[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: 94-21254]


[[Page Unknown]]

[Federal Register: August 29, 1994]


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Part VII





Environmental Protection Agency





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40 CFR Part 70




Operating Permits Program Interim Approval Criteria; Proposed Rule
ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[FRL-5060-3]

 
Operating Permits Program Interim Approval Criteria

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing revisions to the interim approval 
criteria within the regulations in part 70 of chapter I of title 40 of 
the Code of Federal Regulations. Part 70 contains regulations requiring 
States to develop, and submit to EPA for approval, programs for issuing 
operating permits to major, and certain other, stationary sources of 
air pollution. Today's action proposes to make two changes to those 
criteria.
    As a result of today's proposed revisions to part 70, the 
permitting authority would have a period of time under the interim 
approval approach to revise its program with respect to these 
provisions to conform to the requirements of part 70 so that full 
approval could be granted before expiration of the interim approval and 
possible application of sanctions.

DATES: Comments on the proposed regulatory changes must be received by 
September 28, 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.
    Docket: Supporting information used in developing the proposed 
regulatory revisions is contained in Docket No. A-93-50. This docket is 
available for public inspection and copying between 8:30 a.m. and 3:30 
p.m. Monday through Friday, at the preceeding address. 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:
    Comments. The EPA is likely to be unable to extend the public 
comment period due to the necessity of promulgating these regulatory 
revisions in time to take action to grant interim approval to operating 
permits programs in late 1994. 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.

I. Background

    Title V of the Clean Air Act (Act) Amendments of 1990, Public Law 
101-549, enacted on November 15, 1990, requires EPA to promulgate 
regulations establishing the requirements for development and submittal 
of State programs and the minimum elements a program must contain to be 
approvable. On July 21, 1992, EPA's regulations meeting the Title V 
requirements were published in the Federal Register (57 FR 32250).
    Title V and the part 70 regulations require States and local 
agencies to submit operating permits programs to EPA within 3 years of 
enactment of the 1990 Act Amendments. In accordance with title V, EPA 
must take action within 1 year of program submittal to approve or 
disapprove a program. Section 502(g) of the Act allows EPA to grant 
interim approval to a program if it ``substantially meets the 
requirements'' of title V. Interim approval may be granted for a period 
of up to 2 years and may not be extended or renewed. The interim 
approval provision allows permitting authorities time to correct the 
program deficiencies preventing full program approval. The minimum 
program elements that a program must contain to be eligible for interim 
approval are contained in Sec. 70.4(d) of part 70.
    The first proposed revision to part 70 addresses programs with 
provisions allowing a permit to be revised through the minor permit 
modification procedure to reflect a change at a facility which was 
subject to EPA-approved minor source preconstruction permit 
requirements, commonly referred to as ``minor new source review'' 
(minor NSR). There has been confusion and controversy as to whether 
part 70 allows such changes to be processed as minor permit 
modifications (see Secs. 70.7(e)(2)(i)(A)(3) and (5)). As discussed 
below, EPA believes that the better interpretation of the current rule 
would be that it does not allow minor NSR changes to be processed as 
minor permit modifications. The purpose of the proposed change to part 
70 is to allow a program to receive interim approval if that 
interpretation is correct and the program allows minor NSR changes to 
be incorporated into the permit through minor permit modification 
procedures. Based on this regulatory revision, EPA intends to propose 
interim approval for those State programs that allow minor NSR changes 
to be incorporated into part 70 permits using minor permit modification 
procedures.
    The second proposed revision to part 70 addresses programs that do 
not incorporate into a source's part 70 permit changes which are 
established through an EPA-approved minor NSR program. Title V and part 
70 require a permit to contain provisions that assure compliance with 
all applicable requirements (section 502(b)(5)(A), Sec. 70.6(a)). The 
definition in part 70 of applicable requirement includes requirements 
established through minor NSR permitting procedures (Sec. 70.2, 
definition of ``applicable requirement''). The proposed revision to 
part 70 would, for the period of interim approval, allow permits to be 
issued and revised without incorporating those source changes that are 
applicable requirements solely because they are established through 
minor NSR.

A. Interim Approval of Programs

    Through the mechanism of interim approval, section 502(g) of the 
Act allows EPA to grant permitting authorities limited relief from the 
Act's tight timeframe for operating permit program development and 
submittal to EPA. The timeframe in section 502(d) of the Act requires 
program submittal within 3 years of enactment of the 1990 Act 
amendments (i.e., by November 15, 1993). If the permitting authority is 
unable to develop, adopt, and submit to EPA a fully approvable program 
by the required date, EPA may grant the submitted program interim 
approval if it ``substantially meets'' the requirements of title V (42 
U.S.C. 7661a(g)). In the notice granting interim approval, EPA must 
specify the changes that the permitting authority must make to the 
program before the program can receive full approval. The EPA may grant 
the program interim approval for a period of up to 2 years, and may not 
renew the interim approval. The effect of this interim approval 
provision in title V is to suspend for the period of interim approval 
the provisions of section 502(d) of the Act which require application 
of sanctions to a permitting authority and the imposition of a Federal 
permitting program for failure to submit a fully approvable program. 
The sanctions and Federal program would become immediately effective 
upon expiration of interim approval if the interim approval has not 
been replaced by a full approval by that expiration date. Part 70 
currently allows EPA to grant interim approval only if the program 
expressly meets certain minimum criteria (see Sec. 70.4(d)(3)(i-xi)) 
and substantially meets all other part 70 requirements (see memorandum 
in the docket for today's action (A-93-50) from John Seitz to Air 
Division Director, Regions I-X, August 2, 1993, ``Interim Title V 
Program Approvals'').

B. Provisions for Public Participation

    The EPA is concerned that one situation where neither full nor 
interim approval may be available under the current part 70 is when 
permitting authorities wish to use the minor permit modification 
process of part 70 to incorporate the results of minor NSR permit 
actions into the part 70 permit. Part 70 prohibits permitting 
authorities from processing under minor permit modification procedures 
modifications under any provision of title I of the Act (see 
Sec. 70.7(e)(2)(i)(A)(5)) or case-by-case determinations, or changes 
thereto, of an emission limitation or other standard (see 
Sec. 70.7(e)(2)(i)(A)(3)). Minor NSR changes occur pursuant to State or 
local programs approved under regulations promulgated under section 
110(a)(2) of the Act. Since that section occurs in title I of the Act, 
the argument has been made that minor NSR changes are consequently 
title I modifications that may not be incorporated into the part 70 
permit through minor permit modification procedures. For the reasons 
stated in the notice proposing changes to part 70's permit revision 
procedures elsewhere in today's Federal Register, EPA believes that the 
better interpretation of ``title I modifications'' would include minor 
NSR changes. The Agency solicits comment on the proper interpretation 
of ``title I modifications.''
    In addition, EPA considers to be a case-by-case determination any 
requirement imposed on a source-specific basis where the permitting 
authority has discretion in setting the requirement for that particular 
source. This would include a situation where the permitting authority 
imposes a technology-based control requirement on a source-specific 
basis in a minor NSR permit. Consequently, the current rule's 
limitation on case-by-case determinations would also limit the ability 
to use minor permit modification procedures for minor NSR changes.
    Pursuant to the interpretation of ``title I modifications'' set 
forth above, processing minor NSR changes as minor permit modifications 
would also violate the currently promulgated interim approval criteria 
language of Sec. 70.4(d)(3)(iv). These criteria require adequate public 
notice of and an opportunity for public comment and a hearing on draft 
permits and revisions in a program with interim approval, except for 
modifications qualifying for minor permit modification procedures under 
Sec. 70.7(e). Since, under this interpretation, minor NSR changes would 
not qualify for minor permit modification procedures, 
Sec. 70.4(d)(3)(iv) would require a program granted interim approval to 
provide public review and an opportunity for a hearing for minor NSR 
changes when they are incorporated into a part 70 permit. However, if 
permitting authorities incorporate minor NSR changes into part 70 
permits through minor permit modification procedures, the changes would 
not be subject to public review and an opportunity for a hearing. Thus, 
under the interpretation of ``title I modifications'' discussed above, 
part 70 would currently prohibit EPA from granting interim approval to 
programs that process minor NSR actions as minor permit modifications. 
The Agency is therefore proposing to revise part 70 to allow a program 
to receive interim approval if the program allows minor NSR changes to 
be processed as minor permit modifications.

C. Provisions for Incorporating Applicable Requirements

    Section 502(b)(5)(A) of the Act and Sec. 70.6(a)(1) require a part 
70 permit to contain provisions that assure compliance with all 
applicable requirements. The definition of ``applicable requirements'' 
in Sec. 70.2 includes ``any term or condition of any preconstruction 
permits issued pursuant to regulations approved or promulgated through 
rulemaking under title I, including parts C or D, of the Act.'' Minor 
NSR permit terms and conditions established through State or local 
minor NSR programs approved by EPA are therefore clearly title I 
applicable requirements and must be incorporated into part 70 permits. 
If a State or local agency lacks the authority to issue permits that 
include all applicable requirements, including those requirements 
established through the State or local minor NSR program, the 
underlying part 70 program would not be eligible for full approval.
    Moreover, Sec. 70.4(d)(3)(ii) of the current part 70 requires that, 
to be eligible for interim approval, a program must contain adequate 
authority to issue permits that assure compliance with all of the 
applicable requirements referred to in Sec. 70.4(c)(1), which includes 
applicable requirements under title I of the Act. If a part 70 program 
does not provide for incorporating into permits those requirements 
established through the EPA-approved State or local minor NSR program, 
Sec. 70.4(d)(3)(ii) prohibits EPA from granting that part 70 program 
interim approval.

II. Discussion of Today's Action

A. Proposed Action to Revise Interim Approval Criteria

    The EPA in today's notice is proposing to revise the interim 
approval criteria in Sec. 70.4(d)(3) to allow programs with provisions 
corresponding to one or more of the discrepancies with part 70 
previously identified to be eligible for interim approval. The EPA 
believes that the proposed revisions to the interim approval criteria 
are reasonable. The Act, in section 502(g), provides for interim 
approval on the basis of whether the submitted program would 
``substantially meet'' the provisions of title V. The establishment of 
``substantially meets'' criteria is within the discretion of EPA; it is 
also within EPA's authority to revise the criteria if there is 
appropriate justification for doing so. As subsequently discussed, EPA 
believes the actions in today's proposal are appropriate to address 
difficulties in program development that have occurred since 
promulgation of part 70 and are within the meaning of section 502(g) 
for judging whether programs substantially meet the requirements of 
title V of the Act.

B. Proposed Revision to Public Participation Provisions

    The EPA is today proposing to revise part 70 to allow interim 
approval of a program that is designed to use the current minor permit 
modification process to revise part 70 permits to incorporate the terms 
and conditions of permits issued under approved State or local minor 
NSR programs as well as conditions resulting from review of changes 
triggering review under 40 CFR 61.15 (for purposes of National Emission 
Standards for Hazardous Air Pollutants). If an operating permits 
program allows minor NSR or Sec. 61.15 changes to go through the minor 
permit modification process, then it could in many cases violate the 
section 70.4(d)(3)(iv) requirement for public participation on those 
actions since, under the more inclusive interpretation of ``title I 
modifications'' discussed earlier in this notice, they would not 
qualify for minor permit modification procedures. A number of programs 
that have been submitted to EPA for approval contain this mechanism and 
would, under this interpretation of the current part 70, be ineligible 
for either full or interim approval.
    As previously discussed under the background portion of this 
preamble, the provision in part 70 that bears directly upon interim 
approval of programs that process minor NSR changes as minor permit 
modifications is Sec. 70.4(d)(3)(iv). There are no other provisions in 
section 70.4(d) that would prevent interim approval of operating 
permits programs as long as EPA determines that otherwise the program 
substantially meets the requirements of part 70.
    The specific revision to part 70 being proposed would modify the 
interim approval criteria provision in Sec. 70.4(d)(3)(iv) to exclude 
from the requirement for public notice and an opportunity for public 
comment and a hearing those changes that would not be processed under 
minor permit modification procedures because they are changes subject 
to minor NSR or Sec. 61.15 that implicate Secs. 70.7(e)(2)(i)(3) and/or 
(5). The criteria for interim approval, as revised, would thus require 
public participation for all permit actions except for: (1) those that 
qualify as minor permit modifications (as is now stated in 
Sec. 70.4(d)(3)(iv)) and (2) those that incorporate changes subject to 
minor NSR or subject to the definition of modification in Sec. 61.15 
which are processed as minor permit modifications. This proposed change 
would allow programs that process minor NSR or Sec. 61.15 changes as 
minor permit modifications to receive interim approval even under the 
more inclusive interpretation of ``title I modifications'' discussed 
above, thereby allowing the permitting authority time to correct any 
deficiency in lieu of EPA disapproving those programs.
    The EPA acknowledges that the criteria for ``substantially meets'' 
with respect to requirements for public participation and the 
interaction with the phrase ``modification under any provision of title 
I of the Act'' may have been confusing to State and local permitting 
authorities. The EPA believes the better interpretation of the term 
``title I modification'' would include any change processed through 
either major or minor NSR procedures as well as Sec. 61.15. In the May 
10, 1991, Federal Register notice proposing the part 70 regulations (56 
FR 21712), footnotes 5 and 6 of the preamble (56 FR 21746) address the 
phrase ``title I modification.'' Footnote 6 does not clearly state that 
any change processed through the minor NSR procedures would be 
considered a title I modification, and footnote 5 refers to footnote 6 
for what constitutes a title I modification. As a result, State or 
local agencies may have interpreted the term ``title I modification'' 
to not include minor NSR changes. The Agency also realizes that 
permitting authorities may have believed that incorporation of minor 
NSR changes into part 70 permits did not constitute establishing case-
by-case emission limitations within the meaning of 
Sec. 70.7(e)(2)(i)(A)(3). Permitting authorities could have interpreted 
this provision to only apply to case-by-case determinations made during 
the permitting process rather than to those having been made through 
other mechanisms prior to issuance of the operating permit.
    Another approach that could allow interim approval would be to 
interpret the public participation provisions of minor NSR programs to 
suffice for meeting the public participation provisions of 
Sec. 70.4(d)(3)(iv). However, several operating permit programs that 
have been submitted to EPA for approval do not now guarantee adequate 
public participation in their minor NSR programs. This approach would 
thus not suffice to resolve the problem for all programs.
    The EPA does not wish to initially disapprove operating permits 
programs that allow minor NSR changes to be processed under minor 
permit modification procedures in view of the confusion that has 
surrounded the interpretation of title I modifications and the fact 
that EPA is taking comment on that interpretation in this proposal. 
Such disapprovals would have neither programmatic nor environmental 
benefits. For that reason EPA is proposing to change the interim 
approval criteria and intends to propose granting interim approval to 
State or local programs that allow minor NSR changes to be processed as 
minor permit modifications.

C. Proposed Revisions to Applicable Requirements Provisions

    The EPA is aware of at least one part 70 program (submitted by the 
State of Texas) that currently defines ``applicable requirements'' to 
exclude requirements established exclusively through an EPA-approved 
State or local minor NSR program. Along with its part 70 program, Texas 
submitted a written demonstration of program sufficiency to EPA in 
which the State cited what it believes are compelling reasons 
supporting its decision not to include minor NSR requirements as 
applicable requirements. Nevertheless, EPA reads Secs. 70.2 and 
70.6(a)(1) to clearly and unequivocally require that minor NSR 
requirements are applicable requirements which must be included in part 
70 permits. Therefore, EPA has evaluated Texas's demonstration only in 
terms of arguments which could at best support a potential interim 
approval for Texas, not in terms of arguments that the Texas program 
would, as presently constituted, be eligible for full approval.
    Texas has argued, for example, that the State's existing minor NSR 
program is so stringent as to make the integration of minor NSR permits 
into part 70 permits infeasible, and, from the standpoint of 
environmental protection, unnecessary. The EPA acknowledges that 
Texas's minor NSR program is a very stringent one. The Texas program 
requires authorization prior to the construction of any new facility or 
the modification of an existing facility. The term ``facility'' is 
broadly defined to include any ``point of origin'' of air contaminants, 
so there is no opportunity for a source to ``net out'' of minor NSR. 
Moreover, Texas mandates best available control technology (BACT) as 
the emission control technology which applies to all minor NSR changes. 
Texas further subjects each minor NSR permit and permit amendment to a 
health effects evaluation which considers the cumulative effect of the 
proposed action, together with other air contaminant sources, on 
ambient air quality. Finally, where the Texas minor NSR program 
provides for public notice of a permit action, the program provides 
citizens the right to request a full evidentiary hearing on the action 
(as opposed to the more limited opportunities for public participation 
typically provided by State or local agencies under NSR programs).
    Similarly, Texas has pointed to the exceptionally large number of 
part 70 sources which are located in the State and which are candidates 
for minor NSR. Texas estimates that it has over 3,000 part 70 sources, 
including the nation's largest concentration of chemical manufacturing 
and petroleum refining facilities. Many of these sources have large 
numbers of emission units, making part 70 permitting difficult and 
time-consuming. In addition to this part 70 responsibility, the State 
anticipates that it will have to process between 8,000 and 10,000 minor 
NSR actions each year. While Texas's burden of processing part 70 
applications will be heavy in any event, Texas contends that the added 
burden of integrating minor NSR into part 70 permits will completely 
overwhelm the State's processing system in the initial years of program 
implementation. Texas has informed EPA that it is currently developing 
a computerized information management system which is designed to ease 
the task of integrating minor NSR and part 70 permitting requirements. 
This system is not yet operational, however, and is not expected to be 
available for database integration for several months.
    Finally, Texas argues that because its minor NSR permits would be 
cross-referenced within part 70 permits so that the public and EPA 
could easily locate and review the minor NSR applicable requirements, 
inclusion of the minor NSR requirements themselves is unnecessary. 
While EPA is not persuaded that merely cross-referencing minor NSR 
permits in a part 70 permit is in any way equivalent to setting forth 
in permit terms minor NSR requirements themselves as applicable 
requirements, EPA believes that this argument militates in favor of 
potentially granting interim approval to the Texas program.
    On the basis of the type of showing of compelling reasons described 
above, EPA believes that a State or local permitting authority with 
minor NSR/part 70 integration difficulties such as Texas should be 
given the opportunity, if otherwise appropriate under the Sec. 70.4(d) 
criteria, to receive interim approval and to correct its program 
deficiency during the interim period. Therefore, EPA is proposing today 
to revise its interim approval criteria to allow for interim approval 
of programs that do not currently have authority to assure compliance 
with applicable requirements that are developed exclusively through an 
EPA-approved minor NSR program. The proposed revision also provides 
that each part 70 permit issued by such a program during the interim 
approval period must state that applicable minor NSR requirements are 
not included in that part 70 permit, and shall cross-reference any 
excluded minor NSR permits so that citizens may access and review those 
permits. Moreover, minor NSR requirements excluded from part 70 permits 
would not be eligible for the permit shield under Sec. 70.6(f). The EPA 
wishes to emphasize that it is only proposing a revision to part 70 to 
make possible the evaluation of a program like that submitted by Texas. 
The EPA takes no position at this time as to the approvability of the 
State of Texas's request for interim approval. The EPA will evaluate 
the adequacy of Texas's demonstration of compelling reasons and whether 
it otherwise ``substantially meets'' part 70 as part of the Agency's 
ongoing review of the Texas part 70 program. Comment is solicited on 
whether this interim relief is appropriate in situations other than 
that described for the Texas program.
    The EPA also wishes to make it clear that excluding minor NSR 
requirements from part 70 permits does not fulfill the objectives of 
title V and the Act. First, a part 70 permit that does not contain 
minor NSR requirements is not an accurate compendium of the Act 
requirements applicable to the permitted source. Second, as a result of 
exclusion from the part 70 permit, minor NSR requirements may not be 
subject to the same issuance and revision procedures, or include the 
same compliance terms, as would be the case if they were included in 
the part 70 permit.
    Texas has argued, however, that it will be able to effectively 
implement its approved minor NSR program during the interim period 
without specifically including the details of the minor NSR permits 
issued under that program in issued part 70 permits. The minor NSR 
requirements are for the most part applied on a source-specific basis, 
and are federally enforceable independent of their inclusion in a part 
70 permit. In addition, because Texas has also requested interim 
approval as a source category limited program, which would provide for 
issuance of part 70 permits over a 5-year period, this exclusion should 
affect significantly less than half the permits that will be issued in 
Texas during the (at most) 2-year period in which the interim approval 
would be in effect. The EPA notes that as a condition of being granted 
interim approval, Texas would have to submit a corrective program at 
least 6 months prior to the end of the interim approval period, and 
permits and permit revisions issued after EPA approves this corrective 
submittal would have to contain the requirements of minor NSR permits 
issued after that time. Moreover, minor NSR requirements excluded from 
part 70 permits would not be eligible for the permit shield under 
Sec. 70.6(f) and the excluded requirements would be cross-referenced in 
the part 70 permit as discussed above.
    The EPA believes that these considerations would considerably 
mitigate the consequences of excluding minor NSR from permits issued 
during the interim period. The EPA will consider these and similar 
factors in determining whether programs from Texas or other permitting 
authorities meeting the revised criteria otherwise ``substantially 
meet'' the requirements of part 70. Two specific factors EPA will 
consider in evaluating a request for interim approval under the revised 
criteria are (1) whether a program's exclusion of minor NSR as an 
applicable requirement will diminish the effectiveness of the State or 
local agency's minor NSR program during the interim period, and (2) 
whether the State or local permitting authority had previously 
submitted a part 70 program to EPA that included minor NSR as an 
applicable requirement. The EPA believes that State and local 
permitting authorities should be discouraged from revising their part 
70 programs to exclude minor NSR as an applicable requirement, 
especially when this revision would necessitate EPA's interim approval 
(at best) of a program that would otherwise qualify for full approval. 
The EPA also emphasizes that if an interim approval is later granted to 
an operating permits program under the revised criteria, EPA expects 
that the permitting authority will address and fully correct its 
deficient authority no later than 6 months before expiration of any 
interim approval. Full approval of such a program would not be possible 
at the end of the interim approval period if the problem with the 
applicable requirements authority were not corrected.
    If and when EPA grants full approval to a program that had received 
interim approval under the revised criteria, each part 70 permit issued 
during the interim period that excluded minor NSR requirements would 
have to be reopened to incorporate the excluded requirements. Moreover, 
the terms and conditions of minor NSR permits issued or revised after 
the end of the interim period would have to be included as applicable 
requirements in part 70 permits, even if the part 70 permit was 
originally issued during the interim approval period.

D. Proposed Revision Regarding Effectiveness of Permits

    The EPA proposes to clarify the description in Sec. 70.4(d)(2) 
concerning the effect of EPA's interim approval of a part 70 program to 
explicitly state that permits issued under a program granted interim 
approval are fully effective for all title V purposes. Because 
permitting authorities operating under interim approval are able to 
issue fully effective part 70 permits to sources, EPA considers those 
permitting authorities eligible to charge all required permit fees to 
sources in accordance with Sec. 70.9.

III. Impacts of Proposal

    Consideration of anticipated impacts supports today's proposed 
revisions to the interim approval criteria. The impacts of not 
providing these opportunities could include disapproval of several 
operating permits programs, imposition of sanctions on permitting 
authorities, the promulgation of Federal programs, delay in the 
effective date of permitting programs, and undue disruption in 
permitting authority efforts to conform to part 70. Conversely, the EPA 
does not feel there are significant adverse effects of the actions 
proposed in today's notice.
    The interim approval period during which a minor NSR change could 
be processed under minor permit modification procedures or would not be 
included in the permit as an applicable requirement would last for no 
more than the first 2 years of the permit issuance transition period. 
This period could even be less than 2 years in that program 
modifications needed to qualify for full program approval must be fully 
adopted by the permitting authority and submitted to EPA no later that 
6 months prior to the end of the interim approval period.
    Permit applications for all sources subject to the program are due 
during the first year, and one-third of the permits must be issued 
during each of the 3 years of the transition period. These factors will 
reduce the number of permits being issued and also the number of permit 
modifications occurring during this transition period when permits are 
initially being issued; therefore, the effect of the changes being 
proposed today will be less significant. Up to one-half of the permits 
may not even be issued during the interim approval period. In addition, 
the permitting actions covered by today's proposal would only be those 
that are first processed through EPA-approved minor NSR programs. These 
factors limit any programmatically adverse impacts of today's proposed 
revisions to the interim approval criteria regarding minor NSR changes, 
while at the same time ensuring that permitting authorities will not be 
delayed in administering and implementing their programs and issuing 
federally-enforceable operating permits.
    With respect to proposed part 70 revisions concerning public 
participation, EPA is proposing elsewhere in today's Federal Register 
to take regulatory action to revise the part 70 permit revision 
process. State and local programs will be required generally to submit 
revised programs to meet the new requirements no later than 2 years 
after EPA promulgates the revisions to part 70. There appears, 
therefore, to be little to gain by forcing a State or local agency 
whose program does not conform to the existing interim approval 
requirements regarding public participation to adopt program revisions 
that will shortly thereafter have to again be revised to conform to 
revised permit revision provisions.
    In light of the proposal to revise the permit revision provisions 
of part 70, the disruption and difficulties that would be caused by 
disapproving submitted State and local programs, the short duration and 
apparent minimal impact of today's action, and the apparent widespread 
misunderstanding of the requirements of the current rule, the EPA 
believes these proposed revisions to interim approval criteria of part 
70 are reasonable and necessary.

IV. Action on Submitted Programs

    The EPA realizes that there are also significant transitional 
issues to address in implementing these changes. Many of the current 
part 70 program submittals have been evaluated against the current part 
70 requirements and EPA has proposed an action as to their 
approvability. In these notices, EPA has proposed interim approval of 
those submitted programs with the described minor permit modification 
problem upon the condition that EPA revise the interim approval 
criteria to address the problem. While these notices may assume a 
positive result to today's proposal, they avoid the need to 
subsequently re-propose interim approval if today's proposed relief 
were promulgated. Implementation of part 70 would be unduly delayed by 
the need for a second rulemaking process. If today's proposal is not 
promulgated, EPA may subsequently be required to take alternative 
action.
    The EPA can grant an interim approval for a period of up to 2 years 
and the interim approval cannot be renewed. The EPA would indicate in 
the interim approval notice the discrepancy of the program with full 
approval requirements of part 70 and would indicate that the program 
would have to be revised to conform with part 70 within the interim 
approval period for full program approval subsequently to be granted. 
Note that if part 70 is revised before the end of the period granted 
for interim approval, the program granted interim approval would most 
likely be revised to meet the revised part 70.
    Permitting authorities would have to complete their program 
revision and submit revised programs to EPA at least 6 months prior to 
expiration of the interim approval to allow EPA time to process the 
change and grant the program full approval before the expiration of the 
interim approval. If the permitting authority fails to take proper 
action to revise its program within the timeframe allowed under interim 
approval, the interim approval will expire and the provisions of 
section 502(d) of the Act regarding sanctions and EPA imposition of a 
Federal operating permits program would take effect.
    The revisions to the interim approval criteria in part 70 being 
proposed today would allow permitting authorities to proceed with their 
programs expeditiously, rather than requiring EPA to disapprove the 
programs and begin promulgation of Federal programs. The EPA solicits 
comment on this approach and how best to address the concerns 
associated with its implementation.

VI. Administrative Requirements

A. Public Hearing

    No public hearing will be held to discuss the proposed regulatory 
revisions unless a hearing is requested in writing and sufficient 
reason for a hearing is included in the written request. If a public 
hearing is held, it will take place on the last day of the public 
comment period. Persons wishing to attend a hearing, if held, should 
call (919) 541-5586 to determine if a hearing will be held and to 
obtain the time and location. Persons wishing to request a public 
hearing must submit a written request to EPA during the public comment 
period at the address given in the 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 must judge whether a regulation is a 
significant regulatory action which would precipitate the requirement 
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, or the principles set forth in 
E.O. 12866.
    Today's proposed revisions to part 70 would simply remove 
obstructions to the implementation of part 70 and State and local 
operating permits programs. However, the Agency has determined that 
this rule is a ``significant'' regulatory action under the terms of 
E.O. 12866, sections 3(f)(1-4), since it is closely linked to the 
notice published elsewhere in today's Federal Register proposing 
regulatory revisions involving several novel legal and policy issues. 
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.

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). That analysis is not necessary, however, 
if an Agency's Administrator certifies that the rule will not have a 
significant economic impact on a substantial number of small entities.
    The EPA has established guidelines for determining whether an RFA 
is required to accompany a rulemaking package. The guidelines state the 
criteria for determining when the number of affected small entities is 
``substantial'' and whether there is a significant impact. The 
determination of significant impact for small businesses essentially 
depends upon compliance costs, production costs, and predicted 
closures. For small governments, the determination of significant 
impact depends upon compliance costs, operating costs, and 
recordkeeping costs.
    A regulatory flexibility screening analysis was prepared to examine 
the potential for significant adverse impacts on small entities 
associated with specific permitting provisions of the current part 70 
and is in the docket for the part 70 rulemaking action (Docket No. A-
90-33). The effect of today's proposal allows permitting authorities to 
proceed with implementation of their programs and would not create any 
additional impacts on small businesses.

E. Paperwork Reduction Act

    The information collection requirements (ICR) for the part 70 
regulations were submitted for approval to OMB under the Paperwork 
Reduction Act, 44 U.S.C. 3501 et seq. An ICR document 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 Street, S.W., Washington, 
D.C. 20460, (202) 260-2740.
    Today's proposed regulatory revisions do not significantly alter 
the estimates in the original ICR.

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 follows:

PART 70--[AMENDED]

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

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

    2. Section 70.4 is amended by revising paragraphs (d)(2), (d)(3) 
introductory text, (d)(3)(ii), and (d)(3)(iv) to read as follows:


Sec. 70.4   State program submittals and transition.

    (d) * * *
    (2) Interim approval shall expire on a date set by the 
Administrator (but not later than 2 years after such approval), and may 
not be renewed. Sources shall become subject to the program according 
to the schedule approved in the State program. Permits issued under an 
interim approved program shall be fully effective and expire at the end 
of their fixed term, unless renewed under a part 70 program.
    (3) The EPA may grant interim approval to any program if it meets 
each of the following minimum requirements and otherwise substantially 
meets the requirements of this part:
* * * * *
    (ii) Applicable requirements. The program must provide for adequate 
authority to issue permits that assure compliance with the requirements 
of paragraph (c)(1) of this section for those major sources covered by 
the program. Notwithstanding the preceding sentence, where a State or 
local permitting authority lacks adequate authority to issue or revise 
permits that assure compliance with applicable requirements established 
exclusively through an EPA-approved minor NSR program, EPA may grant 
interim approval to the program upon a showing by the permitting 
authority of compelling reasons which support the interim approval and 
that the program otherwise substantially meets the requirements of this 
part. Any part 70 permit issued during this interim period that does 
not incorporate minor NSR requirements shall note this fact in the 
permit, and shall indicate how citizens may obtain access to excluded 
minor NSR permits.
* * * * *
    (iv) Public participation. The program must provide for adequate 
public notice of and an opportunity for public participation on draft 
permits, reopenings for cause, and revisions as required by Sec. 70.7 
of this part, except for:
    (A) Modifications qualifying for minor permit modification 
procedures under Sec. 70.7(e) of this part as promulgated July 21, 
1992; and
    (B) Permit revisions to incorporate changes subject to minor NSR or 
Sec. 61.15 of part 61 of this chapter processed as minor permit 
modifications under Sec. 70.7(e) of this part as promulgated July 21, 
1992.
* * * * *
[FR Doc. 94-21254 Filed 8-26-94; 8:45 am]
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