[Federal Register Volume 59, Number 222 (Friday, November 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28544]


[[Page Unknown]]

[Federal Register: November 18, 1994]


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


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[NM001; AD-FRL-S107-4]

 

Clean Air Act Final Interim Approval Operating Permits Program; 
New Mexico Environment Department

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: The EPA is promulgating interim approval of the operating 
permits program submitted by the New Mexico Environment Department 
(NMED) for the purpose of complying with Federal requirements for an 
approvable State program to issue operating permits to all major 
stationary sources, and to certain other sources with the exception of 
Bernalillo County and Indian Lands.

EFFECTIVE DATE: December 19, 1994.

ADDRESSES: Copies of the State's submittal and other supporting 
information used in developing the final interim approval are available 
for inspection during normal business hours at the following locations. 
Interested persons wanting to examine these documents should make an 
appointment with the appropriate office at least 24 hours before 
visiting day.

Environmental Protection Agency, Region 6, Air Programs Branch (6T-AN), 
1445 Ross Avenue, suite 700, Dallas, Texas 75202-2733.
New Mexico Environment Department, Harold Runnels Building, room So. 
2100, 1190 St. Francis Drive, Santa Fe, New Mexico 87503.

FOR FURTHER INFORMATION CONTACT: Adele D. Cardenas, New Source Review 
Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
suite 700, Dallas, Texas 75202-2733, telephone 214-665-7210.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

Introduction

    Title V of the 1990 Clean Air Act Amendments (sections 501-507 of 
the Clean Air Act (``the Act'')), and implementing regulations at 40 
Code of Federal Regulations (CFR) part 70 required that States develop 
and submit operating permits programs to EPA by November 15, 1993, and 
that EPA act to approve or disapprove each program within one year 
after receiving the submittal. The EPA's program review occurs pursuant 
to section 502 of the Act and the part 70 regulations, which together 
outline criteria for approval and disapproval. Where a program 
substantially, but not fully, meets the requirements of part 70, EPA 
may grant the program interim approval for a period of up to two years. 
If EPA has not fully approved a program by two years after the November 
15, 1993, date, or by the end of an interim program, it must establish 
and implement a Federal program.
    On May 19, 1994, EPA proposed interim approval of the operating 
permits program for the State of New Mexico. (See 59 FR 26158 (May 19, 
1994)). The EPA received public comment on the proposal and compiled a 
final Technical Support Document (TSD) responding to those comments and 
briefly describing and clarifying aspects of the operating permits 
program. In this document, EPA is taking final action to promulgate 
interim approval of the operating permits program for the State of New 
Mexico.

II. Final Action and Implications

A. Analysis of State Submission

    The State of New Mexico submitted to EPA, under a cover letter from 
the Governor dated November 15, 1993, the State's operating permits 
program. The submittal has adequately addressed all sixteen (16) 
elements required for full approval as discussed in part 70, except 
with regard to criminal fine authority. The State of New Mexico 
appropriately addressed all requirements necessary to receive interim 
approval of the State operating permits program pursuant to title V of 
the Act and 40 CFR part 70. The NMED agreed to seek correction of the 
statutory defect in the State's criminal fine authority during the next 
legislative session.

B. Response to Comments

1. Provisions for Implementing the Requirements of Section 112(g) of 
the Act
    Two commenters questioned the timing for the implementation of 
section 112(g). The commenters were concerned that New Mexico will be 
forced to implement section 112(g) without the direction of a 
promulgated rule, thereby placing undo burden on sources striving to 
maintain compliance. For example, the commenters were concerned that a 
source would be required to implement case-by-case maximum achievable 
control technology (MACT) requirements twice; once as defined by the 
State and later, as defined by the promulgated section 112(g) rule. 
Both commenters requested that EPA defer issuance of the New Mexico 
interim approval until the section 112(g) rule has been promulgated by 
EPA. In the event that the EPA could not defer interim approval until 
the section 112(g) rule is promulgated, the commenters requested that 
the interim approval be deferred until the statutory deadline for 
approval of the State's title V program (November 15, 1994).
    The EPA recognizes the complexity of implementing section 112(g) 
requirements prior to promulgation of the Federal section 112(g) rule. 
EPA maintains, however, that despite delays in issuing a final section 
112(g) rule, the Act still requires any State with an approved part 70 
operating permits program to implement section 112(g) for all 
qualifying new and modified sources of hazardous air pollutants. 
Regarding the suggestion to delay issuance of the final interim 
approval notice for New Mexico, the EPA would like to clarify that it 
is a statutory requirement of the Act that the EPA must approve or 
disapprove a State's operating permits program within one year after 
the State's program submittal. The EPA must therefore approve the New 
Mexico Operating Permits Program no later than November 15, 1994. The 
State has requested that the approval of the program not be delayed.
    The EPA has recently developed guidance discussing the period of 
initial section 112(g) implementation, ``Guidance for Initial 
Implementation of Section 112(g),'' from John Seitz, Director, Office 
of Air Quality Planning and Standards, June 28, 1994, addressing some 
of the concerns expressed by the commenters. In general, it allows 
States flexibility during the initial implementation period and 
indicates that the proposed section 112(g) rule (59 FR 15504, April 1, 
1994) should be considered guidance for States as they make decisions 
regarding program implementation. In addition, this memorandum 
recommends not revisiting case-by-case MACT determinations made before 
the State adopts rules to implement the final Federal section 112(g) 
rule.
    The proposed approval for the New Mexico Operating Permits Program 
published on May 19, 1994 (59 FR 26158), explained that New Mexico 
intends to implement section 112(g) of the Act with regard to new 
sources through the State's preconstruction process (See 59 FR 26158, 
26160). For informational purposes, the EPA wishes to reaffirm that, as 
also stated in the proposed approval at 59 FR 26160, the State of New 
Mexico commits to appropriately implementing the existing and future 
requirements of section 112 in a timely manner, and modifications, 
including section 112(g) modifications, for all existing sources must 
be made through the procedures outlined in subsection II(2) of the 
proposed approval notice at 59 FR 26160. The notice proposing approval 
of New Mexico's operating permits program at 59 FR 26160 cited the 
State's applicability requirements contained in Air Quality Control 
Regulation (AQCR) 770 section II(B)(3). Those requirements provide that 
the State's preconstruction process applies to all new and modified 
sources and its requirements become applicable requirements of all part 
70 permits. No exceptions to these requirements for modifications to 
existing sources were noted in the proposed approval as to sources of 
hazardous air pollutants, and no such exceptions exist under New Mexico 
law or regulation. Therefore, this notice reaffirms these requirements 
set out in the proposed approval notice for modifications to all 
existing sources, without exception for those covered by section 
112(g), and clarifies that, as with new sources, the State intends to 
implement section 112(g) for existing sources through its 
preconstruction process, as set out in AQCR 770 section II(B)(3) and 
referenced in subsection II(2) of the proposed approval notice at 59 FR 
26160.
    The EPA also wishes to clarify the mechanism the State intends to 
use for the implementation of Federal section 112(g) during the 
transition period before the Federal section 112(g) rule, proposed on 
April 1, 1994 (59 FR 15504) becomes final, and is adopted by the State. 
During this transition period, the State intends to use a two-pronged 
approach utilizing its existing preconstruction process. Immediately 
upon approval of the State's operating permits program, the State 
intends to implement section 112(g) through its existing 
preconstruction rule, AQCR 702. This rule was previously approved by 
the EPA to implement the preconstruction requirements of title I of the 
Act.
    The second phase of New Mexico's section 112(g) implementation 
approach during the transition period is expected to be based on the 
State's adoption of a new rule based on the proposed Federal section 
112(g) rule. This rule, AQCR 755, as proposed by the State, would 
reference the State's current preconstruction rule, and further clarify 
the requirements set out in the proposed Federal section 112(g) rule 
and its preamble. The State has already begun the process of revising 
its preconstruction program through the adoption of this new rule.
    The State anticipates that AQCR 755 could be effective as early as 
December 18, 1994. When final, this new rule is expected to enhance the 
mechanism contained in the State's existing preconstruction rule, AQCR 
702, for the implementation of section 112(g). The EPA is still 
evaluating what additional steps may be necessary so that permits 
issued pursuant to AQCR 755 will be federally enforceable for the 
purpose of satisfying section 112(g). If AQCR 755 is not finally 
adopted by the State, or is adopted with substanial changes, AQCR 702 
will continue to provide authority for the implementation of Federal 
section 112(g). After the final Federal section 112(g) rule is 
promulgated, the State will be required to formally revise its State 
rules accordingly.
    The EPA further wishes to clarify certain aspects of the Federal-
State relationship with regard to section 112(g). Implementation of 
section 112(g) by the State, including case-by-case determinations of 
MACT, is a requirement for approval of a State title V program. In 
other words, approval of the title V operating permits program confers 
on the State responsibility to implement section 112(g). Since the 
requirement to implement section 112(g) lies with the State in the 
first instance, there is no need for a delegation action apart from the 
title V program approval. EPA's approval of New Mexico's program for 
delegation of section 112 standards as promulgated does not affect this 
responsibility to implement section 112(g).
    As noted above and set out in the proposed approval notice, the 
State's commitment to implement all existing and future requirements of 
section 112 of the Act, and all MACT standards promulgated in the 
future in a timely manner, includes a commitment to implement both 
promulgated section 112 Federal standards and section 112 requirements 
such as section 112(g) that are not federally promulgated standards.
2. Provisions for Implementing the Requirements for Radionuclide 
Sources
    One commenter expressed the belief that an operator of a new 
radionuclide source would be exempt from Federal permitting 
requirements if modeling demonstrated that emissions from the facility 
would be below \1/10\ Maximum Permissible Concentration. The commenter 
suggested that, if the permitting function is transferred from EPA to 
NMED, this exemption would apply through the State operating permits 
program.
    The EPA is not aware of any exemptions from operating permit 
requirements for radionuclide sources. The EPA notes that any source 
subject to title V operating permits requirements which is also a 
radionuclide source, is required to obtain a part 70 operating permit, 
regardless of the source's emissions levels and Nuclear Regulatory 
Commission (NRC) licensing status.
    Another commenter requested clarification with respect to the 
applicability of the operating permits program to radionuclide sources, 
stating that inconsistencies existed between testimony on this subject 
presented by the NMED Air Quality Bureau in the development of the 
State regulations, and the language of the New Mexico Operating Permits 
Program proposed approval notice (59 FR 26158) with regard to 
radionuclides. The commenter further expressed the belief that 
radionuclides were not subject to State operating permits program 
requirements because the EPA has not yet defined the term ``major 
source'' for radionuclides.
    The EPA would like to clarify that under the Act, all existing 
National Emission Standards for Hazardous Air Pollutants (NESHAPs) are 
considered applicable requirements for purposes of the operating 
permits program, and therefore must be included in the operating 
permits of part 70 sources and enforced as all other applicable 
requirements. However, at this time, part 70 requirements only apply to 
``major sources.'' Because EPA has not yet defined what would 
constitute a ``major source'' based solely on radionuclide emissions, 
sources of radionuclides are deferred from part 70 requirements until 
EPA forms a policy for non-major sources or for sources of 
radionuclides emissions, unless such sources are major under any other 
definition of ``major source'' contained in part 70. Sources which are 
major under another part 70 definition of ``major source'' are required 
to obtain part 70 operating permits, and their permits must include 
appropriate provisions to cover radionuclide NESHAPs.
    The commenter further stated a belief that, based on the State's 
testimony during the State AQCR 770 hearing, it is not the intent of 
the New Mexico regulations to include radionuclides in the State's part 
70 operating permits program until the EPA has established its national 
program for radionuclides. It is EPA's understanding that this is 
accurate with respect to any radionuclide sources that would be 
required to obtain permits solely because of emissions of 
radionuclides. However, for those radionuclide sources which are major 
sources subject to part 70 requirements for other reasons, part 70 
operating permits must be obtained without exception under the New 
Mexico AQCR 770 permit regulations.
    The commenter also stated that EPA has a responsibility to ensure 
that Memoranda Of Understanding (MOUs) and settlement agreements with 
the NRC are considered prior to adoption and implementation of any new 
radionuclide regulations. As an example of a document which the 
commenter believes should be considered, the commenter cites EPA's 
February 7, 1994, proposed rescission notice for the 40 CFR part 61, 
subpart T regulation.
    The EPA would like to note that all MOUs and settlement agreements 
will be considered when implementing new radionuclide regulations. In 
addition, the final rule rescinding 40 CFR part 61, subpart T, as 
applied to NRC-licensed uranium mill tailings, was published in the 
Federal Register on July 15, 1994, and subpart T is no longer an 
applicable requirement under part 70. However, for those major sources 
which are subject to part 70 requirements and also emit radionuclides 
at levels subject to NESHAPs requirements other than those formerly 
contained in subpart T, the radionuclide sources should be included in 
the part 70 operating permit.
    The commenter also expressed the opinion that, prior to the 
adoption and implementation of radionuclide programs as part of the 
title V program, EPA must, through public rulemaking, promulgate a 
definition of ``major source'' for radionuclides under the provisions 
of section 112(q), and through public rulemaking, modify existing 
radionuclide standards established by EPA.
    As discussed above, no source will be required to obtain an 
operating permit solely because of radionuclide emissions, until EPA 
forms a policy for non-major sources or for sources of radionuclide 
emissions. However, as stated above, radionuclide sources subject to 
part 70 requirements under another part 70 definition of ``major 
source'' must obtain part 70 operating permits which govern 
radionuclide emissions.
3. Definition of Title I Modification
    For the reasons set forth in the EPA's proposed rulemaking to 
revise the interim approval criteria of 40 CFR part 70 (59 FR 44572, 
August 29, 1994), the EPA believes the phrase ``modification under any 
provisions of title I of the Act'' in 40 CFR 70.7(e)(2)(i)(A)(5) is 
best interpreted to mean literally any change at a source that would 
trigger permitting authority review under regulations approved or 
promulgated under title I of the Act. This would include State 
preconstruction review programs approved by EPA as part of the State 
Implementation Plan under section 110(a)(2)(C) of the Act and 
regulations addressing source changes that trigger the application of 
NESHAPs established pursuant to section 112 of the Act prior to the 
1990 amendments. New Mexico's operating permits program does not define 
``title I modification'' to include any modification permitted through 
its minor new source review (NSR) preconstruction permit program.
    On August 29, 1994, the EPA proposed revisions to its criteria for 
interim approval of State operating permits programs under 40 CFR 
70.4(d) to allow State operating permits programs with a narrower 
definition of ``title I modification'' like New Mexico's to receive 
interim approval (59 FR 44572). The EPA also solicited public comment 
on the proper interpretation of ``title I modification.'' (59 FR 44572, 
44573). The EPA stated that if, after considering the public comments, 
it continued to believe that the phrase ``title I modifications'' 
should be interpreted as including minor NSR changes, it would revise 
the interim approval criteria as needed to grant States that adopted a 
narrower definition, interim approval.
    The EPA intended to finalize its revisions to the interim approval 
criteria under 40 CFR 70.4(d) before taking final action on part 70 
operating permits programs submitted by the States. However, it will 
not be possible to delay approval of operating permits programs until 
final action has been taken on EPA's proposed revisions to the part 70 
interim approval criteria. This is because publication of the proposed 
revisions was delayed until August 29, 1994, and the EPA received 
several requests to extend the public comment period until November 27, 
1994.\1\ Given the importance of the issues in that rulemaking to 
States, sources and the public, but mindful of the need to take action 
quickly, the EPA agreed to extend the comment period until October 28, 
1994 (see 59 FR 52122 (October 14, 1994)). Consequently, final action 
to revise the interim approval criteria will not occur before the 
deadline for EPA action on State operating permits programs such as New 
Mexico's, that were submitted on or before November 15, 1993.\2\ The 
EPA believes it would be inappropriate to delay action on New Mexico's 
operating permits program, perhaps for several months, until final 
action is taken on the proposed revisions to the part 70 interim 
approval criteria. The EPA also believes it would be inappropriate to 
grant interim approval to New Mexico on this issue before final action 
is taken to revise the current interim approval criteria of 40 CFR 
70.4(b) to provide a legal basis for such an interim approval. Until 
the revision to the interim approval criteria is promulgated, the EPA's 
choices are to either fully approve or disapprove the narrower ``title 
I modification'' definition in States such as New Mexico. For the 
reasons set forth below, the EPA believes that disapproving such 
operating permits programs at this time based solely on this issue 
would be inappropriate.
---------------------------------------------------------------------------

    \1\EPA originally established a 30-day public comment period for 
the August 29, 1994 proposal. In response to several requests for 
extension, however, EPA agreed to allow an additional thirty days 
for public comments. See 59 FR 52122 (October 14, 1994).
    \2\Section 502(d) requires, in relevant part, that ``[n]ot later 
than 1 year after receiving a program, and after notice and 
opportunity for public comment, the Administrator shall approve or 
disapprove such program, in whole or in part.''
---------------------------------------------------------------------------

    First, the EPA has not yet conclusively determined that a narrower 
definition of ``title I modification'' is incorrect and thus a basis 
for disapproval (or even interim approval). The EPA has received 
numerous comments on this issue as a result of the August 29, 1994 
Federal Register notice, and the EPA cannot and will not make a final 
decision on this issue until it has evaluated all comments on that 
proposed rulemaking. Second, the EPA believes that the New Mexico 
Operating Permits Program should not be disapproved because the EPA 
itself has not yet been able to resolve this issue through rulemaking. 
Moreover, disapproving operating permits programs from States such as 
New Mexico that submitted their operating permits programs to the EPA 
on or before the November 15, 1993, statutory deadline, could lead to 
the unfair result that these States would receive disapprovals, while 
States which were late in submitting operating permits programs could 
take advantage of revised interim approval criteria should those 
criteria become final. In effect, States would be severely penalized 
for having made timely operating permits program submissions to the 
EPA. Finally, disapproval of a State operating permits program for a 
potential problem that primarily affects permit revision procedures 
would delay the issuance of part 70 permits, hampering State/Federal 
efforts to improve environmental protection through the operating 
permits program.
    For the reasons mentioned above, the EPA is approving the New 
Mexico Operating Permits Program's use of the narrower definition of 
``title I modification'' at this time.\3\ However, should the EPA in 
the interim approval criteria rulemaking make a final determination 
that such a narrow definition of ``title I modification'' is incorrect 
and that a revision of the interim approval criteria is warranted, the 
EPA will propose further action on New Mexico's operating permits 
program so that the State's definition of ``title I modification'' 
could become grounds for interim approval requiring revision prior to 
the EPA's granting of full approval to that program.\4\ An operating 
permits program like New Mexico's that receives full approval of its 
narrower ``title I modification'' definition pending completion of the 
EPA's rulemaking must ultimately be placed on an equal footing with 
programs of States that receive interim approval in later months under 
any revised interim approval criteria because of the same issue. 
Converting the full approval on this issue to an interim approval after 
the EPA completes its rulemaking would avoid this inequity. The EPA 
anticipates that an action to convert the full approval on the ``title 
I modification'' issue to an interim approval would be effected through 
an additional rulemaking, so as to ensure that there is adequate notice 
of the change in approval status.
---------------------------------------------------------------------------

    \3\At the present time, therefore, the EPA is not construing 40 
CFR 70.7(e)(2)(i)(A)(3) and 70.7(e)(2)(i)(A)(5) to prohibit New 
Mexico from allowing minor NSR changes to be processed as minor 
permit modifications.
    \4\State programs with a narrower ``title I modification'' 
definition that are acted upon by EPA after an Agency decision that 
such a narrower definition is inappropriate would be considered 
deficient, but would be eligible for interim approval under revised 
40 CFR 70.4(b).
---------------------------------------------------------------------------

C. Options for Approval

    The EPA is promulgating interim approval of the State's operating 
permits program submitted by the NMED on November 15, 1993. The State 
must make the following change to receive full approval: correct the 
statutory defect in criminal fine authority. In addition to raising the 
criminal fine amounts to at least $10,000 for all offenses listed in 40 
CFR 70.11(a)(3)(ii), statutory revisions must provide authority for the 
imposition of those fines on a per day per violation basis, as required 
by 40 CFR 70.11(a)(3)(ii). Evidence of these statutory revisions and 
their procedurally correct adoption must be submitted to the EPA within 
18 months of the EPA's interim approval of the New Mexico Operating 
Permits Program. This interim approval, which may not be renewed, 
extends until November 18, 1996. During this interim approval period, 
the State is protected from sanctions for failure to have a program, 
and the EPA is not obligated to promulgate a Federal operating permits 
program in the State. Permits issued under a program with interim 
approval have full standing with respect to part 70, and the one-year 
time period for submittal of permit applications by subject sources 
begins upon interim approval, as does the three-year time period for 
processing the initial permit applications.
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
section 112(l)(5) 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 promulgating approval of the State's 
program under section 112(l)(5) and 40 CFR 63.91 for receiving 
delegation of section 112 standards that are unchanged from Federal 
standards as promulgated. This program for delegations only applies to 
sources covered by the part 70 program.
    The EPA's policy is to apply sanctions to State programs if the 
Governor fails to submit a corrected program within 18 months after the 
due date for the submittal. If the State fails to submit a corrected 
program for full approval by May 20, 1996, the EPA will start an 18-
month clock for mandatory sanctions. If the State fails to submit a 
complete program before the expiration of the 18 month period, the EPA 
would impose sanctions. If the EPA disapproves a State's corrective 
program, and has not granted full approval within 18 months after the 
disapproval, then the EPA must impose mandatory sanctions. In both 
cases, if the State has not come into compliance within 6 months after 
EPA applies the first sanction, a second sanction is required. In 
addition, discretionary sanctions may be applied where warranted any 
time after the end of the interim approval period. If the EPA has not 
granted full approval to the State program by November 18, 1996, the 
EPA must promulgate, administer, and enforce a Federal operating 
permits program for the New Mexico Environment Department.

III. Administrative Requirements

A. Docket

    Copies of the State's submittal and other information relied upon 
for the final interim approval, including four public comments received 
during the public comment period and two received after the close of 
the public comment period, are contained in docket number FR Doc. 94-
12246, 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 final interim 
approval. The docket is available for public inspection at the location 
listed under the ADDRESSES section of this document.

B. Executive Order 12866

    The Office of Management and Budget has exempted this action from 
Executive Order 12866 review.

C. Regulatory Flexibility Act

    The EPA's actions under section 502 of the Act do not create any 
new requirements, but simply address operating permits programs 
submitted to satisfy the requirements of 40 CFR part 70. Because this 
action does not impose any new requirements, it does not have a 
significant impact on a substantial number of small entities.

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.

    Dated: November 1, 1994.
Jane N. Saginaw,
Regional Administrator (6A).

    40 CFR part 70 is 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. Appendix A to part 70 is amended by adding the entry for New 
Mexico in alphabetical order to read as follows:

Appendix A to Part 70--Approval Status of State and Local Operating 
Permits Programs

* * * * *

New Mexico

    (a) Environment Department; submitted on November 15, 1993; 
Effective Date on December 19, 1994; Interim Approval Expires on 
December 19, 1996.
    (b) [Reserved]
* * * * *
[FR Doc. 94-28544 Filed 11-17-94; 8:45 am]
BILLING CODE 6560-50-M