following provisions.
    (A) Where the permitting authority affirmatively approved the 
change pursuant to a preconstruction review process that included at 
least a 21-day public comment period and the permitting authority 
authorized the change to be made under the de minimis permit revision 
process, the addendum shall take effect upon submission of a complete 
de minimis permit revision application.
    (B) Where the permitting authority did not affirmatively approve 
the change pursuant to a preconstruction review that provided for at 
least a 21-day public comment period, the addendum shall take effect 
(30-90) days after the date public notice was given under paragraph 
(f)(3)(iii) of this section if the permitting authority does not 
disapprove the request within that time period. The permitting 
authority shall retain the authority to disapprove such a change made 
through the de minimis permit revision process for a period of (30-90) 
days following the date public notice was given under paragraph 
(f)(3)(iii) of this section.
    (v) EPA and affected State notification. The permitting authority 
shall send a copy of the addendum to the permit to EPA and any affected 
State within 7 days of the date the addendum takes effect.
    (vi) Public request for disapproval. (A) Within (15-45) days of the 
date public notification was given, any person may request that the 
permitting authority disapprove the change if the permitting authority 
retained authority to disapprove the de minimis permit revision as 
described under paragraph (f)(3)(iv)(B) of this section.
    (B) Where the permitting authority was not required to retain 
authority to disapprove the de minimis permit revision, the public may 
petition the permitting authority to revoke the permit revision 
allowing the change.
    (vii) Petitions to EPA. The public may petition EPA to object to 
the change within 60 days after the end of the (30-90) day disapproval 
period as described in paragraph (f)(3)(iv)(B) of this section where 
the permitting authority does not grant a request to disapprove the 
change.
    (4) Source liability. If, after a source makes the requested 
change, the permitting authority disapproves the change or EPA objects 
to the change, the source shall be liable for having operated in 
violation of its existing permit from the time at which the source made 
the change. Notwithstanding the preceding sentence, the permitting 
authority may issue a permit addendum that varies from the source's 
proposed addendum without rendering the source liable for violating its 
existing permit if the proposed addendum includes enforcement terms 
sufficient to support an enforcement action and the permitting 
authority's revisions are not necessary to make the change eligible for 
de minimis permit revision procedures and do not change the applicant's 
determination of which requirements of the Act apply to the source as a 
result of the requested change. The source would remain liable for any 
violations of the requirements which are applicable as a result of the 
change and the source's proposed permit revision.
    (5) The permit shield under Sec. 70.6(f) may not extend to de 
minimis permit revisions.
    (g) Minor permit revision procedures.
    (1) Criteria.
    (i) Minor permit revision procedures may be used only for those 
permit revisions that:
    (A) Do not affect permit terms or conditions that the source is 
violating.
    (B) Do not involve changes to existing monitoring, reporting, or 
recordkeeping requirements in the permit, unless such changes are 
necessary to implement other changes that qualify for minor permit 
revision procedures;
    (OPTION: REPLACE PARAGRAPH (j)(l)(i)(B) WITH THE FOLLOWING: (B) 
Involve changes to monitoring or recordkeeping requirements that are:
    (1) Changes in the enforceable operating level of the method that, 
prior to the source's submission of a minor permit revision 
application, the permitting authority has affirmatively determined the 
source has demonstrated to be correlated to the source's existing or 
proposed compliance emissions rate, but such changes may not involve a 
switch to a new or alternative monitoring or recordkeeping operating 
parameter;
    (2) Changes to a monitoring or recordkeeping method that affect the 
measurement sensitivity of the method and representativeness of the 
data (e.g., precision, accuracy, measurement location, or averaging 
time) such that there may be a measurable effect in relation to the 
relevant source compliance emissions rate; changes that affect the 
scope and intent of the existing monitoring method (e.g., modified 
sample conditioning system, upgraded detector, upgraded data management 
system); or changes that may be generally applicable to similar 
monitoring methods in the same or other source categories (e.g., 
equipment modification for interference avoidance). Such changes may 
not involve a switch to new or alternative monitoring methods. Prior to 
the source's submission of a minor permit revision application, the 
permitting authority shall have affirmatively determined that the 
monitoring or recordkeeping change has been demonstrated by the source 
to have a known relationship and ability to determine compliance with 
the applicable source compliance emissions rate; or
    (3) Changes to monitoring or recordkeeping methods that have been 
approved pursuant to major or minor NSR and that are demonstrated 
therein to have a known relationship and ability to determine 
compliance with the applicable source compliance emissions rate. The 
application for the minor permit revision must include supporting 
documentation from the major or minor NSR permit approval, information 
regarding the demonstration and approval of the requested monitoring or 
recordkeeping method, and information in accordance with 
Sec. 70.7(g)(2) of this part as related to the monitoring change.)
    (C) Do not involve or depend on netting transactions undertaken to 
avoid being subject to preconstruction review under parts C or D of 
title I of the Act unless such emissions reductions:
    (1) Have been approved pursuant to a minor NSR process for which a 
30-day public comment period was provided; or
    (2) Do not involve any single emissions increase that exceeds the 
applicable threshold for being a major modification under parts C or D 
of title I of the Act, and the sum of all the contemporaneous increases 
does not exceed the applicable threshold for determining whether the 
change is major;
    (D) Do not involve offsets or modifications under section 112(g) of 
the Act, unless the change has been approved pursuant to a section 
112(g) review process;
    (E) Are not modifications subject to parts C or D of title I of the 
Act, unless the change has been approved pursuant to major NSR and 
would incorporate all applicable requirements determined therein into 
the part 70 permit;
    (F) (OPTION: ADD TO BEGINNING OF SENTENCE: Except for permit 
revisions solely involving monitoring or recordkeeping requirements,) 
Do not seek to establish or change a permit term or condition 
established to limit emissions which is federally enforceable only as a 
part 70 permit term or condition. Such terms and conditions include, 
but are not limited to:
    (1) A federally-enforceable emissions cap assumed in the part 70 
permit to avoid classification as a modification under any provision of 
title I of the Act; and
    (2) An alternative emission limit established under the provisions 
of Sec. 70.6(a)(1)(iii) equivalent to a requirement contained in an 
applicable implementation plan.
    (3) An alternative emissions limit established in the part 70 
permit pursuant to regulations promulgated under section 112(i)(5) of 
the Act;
    (4) An emissions limit established in the part 70 permit pursuant 
to regulations promulgated under section 112(j) of the Act; and
    (5) Any other term or condition for which there is no corresponding 
underlying applicable requirement and the establishment of which allows 
the source to avoid an applicable requirement to which the source would 
otherwise be subject.
    (G) Are not required by the State program to be processed as a 
significant permit revision.
    (ii) Notwithstanding paragraph (g)(1)(i) of this section, minor 
permit revision procedures may be used for permit revisions involving 
the use of economic incentives, marketable permits, emissions trading, 
and other similar approaches, to the extent that such minor permit 
revision procedures are explicitly provided for in an applicable 
implementation plan or in applicable requirements promulgated by EPA.
    (OPTION: ADD NEW PARAGRAPH: (iii) Any demonstration required by 
paragraph (g)(1)(i)(B) of this section shall include an analysis 
conducted in accordance with 40 CFR 64.4(b)(5) and 64.4(c) utilizing 
appendices A, B, C, and D and related appendices of 40 CFR part 64.)
    (2) Application. An application requesting the use of minor permit 
revision procedures shall meet the requirements of Sec. 70.5(c) of this 
part and shall include the following:
    (i) A description of the change, the emissions resulting from the 
change, and any new applicable requirements that will apply if the 
change occurs;
    (ii) An addendum containing the terms and conditions of the 
source's suggested draft permit revision;
    (iii) A demonstration that the proposed change is eligible to be 
processed as a minor permit revision;
    (iv) Certification by a responsible official, consistent with 
Sec. 70.5(d) of this part, that:
    (A) The proposed change meets the criteria for use of minor permit 
revision procedures;
    (B) The source is in compliance with the permit terms or conditions 
it seeks to modify;
    (C) Public notice of the proposed revision has been provided 
pursuant to paragraph (g)(3) of this section; and
    (D) Notice to the Administrator and affected States of the proposed 
revision has been provided pursuant to paragraph (g)(4) of this 
section; and
    (v) An affidavit signed by a responsible official stating that the 
source accepts all legal risks of making the requested change prior to 
final permitting authority action to revise the source's permit.
    (OPTION: ADD NEW PARAGRAPH: (vi) For a change involving changes to 
monitoring or recordkeeping requirements, a summary of any 
demonstration required by paragraph (g)(1)(i)(B) and performed in 
accordance with paragraph (g)(1)(iii) of this section and verification 
of its approval by the permitting authority. If in approving the 
demonstration the permitting authority determines that subsequent 
verification testing of the change is necessary, the permitting 
authority may establish a compliance schedule for performing 
verification testing to further demonstrate, consistent with paragraph 
(g)(1)(iii) of this section, the adequacy of the change. Such 
compliance schedule, after approval by the permitting authority, shall 
be attached to the addendum described in paragraph (g)(2)(ii) of this 
section and be processed as a permit term and shall not allow the 
source to begin verification testing in advance of the time when the 
source would be allowed to implement the minor permit revision 
requested change. The approved compliance schedule shall include a 
commitment by the source to provide the results of the verification 
testing to the permitting authority within 90 days of submittal of the 
minor permit revision application. Upon receipt of the verification 
testing results, the permitting authority shall determine whether the 
results demonstrate the adequacy of the change consistent with 
paragraph (g)(1)(iii) of this section. The permitting authority shall 
promptly notify the source in writing of its determination, and place a 
copy of such notice in the public docket. The permit shield under 
section 70.6(f) of this part may extend to minor permit revisions 
involving monitoring or recordkeeping changes only after any required 
further verification testing of the change has been completed.))
    (3) Public notification. (i) Immediately upon filing an application 
for a minor permit revision, the source shall provide notice to the 
public of the requested minor permit revision by:
    (A) Publication of a notice in a newspaper of general circulation 
in the area where the source is located or in a State publication 
designed to give the general public notice; and
    (B) Sending a letter to persons on a mailing list developed by the 
permitting authority, including those who previously participated in 
any public comment process provided for the source's permit and those 
who request to be placed on a list to receive notification of permit 
issuance, revision, reopening, or renewal requests.
    (ii) In addition to the elements required under Sec. 70.7(k)(2) of 
this part, the public notice shall describe the requested change and 
state that if no germane and non-frivolous objection to the requested 
change is received by the permitting authority within 21 days of 
publication of the notice, the source may implement the change without 
the permitting authority providing further opportunity for public 
participation. For purposes of this paragraph, a germane objection is 
one that objects to the use of minor permit revision procedures for the 
requested change on the grounds that the source has failed to comply 
with the procedural and notification requirements of paragraphs (g)(3) 
and (g)(4) of this section or that the requested change is ineligible 
for the use of minor permit revision procedures under paragraph 
(g)(1)(i) of this section. For purposes of this paragraph, a non-
frivolous objection must specify the basis for its objection and 
present factual or other relevant information in support of its 
objection.
    (iii) The permitting authority shall place a copy of the minor 
permit revision request in a public docket. (OPTION: ADD A NEW 
SENTENCE: The permitting authority shall also place in the docket any 
complete demonstration required by Sec. 70.7(g)(1)(i)(B) of this part, 
a summary of the demonstration, the permitting authority's analysis of 
the demonstration, and an affirmative statement of the demonstration's 
adequacy.)
    (4) EPA and affected State notification. Immediately upon filing an 
application for a minor permit revision the source shall notify the 
Administrator and affected States of the requested permit revision in 
the same manner and subject to the same conditions required of 
permitting authorities under Sec. 70.8(a) (1) and (b)(1). Such 
notification shall relieve the permitting authority of the requirement 
to provide notice to the Administrator and affected States of the 
requested minor permit revision under Sec. 70.8 (a)(1) and (b)(1), but 
shall not relieve the permitting authority of the requirement to 
promptly send to the Administrator any notice under Sec. 70.8(b)(2).
    (5) Timetable for issuance. Upon receipt of an application for a 
minor permit revision, the permitting authority shall provide at least 
21 days for public comment on the requested change, and shall keep a 
record of the commenters and the issues raised during the public 
comment period so that the Administrator may fulfill his or her 
obligation under Sec. 70.8(d) to determine whether a citizen petition 
may be granted. Such records shall be made available to the public. The 
minor permit revision shall occur according to the following 
procedures:
    (i) If the permitting authority receives no public objection to the 
requested change within 21 days of publication of the public notice, 
the source may implement the requested change on the 22nd day after 
publication of the public notice, provided that:
    (A) The permitting authority has neither denied the minor permit 
revision application nor determined that the requested revision does 
not meet the minor permit revision criteria and should be reviewed 
under significant permit revision procedures; and
    (B) The Administrator has not objected to the proposed minor permit 
revision.
    (ii) If the permitting authority receives a public objection to the 
requested change within 21 days after publication of the public notice, 
the permitting authority must determine within 28 days of publication 
of the public notice whether the objection is germane and non-
frivolous, and proceed according to the following procedures:
    (A) If the permitting authority within 28 days after public 
notification finds the public objection to be either frivolous or not 
germane, the permitting authority may respond to the public objection 
in the course of processing the minor permit revision request as a 
minor permit revision application, and the source may implement the 
requested change on the 29th day after publication of the public notice 
or upon notification from the permitting authority that the permitting 
authority has determined the public objection to be frivolous or not 
germane, whichever is first, provided that:
    (1) The permitting authority has neither denied the minor permit 
revision application nor determined that the request fails to meet the 
minor permit revision criteria and should be reviewed under significant 
permit revision procedures; and
    (2) The Administrator has not objected to the proposed minor permit 
revision;
    (B) If the permitting authority fails to determine within 28 days 
after publication of the public notice of the request for a minor 
permit revision whether a public objection submitted within 21 days of 
such notice is germane and non-frivolous, the source may implement the 
requested change on the 29th day after publication of the public 
notice, provided that:
    (1) The permitting authority has neither denied the minor permit 
revision application nor determined that the request fails to meet the 
minor permit revision criteria and should be reviewed under significant 
permit revision procedures; or
    (2) The Administrator has not objected to the proposed minor permit 
revision; and
    (C) If the permitting authority finds the public objection to be 
germane and non-frivolous, the permitting authority shall not issue a 
final minor permit revision for the change, and shall either deny the 
minor permit revision application or determine that the requested 
change does not meet the minor permit revision criteria and should be 
reviewed under significant permit revision procedures. If the 
permitting authority continues to process the requested change under 
significant permit revision procedures, public notice of the proposed 
change must be provided in the manner required for significant permit 
revisions under Sec. 70.7(k) of this part. Such notice shall provide at 
least 30 days for public comment on the requested change, shall 
identify the time and place of any hearing that may be held, and shall 
include a statement of procedures to request a hearing if a hearing has 
not already been scheduled. For purposes of this paragraph, such a 
hearing may be held as soon as 14 days after publication of a notice 
that the requested change is being processed as a significant permit 
revision. The source shall not implement the requested change unless 
and until the permitting authority approves it as a significant permit 
revision.
    (iii) Any person who filed a public objection pursuant to this 
paragraph that the permitting authority within 28 days of public 
notification does not determine to be germane and non-frivolous may 
bring suit in State court to compel action by the permitting authority 
and, in accordance with applicable standards for obtaining such relief 
under State law, seek an injunction in State court prohibiting the 
source from implementing the requested change.
    (iv) Where the minor permit revision has not been denied or 
required to be reviewed under significant permit revision procedures, 
the permitting authority may issue a final minor permit revision after 
EPA's 45-day review period has elapsed provided the Administrator has 
not objected to the requested change, or after EPA has notified the 
permitting authority after the close of the public comment period that 
EPA will not object to issuance of the minor permit revision, whichever 
is first, provided that the final minor permit revision does not differ 
from the draft permit except to the extent any changes to the draft 
permit qualify for administrative permit amendment procedures under 
Sec. 70.7(e) of this part.
    (v) Within 60 days after the permitting authority's receipt of an 
application for a minor permit revision or 15 days after the expiration 
of EPA's 45-day review period, whichever is later, the permitting 
authority shall:
    (A) Issue the minor permit revision as proposed;
    (B) Deny the minor permit revision application;
    (C) Determine that the requested revision does not meet the minor 
permit revision criteria and should be reviewed under significant 
permit revision procedures; or
    (D) Revise the draft minor permit revision and, if such revision 
includes any changes that do not qualify for processing as 
administrative permit amendments under Sec. 70.7(e) of this part, 
transmit to the Administrator the new proposed permit revision as 
required by Sec. 70.8(a).
    (vi) Any person who objected to a minor permit revision request 
during the public comment period shall be notified by the permitting 
authority upon final approval of the request. The permitting authority 
shall also place a copy of its final approval decision in the public 
docket in which it places minor permit revision requests when received 
or provide a substantially equivalent means of public access to its 
final decision.
    (6) Source's ability to make change. The State program may allow 
the source to make the change proposed in its minor permit revision 
application in accordance with paragraph (g)(5) of this section. After 
the source makes the change allowed by the preceding sentence, and 
until the permitting authority takes any of the actions specified in 
paragraphs (g)(5)(v)(A) through (D) of this section, the source must 
comply with both the applicable requirements governing the change and 
the proposed permit terms and conditions. During this time period, the 
source need not comply with the existing permit terms and conditions it 
seeks to modify. However, if the source fails to comply with its 
proposed permit terms and conditions during this time period, the 
existing permit terms and conditions it seeks to modify may be enforced 
against it.
    (7) Source liability. If, after a source makes the requested change 
but prior to a permitting authority's final action to approve the 
change and revise the permit, the Administrator objects to the proposed 
minor permit revision or the permitting authority either denies the 
minor permit revision or determines that the requested revision does 
not meet the minor permit revision criteria and should be reviewed 
under significant permit revision procedures, the source shall be 
liable for having operated in violation of its existing permit from the 
time at which it implemented the requested change. Notwithstanding the 
preceding sentence, the permitting authority may issue a permit 
revision that varies from the source's application without rendering 
the source liable for violating its existing permit if the permitting 
authority's revisions are not necessary to make the change eligible for 
minor permit revision procedures and do not change the applicant's 
proposed determination of which requirements of the Act apply to the 
source as a result of the requested change and if the source 
demonstrates to the satisfaction of the permitting authority its 
compliance with the applicable requirement to which it is subject as a 
result of the change. However, the source would remain liable for any 
violations of the requirements of the Act applicable as a result of the 
change and the source's proposed permit revision. (OPTION: ADD NEW 
SENTENCE: If, after the permitting authority's final action to revise 
the permit, any verification testing of the new operating level or 
revised monitoring approach as required by paragraph (g)(2)(vi) 
demonstrates that the new operating level or revised monitoring 
approach fails to demonstrate compliance, the source then shall comply 
with the monitoring and recordkeeping permit terms and conditions that 
applied to the source before the minor permit revision, the minor 
permit revision shall be null and void and cease to have effect, and 
the source shall be liable for operating in violation of its permit 
from the time it implemented the change.)
    (8) Permit shield. The permit shield under Sec. 70.6(f) of this 
part may extend to minor permit revisions, provided that the permitting 
authority has taken final action to issue the minor permit revision as 
a permit revision.
    (h) Significant permit revision procedures.
    (1) Criteria. Significant permit revision procedures shall be used 
for applications requesting permit revisions that do not qualify as 
administrative amendments, de minimis permit revisions, or minor permit 
revisions. The State program shall contain criteria for determining 
whether a change is significant. At a minimum, every significant change 
in existing monitoring permit terms or conditions and every relaxation 
of reporting or recordkeeping permit terms or conditions shall be 
considered significant. (OPTION: DELETE PRECEDING SENTENCE) Nothing 
herein shall be construed to preclude the permittee from making changes 
consistent with this part that would render existing permit compliance 
terms and conditions irrelevant.
* * * * *
    (OPTION: ADD NEW PARAGRAPH (h)(3): (3) Changes involving new or 
alternative monitoring methods that have not been approved pursuant to 
major or minor NSR under criteria equivalent to those contained in this 
paragraph shall be processed as significant permit revisions. 
Permitting authorities may approve such changes only where the new or 
alternative monitoring or recordkeeping method is demonstrated to have 
a known relationship and ability to determine compliance with the 
applicable standard. Such demonstration shall include an analysis 
conducted in accordance with 40 CFR 64.4(b)(5) and 64.4(e) utilizing 
appendices A, B, C, and D, and related appendices' procedures of 40 CFR 
part 64. The permitting authority shall include the demonstration and 
written evidence of the permitting authority's evaluation of the 
demonstration in the proposed permit it sends to EPA for review as 
required by Sec. 70.8.)
    (i) * * *
    (2) Proceedings to reopen and issue a permit shall follow the same 
procedures as apply to initial permit issuance, shall affect only those 
parts of the permit for which cause to reopen exists, and shall be made 
as expeditiously as practicable. Notwithstanding the preceding 
sentence, proceedings to reopen for section 112 standards may use the 
following procedures:
    (i) Where the section 112 standard is promulgated after permit 
issuance, administrative amendment procedures under Sec. 70.7(e)(5) may 
be used.
    (ii) Where the section 112 standard is promulgated before permit 
issuance and a compliance statement required under the section 112 
standard is due after permit issuance, the source shall apply for a 
minor permit revision by the compliance statement deadline to 
incorporate requirements necessary to assure compliance with the 
standard, unless the source is exempted from this requirement under 
paragraph (iii) of this section or under the rulemaking promulgating 
the section 112 standard. If the source is utilizing alternatives 
requiring case-by-case approval, such as emissions averaging, or if 
required under the rulemaking promulgating the section 112 standard, 
the source shall apply for a significant permit revision by the 
compliance statement deadline, in lieu of the requirement in the 
preceding sentence to apply for a minor permit revision.
    (iii) Sources subject to the following section 112 standards 
promulgated as of [DATE OF PUBLICATION OF FINAL RULE] are exempt from 
the requirements in (ii) to apply for a minor permit revision: NESHAP 
for Industrial Process Cooling Towers.
    (3) Reopenings under paragraph (i)(1) of this section shall not be 
initiated before a notice of such intent is provided to the part 70 
source by the permitting authority at least 30 days in advance of the 
date that the permit is to be reopened, except that the permitting 
authority may provide a shorter time period in the case of an 
emergency. Where reopening for section 112 standards requiring initial 
notification by the source, and where the source has provided such 
notification to the permitting authority by the applicable date, the 
permitting authority need not provide the notice required by the 
preceding sentence.
* * * * *
    (k) Public participation. Except for revisions qualifying for minor 
permit revision procedures, de minimis revision procedures, or 
administrative amendments, all permit proceedings, including initial 
permit issuance, significant permit revisions, reopenings, and 
renewals, shall provide adequate procedures for public notice including 
offering an opportunity for public comment and a hearing on the draft 
permit in accordance with this paragraph (k) of this section. These 
procedures shall include the following:
* * * * *
    8. Section 70.8 is amended by:
    a. Amending paragraphs (a)(1) and (e) by replacing the word 
``modification'' with ``revision''
    b. Revising paragraphs (b)(1), (b)(2), (c)(3)(iii), and (d);
    c. Amending paragraph (c)(1) by adding the phrase ``Except as 
provided in Sec. 70.7(a)(7),'' to the beginning of the paragraph;
    d. Adding a sentence to the end of paragraph (e).
    Additions and revisions are set out to read as follows:


Sec. 70.8  Permit review by EPA and affected States.

* * * * *
    (b) Review by affected States. (1) The permit program shall provide 
that the permitting authority give notice of each draft permit to any 
affected State on or before the time that the permitting authority 
provides this notice to the public under Sec. 70.7 (e), (f), (g), and 
(k).
    (2) The permit program shall provide that the permitting authority, 
as part of the submittal of the proposed permit to the Administrator 
shall notify the Administrator and any affected State in writing of any 
refusal by the permitting authority to accept all recommendations for 
the proposed permit that the affected State submitted during the public 
or affected State review period. The notice shall include the 
permitting authority's reasons for not accepting any such 
recommendation. The permitting authority is not required to accept 
recommendations that are not based on applicable requirements or the 
requirements of this part.
    (c) * * *
    (3) * * *
    (iii) Process the permit under the procedures approved to meet the 
requirements of Sec. 70.7.
* * * * *
    (d) Public petitions to the Administrator. The program shall 
provide that, if the Administrator does not object in writing under 
paragraph (c) of this section, any person may petition the 
Administrator within 60 days after the expiration of the 
Administrator's 45-day review period to make such objection. The 
program shall also provide that the public have access to information 
concerning the beginning and expiration of EPA's 45-day review period 
as required for permit issuance, revisions, reopenings, and renewals 
pursuant to Sec. 70.7. Any petition shall be based only on objections 
to the permit that were raised with reasonable specificity during the 
public comment period provided for in Sec. 70.7 (e), (f), (g), or (k), 
whichever is applicable, unless the petitioner demonstrates that it was 
impracticable to raise such objections within such period, or unless 
the grounds for such objection arose after such period. If the 
Administrator objects to the permit as a result of a petition filed 
under this paragraph, the permitting authority shall not issue the 
permit until EPA's objection has been resolved, except that a petition 
for review does not stay the effectiveness of a permit or its 
requirements if the permit was issued after the end of the 45-day 
review period and prior to an EPA objection. If the permitting 
authority has issued a permit prior to receipt of an EPA objection 
under this paragraph, the Administrator will modify, terminate, or 
revoke such permit, and shall do so consistent with the procedures in 
Sec. 70.7 (j)(4) or (j)(5) (i) and (ii) except in unusual 
circumstances, and the permitting authority may thereafter issue only a 
revised permit that satisfies EPA's objection. In any case, the source 
will not be in violation of the requirement to have submitted a timely 
and complete application.
    (e) * * * Notwithstanding this prohibition on default permit 
issuance, permits may be revised on a default basis consistent with the 
procedures in Sec. 70.7 (e) and (f).
    9. Section 70.9 is amended by revising paragraph (c) to read as 
follows:


Sec. 70.9  Fee determination and certification.

* * * * *
    (c) Fee demonstration. The permitting authority shall provide a 
demonstration (and periodic updates as required by the Administrator) 
that the fee schedule selected will result in the collection and 
retention of fees in an amount sufficient to meet the requirements of 
this section.
* * * * *
    10. Section 70.10 is amended by:
    a. Revising paragraph (a)(1), by redesignating paragraph (a)(2) as 
(a)(3) and revising it, and by adding a new paragraph (a)(2);
    b. Amending paragraphs (b)(2) and (b)(3) by revising the citations 
to ``paragraph (c)(1)'' to read ``paragraph (b)(1)''; and
    c. Amending paragraph (c)(1)(ii)(C) by removing the parenthetical 
``(h)''.
    The additions and revisions are set out to read as follows:


Sec. 70.10  Federal oversight and sanctions.

    (a) Failure to submit an approvable program. (1) If a State fails 
to submit a complete part 70 program in a timely manner, or a required 
revision thereto (including revisions to correct deficiencies of a 
program that the Administrator had granted interim approval), in 
conformance with the provisions of Sec. 70.4, or if the Administrator 
disapproves a submitted program:
    (i) The Administrator may, prior to the expiration of the 18-month 
period referred to in paragraph (a)(1)(ii) of this section, apply any 
one of the sanctions specified in section 179(b) of the Act; and
    (ii) Eighteen months after the date required for submittal or 18 
months after the date of disapproval, whichever is applicable, the 
Administrator will apply sanctions under section 179(b) of the Act in 
the same manner and subject to the same deadlines and other conditions 
as are applicable in the case of a determination, disapproval, or 
finding under section 179(a) of the Act.
    (2) The sanctions under section 179(b)(2) of the Act shall not 
apply pursuant to paragraph (a)(1) of this section in any area unless 
the area has been designated a nonattainment under part D of title I of 
the Act.
    (3) The Administrator will promulgate, administer, and enforce a 
whole program, or a partial program as appropriate, for such State 
when:
    (i) Full approval of a whole part 70 program has not been granted 
by November 15, 1995, except for programs granted interim approval; or
    (ii) For programs granted interim approval, that approval has 
expired after November 15, 1995 and EPA has not granted full approval 
of a whole part 70 program.
* * * * *
    11. Section 70.11 is amended by revising the last sentence in 
paragraph (a)(3)(i) to read as follows:


Sec. 70.11  Requirements for enforcement authority.

* * * * *
    (a) * * *
    (3) * * *
    (i) * * * State law shall not include mental state as an element of 
proof for civil violations for which penalties up to $10,000 per day 
per violation are recoverable.
* * * * *
[FR Doc. 94-20497 Filed 8-26-94; 8:45 am]
BILLING CODE 6560-50-P