[Federal Register Volume 59, Number 176 (Tuesday, September 13, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-22582] [[Page Unknown]] [Federal Register: September 13, 1994] ----------------------------------------------------------------------- ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 70 [AD-FRL-5071-2] Operating Permit Program: Proposed Interim Approval; Minnesota Pollution Control Agency AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed interim approval. ----------------------------------------------------------------------- SUMMARY: The EPA proposes interim approval of the Operating Permit Program submitted by the Minnesota Pollution Control Agency (MPCA) for the purpose of complying with Federal requirements which mandate that States develop, and submit to EPA, programs for issuing operating permits to all major stationary sources, and to certain other sources. DATES: Comments on this proposed action must be received in writing by October 13, 1994. ADDRESSES: Comments should be addressed to Rachel Rineheart (AE-17J) at the Region 5 address indicated. Copies of the State's submittal and other supporting information used in developing the proposed rule are available for inspection during normal business hours at the following location: U.S. Environmental Protection Agency, Region 5, Air Enforcement Branch (AE- 17J), 77 West Jackson Boulevard, Chicago, Illinois 60604. Please contact Rachel Rineheart at (312) 886-7017 to arrange a time if inspection of the submittal is desired. FOR FURTHER INFORMATION CONTACT: Rachel Rineheart, U.S. Environmental Protection Agency, Region 5, Air Enforcement Branch (AE-17J), 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-7017. SUPPLEMENTARY INFORMATION: I. Background and Purpose A. Introduction As required under title V of the Clean Air Act (``the Act'') as amended (1990), EPA has promulgated rules which define the minimum elements of an approvable State operating permit program and the corresponding standards and procedures by which the EPA will approve, oversee, and withdraw approval of State operating permit programs (see 57 FR 32250 (July 21, 1992)). These rules are codified at 40 Code of Federal Regulations (CFR) part 70. Title V requires States to develop, and submit to EPA, programs for issuing these operating permits to all major stationary sources and to certain other sources. The Act requires that States develop and submit these programs to EPA by November 15, 1993, and that EPA act to approve or disapprove each program within 1 year after receiving the submittal. The EPA's program review occurs pursuant to section 502 of the Act and the part 70 regulations, which together outline criteria for approval or disapproval. Where a program substantially, but not fully, meets the requirements of part 70, EPA may grant the program interim approval for a period of up to 2 years. If EPA has not fully approved a program by 2 years after the November 15, 1993 date, or by the end of an interim program, it must establish and implement a Federal program. B. Scope MPCA's permitting rule, Minnesota Rules, Chapter 7007, combines the State's preconstruction and operating permit programs into a single permitting program. This approval is limited solely to Minnesota's part 70 operating permit program submittal of November, 15, 1993. This is not a rulemaking under section 110 of the Act. The State has submitted a separate request for approval of this rule as a preconstruction permitting program and a federally enforceable state operating permit program as a revision to the State Implementation Plan. Minnesota's submittal includes a statement that the program will be enforceable in the entire State of Minnesota except Indian tribal lands. Because MPCA has not demonstrated, consistent with applicable principles of Indian law and Federal Indian policies, legal authority to regulate sources on tribal lands, the proposed interim approval of Minnesota's operating permits program will not extend to lands within the exterior boundaries of any Indian reservation in the State of Minnesota.1 Title V sources located within the exterior boundaries of Indian reservations in Minnesota will be subject to either the Federal operating permits program, to be promulgated at 40 CFR part 71, or to a tribal operating permits program approved pursuant to title V and the regulations that will be promulgated under section 301(d) of the Act. The section 301(d) regulations will authorize EPA to treat tribes in the same manner as States for appropriate Act provisions.2 --------------------------------------------------------------------------- \1\This is not a determination that MPCA could not possibly demonstrate jurisdiction over sources within the exterior boundaries of Indian reservations in Minnesota. However, no such showing has been made. \2\Tribes may also have inherent sovereign authority to regulate air pollutants from sources on tribal lands. --------------------------------------------------------------------------- II. Proposed Action and Implications A. Analysis of State Submission 1. Support Materials Charles W. Williams, Commissioner, MPCA, submitted Minnesota's part 70 Operating Permit Rule on November 15, 1993, requesting source category-limited interim approval of the State's program. The Commissioner of MPCA has the authority to submit this rule on behalf of the Governor of Minnesota under Minnesota Statutes section 116.03, subdivision 3. The submittal contained all required elements under 40 CFR 70.4, including a description of Minnesota's operating permit program, permitting program documentation, and the Attorney General's legal opinion that the laws of the State of Minnesota provide adequate authority to carry out all aspects of the program required by the Clean Air Act. 2. Regulations and Program Implementation The Minnesota permitting regulations (Minnesota Rules, Chapter 7007) substantially meet the requirements of 40 CFR 70.4, 70.5, and 70.6 with respect to permit content including operational flexibility; 40 CFR 70.7 and 70.8 with respect to permit processing requirements (including public participation and minor permit modifications); and 40 CFR 70.11 with respect to requirements for enforcement authority. The Minnesota permitting regulations meet the requirements of 40 CFR 70.2 and 70.3 with respect to applicability and 40 CFR 70.5 with respect to criteria which define insignificant activities and complete application forms. Minnesota Rules 7007.0100, subpart 26 defines ``Title I modification'' as ``any change that constitutes a modification under any provision of [T]itle I of the Act.'' In addition, Minnesota's rule specifically includes major modifications under parts C and D of title I, modifications subject to a New Source Performance Standard, and modifications subject to a National Emission standard for Hazardous Air Pollutants (NESHAPs) or any other rules adopted by the Administrator under section 112 of the Act. Commissioner Charles Williams states in his April 19, 1994, letter that Minnesota interprets its definition to include modifications made pursuant to a preconstruction permitting program approved into the State Implementation Plan under section 110(a)(2)(C) of the Act. The EPA is soliciting comment, as part of the proposal to revise part 70, on the proper definition of ``Title I modifications.'' However, EPA believes that Minnesota's definition, in light of this clarification, would be consistent with any definition of ``Title I modifications'' EPA may adopt. For further discussion on the State's regulations, please refer to the Technical Support Document accompanying this approval. The program submittal meets the program requirements of title V and 40 CFR part 70 except as discussing in II.B of this document. 3. Permit Fee Demonstration Minnesota's fee collection rule, Minnesota Rules 7002.0035, sets the minimum amount of funding the State receives from title V sources by multiplying the number of tons of regulated pollutants listed in the most recent available emissions inventory, with a maximum of 4,000 tons per pollutant per facility, by $25 + the Consumer Price Index (CPI) per ton. However, the current definition of regulated pollutant in MPCA's fee rule (Minnesota Rules 7007.0015, subpart 4) does not include particulate matter greater than 10 microns in diameter, total reduced sulfur, hydrogen chloride, or sulfuric acid mist, all of which are included in the Federal definition. MPCA intends to remedy this discrepancy in a rulemaking scheduled for 1994. When this discrepancy has been corrected, MPCA's fee rule will set the minimum funding the State will receive at the presumptive minimum. However, during the first year after interim approval is granted, the fees that the State of Minnesota will be collecting, which has already been established through the State's regulations, will result in collection of a dollar per ton amount less than the presumptive minimum. Minnesota will collect $6,558,000 in emission fees for the first year of its program, and has demonstrated that the fees collected will be sufficient to run the program for the first year. However, the fee demonstration in Minnesota's submittal does not contain all information required by 40 CFR 70.9. Specifically, Minnesota's fee demonstration does not contain an estimate of permit program costs for the first four years after program approval. Therefore, the State's fee demonstration may only be given an interim approval. In order for the State to receive full approval of it's program, the State must either change its definition of regulated air pollutant in its fee rule to include all pollutants included in the Federal definition, or it must submit a four year projection of costs and fees to be collected that demonstrates that the State will collect fees in an amount sufficient to run its program. 4. Provisions Implementing the Requirements of Other Titles of the Act a. Authority and/or Commitments for Section 112 Implementation. Minnesota has demonstrated in its title V program submittal adequate legal authority to implement and enforce all section 112 requirements through the title V permit. This legal authority is contained in Minnesota's enabling legislation and in regulatory provisions defining ``applicable requirements'' and stating that the permit must incorporate all applicable requirements. EPA has determined that this legal authority is sufficient to allow Minnesota to issue permits that assure compliance with all section 112 requirements. EPA is interpreting the above legal authority to mean that Minnesota is able to implement and enforce all section 112 requirements. For further rationale on this interpretation, please refer to the Technical Support Document accompanying this rulemaking and the April 13, 1993, guidance memorandum titled ``Title V Program Approval Criteria for section 112 Activities,'' signed by John Seitz. b. Implementation of 112(g) Upon Program Approval. As a condition of approval of the part 70 program, Minnesota is required to implement section 112(g) of the Act from the date of approval of the part 70 program. Imposition of case-by-case determinations of Maximum Achievable Control Technology (MACT) or offsets under section 112(g) will require the use of a mechanism for establishing federally enforceable restrictions on a source-specific basis. The EPA is proposing to approve Minnesota's preconstruction permitting program found in Minnesota Rules Chapter 7007 under the authority of title V and part 70 solely for the purpose of implementing section 112(g) during the transition period between title V approval and adoption of a State rule implementing EPA's section 112(g) regulations. EPA believes this approval is necessary so that Minnesota has a mechanism in place to establish federally enforceable restrictions for section 112(g) purposes from the date of part 70 approval. Although section 112(l) generally provides authority for approval of State air toxics programs, title V and section 112(g) provide authority for this limited approval because of the direct linkage between implementation of section 112(g) and title V. The scope of this approval is narrowly limited to section 112(g) and does not confer or imply approval for purposes of any other provision under the Act, for example section 110. If Minnesota does not wish to implement section 112(g) through its preconstruction permit program and can demonstrate that an alternative means of implementing section 112(g) exists, the EPA may, in the final action approving Minnesota's part 70 program, approve the alternative instead. This approval is for an interim period only, until such time as the State adopts rules implementing regulations promulgated by EPA to implement section 112(g). Accordingly, EPA is proposing to limit the duration of this approval to a reasonable time following promulgation of section 112(g) regulations so that Minnesota, acting expeditiously, will be able to adopt regulations consistent with the section 112(g) regulations. The EPA is proposing here to limit the duration of this approval to 18 months following promulgation by EPA of section 112(g) regulations. Comment is solicited on whether 18 months is an appropriate period considering Minnesota's procedures for adoption of regulations. c. Program for Delegation of Section 112 Standards as Promulgated. Requirements for approval, specified in 40 CFR 70.4(b), encompass section 112(l)(5) approval requirements for approval of a program for delegation of section 112 standards as promulgated by EPA as they apply to part 70 sources. Section 112(l)(5) requires that the State's program contain adequate authorities, adequate resources for implementation, and an expeditious compliance schedule, which are also requirements under part 70. Therefore, the EPA is also proposing to grant approval under section 112(l)(5) and 40 CFR 63.91 of Minnesota's program for receiving delegation of section 112 standards that are unchanged from the Federal standards as promulgated. Minnesota has informed EPA that it intends to accept delegation of section 112 standards through automatic delegation. The details of this delegation mechanism will be set forth in a Memorandum of Agreement between Minnesota and EPA, expected to be completed prior to approval of Minnesota's section 112(l) program for delegation of unchanged Federal standards. This program applies to both existing and future standards, but is limited to sources that will obtain part 70 permits. d. Title IV. Minnesota's program contains adequate authority to issue permits which reflect the requirements of title IV and its implementing regulations. In addition, Minnesota's submittal contains a commitment to revise its regulations as necessary to accommodate Federal revisions and additions to title IV and the Acid Rain regulations once they are promulgated. B. Options for Approval/Disapproval and Implications The EPA is proposing to grant interim approval to the operating permit program submitted by Minnesota on November 15, 1993. If this approval is promulgated, the State must make the following changes to receive full approval: 1. Remove from the State's legislation Minnesota Statutes section 609.671, subdivision 14 which provides an exemption from criminal prosecution for sources which give notice of a violation and take reasonable steps to remedy the violation. 2. Revise Minnesota Rules 7007.0800, Subpart 6 to clearly state that all part 70 sources must submit semi-annual reports. 3. Revise Minnesota Rules 7007.1400 to be consistent with the requirements of 40 CFR 70.7(d). Minnesota Rules 7007.1400 provides that the administrative amendment procedure may be used to ``clarify a permit term.'' This ambiguous provision is not consistent with the requirements of 40 CFR 70.7(d) and could be interpreted broadly enough to allow changes to a permit which should be handled through the permit modification procedures. 4. Revise Minnesota Rules 7007.0800, Subpart 16 to require that the permit terms included in 40 CFR 70.6(a) be expressly stated in part 70 permits. Minnesota Rules 7007.0800, Subpart 16 allows permit terms which are required by 40 CFR 70.6(a) to be included in the permit by reference to the state regulation. Failure to have these provisions expressly stated in the permit may create difficulties in enforcing those terms and may make it difficult for citizens to understand what provisions apply to a source. 5. Revise the definition of regulated pollutant at Minnesota Rules 7002.0035 to include any ``regulated pollutant for presumptive fee calculation'' as defined at 40 CFR 70.2, or submit a detailed fee demonstration containing all required elements under 40 CFR 70.9. 6. Revise Minn. Rules 7007.0750, subpart 2.C to require the permitting authority to take action on minor and moderate permit amendments within 90 days of receipt of a complete application. This interim approval, which may not be renewed, extends for a period of up to 2 years. During the interim approval period, the State is protected from sanctions for failure to have a program, and EPA is not obligated to promulgate a Federal permit program in the State. Permits issued under a program with interim approval have full standing with respect to part 70, and the 1-year time period for submittal of permit applications by subject sources begins upon interim approval, as does the 3-year time period for processing the initial permit applications. Minnesota has requested Source Category-Limited (SCL) interim approval of its part 70 operating permit program. Although the State would be required to issue permits within 3 years to all sources subject to the program that obtains interim approval, some sources would not be subject to the requirement to obtain a permit until full approval is granted. Part 70 sources which are not addressed until full approval are also subject to the 3-year time period for processing initial permit applications. The 3-year period for these sources would begin on the date full approval of the State's program is granted. Therefore, initial permitting of all part 70 sources might not be completed until 5 years after interim approval is granted. Minnesota has presented the following as compelling reasons for why SCL interim approval should be granted in the November 15, 1993, submittal: 1. Minnesota does not have nonattainment areas for ozone. Consequently, Minnesota has not adopted Volatile Organic Compound (VOC) Reasonably Available Control Technology rules, nor does it have its own State air toxics rules. Therefore, MPCA and the facilities regulated by the air toxics program are not familiar with and have not implemented measures to control VOC emissions. MPCA staff and the regulated community will need additional time to catch up with other States in becoming familiar with control techniques and to identify and contact VOC/toxic sources. 2. Minnesota has a variety of large, complex sources which require extensive amounts of time to permit. The time spent issuing permits to these sources will take considerable time away from issuing permits to other sources, making it impossible given MPCA's resource constraints for MPCA to issue permits to all part 70 sources within 3 years. 3. MPCA expects to lose a portion of its experienced permitting engineers to private industry when facilities are required to submit permit applications. The time which is necessary to train new staff as this occurs will increase the amount of time needed to issue a permit. 4. Although MPCA has almost doubled its staff since January of 1992 in anticipation of the workload associated with title V, the workload will surpass available resources. MPCA intends to request additional funding during the 1995 legislative session; however, MPCA will still be unable to take final action on all applications within 3 years. EPA believes Minnesota has presented compelling reasons for a SCL interim approval. The EPA believes that a program granted SCL interim approval must apply to at least 60 percent of all part 70 sources, which are responsible for at least 80 percent of the aggregate emissions from all part 70 sources. The EPA requires a demonstration that these criteria are met when a significant percentage of sources or aggregate emissions are excluded from the interim program. The Minnesota submittal which included a schedule for permitting part 70 sources which would permit 60.71 percent of part 70 sources emitting 81.35 percent of aggregate emissions from part 70 sources within 3 years of program approval met the criteria.d. EPA believes that SCL interim approval is warranted for Minnesota's program. For further discussion on EPA's determination, see the Technical Support Document accompanying this approval. III. Administrative Requirements A. Request for Public Comments The EPA is requesting comments on all aspects of this proposed rule. Copies of the State's submittal and other information relied upon for the proposed interim approval are contained in a docket maintained at the EPA Regional Office. The docket is an organized and complete file of all the information submitted to, or otherwise considered by, EPA in the development of this proposed approval. The principal purposes of the docket are: (1) To allow interested parties a means to identify and locate documents so that they can effectively participate in the approval process; and (2) To serve as the record in case of judicial review. The EPA will consider any comments received by October 13, 1994. B. Executive Order 12866 The Office of Management and Budget has exempted this regulatory action from Executive Order 12866 review. C. Regulatory Flexibility Act Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA must prepare a regulatory flexibility analysisassessing the impact of any proposed or final rule on small entities. 5 U.S.C. 603 and 604. Alternatively, EPA may certify that the rule will not have a significant impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and government entities with jurisdiction over populations of less than 50,000. Interim approvals under section 502 of the Act do not create any new requirements, but simply approve requirements that the State is already imposing. Therefore, because the Federal approval of a State operating permit program does not impose any new requirements, I certify that it does not have a significant impact on any small entities affected. Moreover, due to the nature of the Federal-state relationship under the Act, preparation of a regulatory flexibility analysis would constitute Federal inquiry into the economic reasonableness of state action. The Act forbids EPA to base its actions concerning operating permit programs on such grounds. Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C. 7410(a)(2). If the interim approval is converted to a disapproval, it will not affect any existing state requirements applicable to small entities. Federal disapproval of the State submittal does not affect its state- enforceability. Moreover, EPA's disapproval of the submittal does not impose a new Federal requirement. Therefore, EPA certifies that this disapproval action does not have a significant impact on a substantial number of small entities because it does not remove existing state requirements nor does it substitute a new Federal requirement. List of Subjects in 40 CFR Part 70 Environmental protection, Administrative practice and procedure, Air pollution control, Intergovernmental relations, Operating permits, Reporting and recordkeeping requirements. Authority: 42 U.S.C. 7401-7671q. Dated: August 31, 1994. Valdas V. Adamkus, Regional Administrator. [FR Doc. 94-22582 Filed 9-12-94; 8:45 am] BILLING CODE 6560-50-F