[Federal Register Volume 59, Number 205 (Tuesday, October 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26352]


[[Page Unknown]]

[Federal Register: October 25, 1994]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[OH65-1-6498a; FRL-5080-9]

 

Approval and Promulgation of Implementation Plans; Ohio

AGENCY: Environmental Protection Agency.

ACTION: Direct final rule.

-----------------------------------------------------------------------

SUMMARY: Ohio submitted its Rule 3745-35-07, entitled ``federally 
Enforceable Limitations on Potential to Emit,'' for Federal approval. 
The rule would establish a mechanism for creating federally enforceable 
limitations that would reduce sources' potential to emit such that 
sources could avoid major source permitting requirements. This 
rulemaking conditionally approves this rule as satisfying the 
requirements, set forth in the Federal Register of June 28, 1989, and 
authorizes Ohio to issue federally enforceable State operating permits 
addressing both criteria pollutants (regulated under section 110 of the 
Clean Air Act) and hazardous air pollutants (regulated under section 
112).
DATES: This final rule will be effective December 27, 1994 unless 
notice is received by November 25, 1994, that someone wishes to submit 
adverse or critical comments. If the effective date is delayed, timely 
notice will be published in the Federal Register.

ADDRESSES: Written comments should be addressed to: William L. 
MacDowell, Chief, Regulation Development Section, Air Enforcement 
Branch (AE-17J), United States Environmental Protection Agency, 77 West 
Jackson Boulevard, Chicago, Illinois 60604.
    Copies of the SIP revision request and USEPA's analysis are 
available for public inspection during normal business hours at the 
following addresses:

    United States Environmental Protection Agency, Region 5, Air and 
Radiation Division, 77 West Jackson Boulevard (AE-17J), Chicago, 
Illinois 60604; and Air Docket (6102), United States Environmental 
Protection Agency, 401 M Street, SW., Washington, DC 20460.

FOR FURTHER INFORMATION CONTACT: John Summerhays, Air Enforcement 
Branch, Regulation Development Section (AE-17J), United States 
Environmental Protection, Region 5, Chicago, Illinois 60604, (312) 886-
6067.

SUPPLEMENTARY INFORMATION:

I. Review of State Submittal

    For many years, Ohio has been issuing permits for major new sources 
and for major modifications of existing sources. Throughout this time, 
Ohio has also been issuing permits establishing limitations on the 
potential emissions from new sources so as to avoid major source 
permitting requirements. This latter type of permitting has been the 
subject of various guidance from the United States Environmental 
Protection Agency (USEPA), most notably the memorandum entitled 
``Guidance on Limiting Potential to Emit in New Source Permitting'' 
dated June 13, 1989.
    The operating permit provisions in title V of the Clean Air Act 
Amendments of 1990 have created interest in mechanisms for limiting 
sources' potential to emit, thereby allowing the sources to avoid being 
defined as ``major'' with respect to title V operating permit programs. 
A key mechanism for such limitations is the use of federally 
enforceable State operating permits (FESOPs). USEPA issued guidance on 
FESOPs in the Federal Register of June 28, 1989 (54 FR 27274). On April 
20, 1994, Ohio submitted its newly adopted Rule 3745-35-07 to provide 
for FESOPs in Ohio. This rule would supplement the pre-existing 
mechanisms for establishing federally enforceable limitations on 
potential to emit (i.e., State rules, administrative orders, and in 
some cases new source permits). This rulemaking evaluates whether Ohio 
has satisfied the requirements for this type of federally enforceable 
limitations on potential to emit.
    As specified in the Federal Register of June 28, 1989, the first 
requirement for approval of a FESOP program is that the State must have 
approved operating permit regulations. Rule 3745-35-07 supplements 
other rules in Ohio Chapter 3745-35 rules, collectively entitled ``Air 
Permits to Operate and Variances.'' These other rules were approved on 
June 10, 1982 (at 47 FR 25144), and today's rulemaking approves Rule 
3745-35-07.
    The second requirement is that sources have a legal obligation to 
comply with permit terms, and that USEPA may deem as ``not federally 
enforceable'' those permits which it finds fail to satisfy applicable 
requirements. Rule 3745-35-02 requires sources to obtain permits to 
operate, authorizes Ohio to establish terms and conditions in these 
permits ``to ensure compliance with [applicable requirements],'' and 
authorizes the State to suspend or revoke permits if the source 
violates the terms or conditions. Thus, this rule imposes a legal 
obligation on sources to comply with permit terms.
    An associated issue is whether Ohio's rules authorize USEPA to deem 
selected permits ``not federally enforceable.'' Rule 3745-35-07 
provides explicitly that Ohio may not issue a FESOP if USEPA objects 
during the public comment period. Language inadvertently included in 
the adopted rule could be interpreted not to allow USEPA to object to a 
permit's enforceability after permit issuance. However, this 
interpretation does not reflect State intent, and USEPA instead 
interprets Rule 3745-35-07 to deem permits not federally enforceable 
after as well as before issuance. Nevertheless, on June 16, 1994, Ohio 
submitted a commitment to revise its regulation to include the language 
it had intended to adopt, which would remove the potential for the 
above misinterpretation. This commitment serves to support a 
conditional approval of the rule.
    While it is Ohio's intent that USEPA be authorized to deem permits 
not federally enforceable after permit issuance, Ohio also requested 
that USEPA make these determinations during Ohio's public comment 
period (prior to permit issuance) whenever possible. Although USEPA is 
authorized to deem permit conditions not federally enforceable at any 
later date, USEPA will strive to determine Federal enforceability 
during Ohio's public comment period.
    The third requirement for FESOPs is that the program require all 
limits to be at least as stringent as other applicable federally 
enforceable provisions. Rule 3745-35-02(D) provides for terms and 
conditions in permits ``as are necessary to ensure compliance with 
applicable [air pollution requirements].'' These rules contain no 
provisions authorizing terms and conditions any less stringent than the 
applicable requirements.
    The fourth requirement is that the permit provisions must be 
permanent, quantifiable, and otherwise enforceable as a practical 
matter. Permit ``permanence'' does not mean never providing for a 
modification, reissuance, or revocation, for these elements are 
fundamental in all air permit programs. Permanence instead is 
considered in terms of provisions having continuing mandates, i.e. that 
USEPA has assurance that the provisions are in effect through the life 
of the permit and that any reissued permit will continue the provisions 
in effect. In this case, the limitations on potential to emit will 
generally be sought by sources so as to be redefined from ``major'' to 
``minor'' for permitting purposes. USEPA is assured that sources that 
obtain such limitations will keep these limitations in effect, so as 
never to be a ``major'' source violating the requirement for a 
``major'' source permit. The requirement for permit provisions to be 
quantifiable and practically enforceable must be met on a permit-by-
permit basis. Ohio's rules do provide in general for the issuance of 
enforceable permits. Thus, Ohio's rules provide for legally enforceable 
permits that USEPA may evaluate for practical enforceability.
    The fifth requirement is that the permits be subject to public 
notice and review. Rule 3745-35-07 (B)(2) provides that permits 
intended to establish federally enforceable limitations on potential to 
emit may not be issued without first providing opportunity for public 
comment, ``with concurrent notice and opportunity for comment given to 
[USEPA].''
    The USEPA technical support document discusses a possible 
misinterpretation of Rule 3754-35-07 relating to emissions trading. The 
rule provides that federally enforceable limitations on potential to 
emit may be established through permits to install, permits to operate 
(i.e. FESOPs), or State rules or administrative orders, and provides 
for sources to request provisions allowing emissions trading in any of 
these vehicles for emissions limitations. USEPA identified the 
potential argument that this rule authorizes sources to require the 
State to adopt rules to provide trading on a broad scale. However, upon 
reconsideration, USEPA finds this interpretation implausible, and 
concludes that neither Ohio's statute nor this rule would dictate that 
a source could require the State to adopt such rules.
    Ohio has requested that USEPA authorize federally enforceable 
limitations on potential to emit both pollutants regulated under 
section 110 of the Act (``criteria pollutants'') and pollutants 
regulated under section 112 (``hazardous air pollutants'' or ``HAPs''). 
As discussed above, the June 28, 1989 Federal Register notice provided 
five specific criteria for approval of State operating permit programs 
for the purpose of establishing federally enforceable limits on a 
source's potential to emit. This notice, because it was written prior 
to the 1990 amendments, addressed only SIP programs to control criteria 
pollutants. Federally enforceable limits on criteria pollutants 
(especially volatile organic compounds (VOCs) and particulate matter) 
may have the incidental effect of limiting certain HAPs listed pursuant 
to section 112(b). This situation would occur when a pollutant 
classified as a HAP is also classified as a criteria pollutant (e.g., 
benzene).1 As a legal matter, no additional program approval by 
USEPA is required in order for these criteria pollutant limits to be 
recognized for this purpose.
---------------------------------------------------------------------------

    \1\USEPA intends to issue guidance addressing the technical 
aspects of how these criteria pollutant limits may be recognized for 
purposes of limiting a source's potential to emit of HAPs to below 
section 112 major source levels.
---------------------------------------------------------------------------

    USEPA has determined that the five approval criteria for approving 
FESOP programs into the SIP, as specified in the June 28, 1989, Federal 
Register notice, are also appropriate for evaluating and approving the 
programs under section 112(l). The June 28, 1989, notice does not 
address HAPs because it was written prior to the 1990 amendments to 
section 112 and not because it establishes requirements unique to 
criteria pollutants. Hence, the five criteria discussed above are 
applicable to FESOP approvals under section 112(l) as well as under 
section 110.
    In addition to meeting the criteria in the June 28, 1989, notice, a 
FESOP program for HAPs must meet the statutory criteria for approval 
under section 112(l)(5). This section allows USEPA to approve a program 
only if it: (1) Contains adequate authority to assure compliance with 
any section 112 standards or requirements; (2) provides for adequate 
resources; (3) provides for an expeditious schedule for assuring 
compliance with section 112 requirements; and (4) is otherwise likely 
to satisfy the objectives of the Act.
    USEPA plans to codify the approval criteria for programs limiting 
potential to emit HAPs in subpart E of part 63, the regulations 
promulgated to implement section 112(l) of the Act. USEPA currently 
anticipates that these criteria, as they apply to FESOP programs, will 
mirror those set forth in the June 28, 1989, notice, with the addition 
that the State's authority must extend to HAPs instead of, or in 
addition to, VOCs and particulate matter. USEPA currently anticipates 
that FESOP programs that are approved pursuant to section 112(l) prior 
to the subpart E revisions will have had to meet these criteria, and 
hence, will not be subject to any further approval action.
    USEPA believes it has authority under section 112(l) to approve 
programs to limit potential to emit HAPs directly under section 112(l) 
prior to this revision to subpart E. Section 112(l)(5) requires USEPA 
to disapprove programs that are inconsistent with guidance required to 
be issued under section 112(l)(2). This might be read to suggest that 
the ``guidance'' referred to in section 112(l)(2) was intended to be a 
binding rule. Even under this interpretation, USEPA does not believe 
that section 112(l) requires this rulemaking to be comprehensive. That 
is, it need not address all instances of approval under section 112(l). 
USEPA has already issued regulations under section 112(l) that would 
satisfy this requirement. Given the severe timing problems posed by 
impending deadlines under section 112 and title V, USEPA believes it is 
reasonable to read section 112(l) to allow for approval of programs to 
limit potential to emit prior to issuance of a rule specifically 
addressing this issue.
    Ohio's satisfaction of the criteria published in the Federal 
Register of June 28, 1989, has been discussed above. In addition, 
Ohio's FESOP program meets the statutory criteria for approval under 
section 112(l)(5). USEPA believes that Ohio has adequate authority to 
assure compliance with section 112 requirements since the third 
criteria of the June 28, 1989, notice is met, that is, since the 
program does not provide for waiving any section 112 requirement. 
Nonmajor sources would still be required to meet applicable section 112 
requirements.
    Regarding adequate resources, Ohio has included in its request for 
approval under section 112(l) a commitment to provide adequate 
resources to implement and enforce the program, which will be obtained 
from fees collected under title V. USEPA believes that this mechanism 
will be sufficient to provide for adequate resources to implement this 
program, and will monitor the State's implementation of the program to 
assure that adequate resources continue to be available.
    Ohio's FESOP program also meets the requirement for an expeditious 
schedule for assuring compliance. A source seeking a voluntary limit on 
potential to emit is probably doing so to avoid a Federal requirement 
applicable on a particular date. Nothing in this program would allow a 
source to avoid or delay compliance with the Federal requirement if it 
fails to obtain the appropriate federally enforceable limit by the 
relevant deadline.
    Finally, Ohio's FESOP program is consistent with the objectives of 
the section 112 program since its purpose is to enable sources to 
obtain federally enforceable limits on potential to emit to avoid major 
source classification under section 112. USEPA believes this purpose is 
consistent with the overall intent of section 112. Accordingly, USEPA 
finds that Ohio's program satisfies applicable criteria for 
establishing federally enforceable limitations on potential to emit 
both criteria and hazardous air pollutants.

II. Rulemaking Action

    USEPA finds that the criteria for Ohio to be able to issue FESOPs 
are essentially met, and is today approving Rule 3745-35-07. This 
approval is conditioned on fulfillment of Ohio's commitment to revise 
its rule to clarify USEPA's authority to deem permits unenforceable 
after issuance. This conditional approval authorizes Ohio to establish 
federally enforceable limitations on potential to emit both criteria 
pollutants and hazardous air pollutants.
    USEPA evaluated whether to defer Ohio's authority to issue FESOPs 
pending adoption and USEPA approval of Ohio's intended rule 
clarification. Although Ohio's rule inadvertently included language 
that could be read to imply otherwise, USEPA believes it has adequate 
assurances of its authority to make post-issuance determinations that 
State-issued permits are not federally enforceable. First, USEPA 
interprets Ohio's rule to provide this authority now. Second, this 
authority will be further clarified in the near future. USEPA believes 
that Ohio will revise its rule shortly to clarify this authority for 
individual permits, possibly even before any FESOP permits are issued; 
but if Ohio fails to make the expected rule revisions, today's 
conditional approval will revert to a disapproval, and all ``FESOP'' 
permit conditions will no longer be federally enforceable.
    If Ohio fulfills its commitment, this conditional approval would be 
converted to full approval and the FESOP permitting authority 
continued. If Ohio fails to satisfy its commitment within one year of 
today, the conditional approval will convert to a disapproval and 
Ohio's authority to issue federally enforceable limitations on 
potential to emit will be rescinded. In either alternative, USEPA's 
authority to deem permits not federally enforceable both before and 
after permit issuance will be further clarified. Consequently, this 
rulemaking authorizes Ohio to issue FESOPs commencing immediately upon 
the effective date of this rule, which will be December 27, 1994, 
unless in the meantime USEPA defers or rescinds the effective date at a 
commenter's request.
    This action is being taken without prior proposal because the 
changes are believed to be noncontroversial and USEPA anticipates no 
significant comments on them. This action will be effective December 
27, 1994, unless notice is received by November 25, 1994, that someone 
wishes to submit adverse or critical comments. If the effective date is 
delayed, timely notice will be published in the Federal Register.
    Nothing in this action should be construed as permitting, allowing 
or establishing a precedent for any future request for revision to any 
SIP. USEPA shall consider each request for revision to the SIP in light 
of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.
    This action has been classified as a Table 2 action by the Regional 
Administrator under the procedures published in the Federal Register on 
January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993 
memorandum from Michael H. Shapiro, Acting Assistant Administrator for 
Air and Radiation. The OMB has exempted this regulatory action from 
Executive Order 12866 review.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. (5 U.S.C. 603 and 604.) 
Alternatively, USEPA 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.
    SIP approvals under section 110 and subchapter I, part D of the CAA 
do not create any new requirements, but simply approve requirements 
that the State is already imposing. Therefore, because the Federal SIP-
approval does not impose any new requirements, I certify that it does 
not have a significant impact on any small entities affected. Moreover, 
due to the nature of the Federal-State relationship under the CAA, 
preparation of a regulatory flexibility analysis would constitute 
Federal inquiry into the economic reasonableness of State action. The 
CAA forbids USEPA to base its actions concerning SIPs on such grounds. 
Union Electric Co. v. USEPA, 427 U.S. 246, 256-66 (S.Ct. 1976); 42 
U.S.C. 7410(a)(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by December 27, 1994. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Air pollution control, Carbon monoxide, Hydrocarbons, Incorporation 
by reference, Intergovernmental relations, Lead, Nitrogen dioxide, 
Ozone, Particulate matter, Sulfur oxides, Volatile organic compounds.

    Note: Incorporation by reference of the State Implementation 
Plan for the State of Ohio was approved by the Director of the 
Federal Register on July 1, 1982.

    Dated: September 19, 1994.
Valdas V. Adamkus,
Regional Administrator.

    Title 40 of the Code of Federal Regulations, chapter I, part 52, is 
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

    1. The authority citation for part 52 continues to read as follows:

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

Subpart KK--Ohio

    2. Section 52.1888 is added to subpart KK to read as follows:


Sec. 52.1888  Operating permits.

    Emission limitations and related provisions which are established 
in Ohio operating permits as federally enforceable conditions in 
accordance with Rule 3745-35-07 shall be enforceable by USEPA. USEPA 
reserves the right to deem permit conditions not federally enforceable. 
Such a determination will be made according to appropriate procedures, 
and be based upon the permit, permit approval procedures or permit 
requirements which do not conform with the operating permit program 
requirements or the requirements of USEPA's underlying regulations.

    3. Section 52.1919 is amended by adding paragraph (a)(2) to read as 
follows:


Sec. 52.1919  Identification of plan-conditional approval.

    (a) * * *
    (2) On April 20, 1994, Ohio submitted Rule 3745-35-07, entitled 
``federally Enforceable Limitations on Potential to Emit,'' and 
requested authority to issue such limitations as conditions in State 
operating permits. On June 16, 1994, Ohio submitted a commitment to 
revise Rule 3745-35-07 to clarify that the rule provides for USEPA 
objection to permits after issuance. The revisions are approved 
provided Ohio fulfills this commitment by October 25, 1995.
    (i) Incorporation by reference.
    (A) Rule 3745-35-07, adopted April 4, 1994, effective April 20, 
1994.
* * * * *
[FR Doc. 94-26352 Filed 10-24-94; 8:45 am]
BILLING CODE 6560-50-F