[Federal Register Volume 60, Number 15 (Tuesday, January 24, 1995)]
[Rules and Regulations]
[Pages 4563-4568]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1736]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[CO-001; FRL-5143-5]


Clean Air Act Final Interim Approval of Operating Permits 
Program; State of Colorado

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: The EPA is promulgating interim approval of the Operating 
Permits Program submitted by the State of Colorado 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.

EFFECTIVE DATE: February 23, 1995.

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 location: 
U.S. Environmental Protection Agency, Region 8, 999 18th Street, suite 
500, Denver, Colorado 80202.

FOR FURTHER INFORMATION CONTACT: Laura Farris, 8ART-AP, U.S. 
Environmental Protection Agency, Region 8, 999 18th Street, suite 500, 
Denver, Colorado 80202, (303) 294-7539.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. 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 (part 70) require 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 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.
    On October 14, 1994, EPA published a Federal Register document 
proposing interim approval of the Operating Permits Program for the 
State of Colorado (PROGRAM). See 59 FR 52123. The EPA received adverse 
comments on this proposed interim approval, which are summarized and 
addressed below. In this rulemaking EPA is taking final action to 
promulgate interim approval of the Colorado PROGRAM.

II. Final Action and Implications

A. Analysis of State Submission

    The Governor of Colorado submitted an administratively complete 
title V Operating Permit Program for the State of Colorado on November 
5, 1993. The Colorado PROGRAM, including the operating permit 
regulations (part C of Regulation No. 3), substantially meets the 
requirements of 40 CFR 70.2 and 70.3 with respect to applicability; 40 
CFR 70.4, 70.5, and 70.6 with respect to permit content including 
operational flexibility; 40 CFR 70.5 with respect to complete 
application forms and criteria which define insignificant activities; 
40 CFR 70.7 with respect to public participation and minor permit 
modifications; and 40 CFR 70.11 with respect to requirements for 
enforcement authority.
    Comments noting deficiencies in the Colorado PROGRAM were sent to 
the State in a letter dated April 8, 1994. The deficiencies were 
segregated into those that require corrective action prior to interim 
PROGRAM approval, and those that require corrective action prior to 
full PROGRAM approval. The State committed to address the deficiencies 
that require corrective action prior to interim PROGRAM approval in a 
letter dated May 12, 1994, and subsequently held a public hearing to 
consider and finalize these changes on August 18, 1994. EPA has 
reviewed these changes and has determined that they are adequate to 
allow for interim approval. One issue noted in the April 8th letter 
related to insignificant activities that requires further corrective 
action prior to full PROGRAM approval is discussed below in section C 
``Final Action.'' An additional deficiency that requires corrective 
action prior to full PROGRAM approval regarding the implementation of 
section 112(r) of the Act is also discussed below in section C ``Final 
Action.''

B. Response to Comments

    The comments received on the October 14, 1994 Federal Register 
document proposing interim approval of the Colorado PROGRAM, and EPA's 
response to those comments, are as follows:
    Comment #1: The commenter objected to EPA's proposed approval of 
Colorado's preconstruction permitting program for purposes of 
implementing section 112(g) of the Act during the transition period 
between PROGRAM approval and adoption of a State rule implementing 
EPA's section 112(g) regulations. The commenter argued that there is no 
legal basis for delegating to Colorado the section 112(g) program until 
EPA has promulgated a section 112(g) regulation and the State has a 
section 112(g) program in place. In addition, the commenter argued that 
the Colorado PROGRAM fails to address critical threshold questions of 
when an emission increase is greater than de minimis and when, if it 
is, it has been offset satisfactorily.
    EPA Response: EPA disagrees with the commenter's contention that 
section 112(g) cannot take effect until after EPA has promulgated 
implementing regulations. The statutory language in section 112(g)(2) 
prohibits the modification, construction, or reconstruction of a 
hazardous air pollutant (HAP) source after the effective date of a 
title V program unless a Maximum Achievable Control Technology (MACT) 
standard (determined on a case-by-case basis, if 
[[Page 4564]] necessary) is met. The plain meaning of this provision is 
that implementation of section 112(g) is a title V requirement of the 
Act and that the prohibition takes effect upon EPA's approval of the 
State's PROGRAM regardless of whether EPA or a state has promulgated 
implementing regulations.
    The EPA has acknowledged that states may encounter difficulties 
implementing section 112(g) prior to the promulgation of final EPA 
regulations and has provided guidance on the 112(g) process (see April 
13, 1993 memorandum entitled, ``Title V Program Approval Criteria for 
Section 112 Activities'' and June 28, 1994 memorandum entitled, 
``Guidance for Initial Implementation of Section 112(g),'' signed by 
John Seitz, Director of the Office of Air Quality Planning and 
Standards). In addition, EPA has issued guidance, in the form of a 
proposed rule, which may be used to determine whether a physical or 
operational change at a source is not a modification either because it 
is below de minimis levels or because it has been offset by a decrease 
of more hazardous emissions. See 59 FR 15004 (April 1, 1994). EPA 
believes the proposed rule provides sufficient guidance to Colorado and 
their sources until such time as EPA's section 112(g) rulemaking is 
finalized and subsequently adopted by the State.
    The EPA is aware that Colorado lacks a program designed 
specifically to implement section 112(g). However, Colorado does have a 
preconstruction review program that can serve as a procedural vehicle 
for establishing a case-by-case MACT or offset determination and making 
these requirements federally enforceable. The EPA wishes to clarify 
that Colorado's preconstruction review program may be used for this 
purpose during the transition period to meet the requirements of 
section 112(g).
    Note that in the notice of proposed interim approval of Colorado's 
PROGRAM, EPA referred to part B of Colorado Regulation No. 3 as the 
location of Colorado's preconstruction permitting program. While this 
is the correct citation in Colorado's current version of Regulation No. 
3 (which was recently revised and reorganized), EPA has not yet 
approved the recent revisions and reorganization as part of the State 
Implementation Plan (SIP). However, EPA has approved the State's 
preconstruction permitting program as part of the SIP under the 
previous organization of Regulation No. 3, and EPA believes Colorado's 
preconstruction permitting program is adequate to meet the requirements 
of section 112(g). Specifically, section III.A.1. of the EPA-approved 
version of Regulation No. 3 requires that a preconstruction permit be 
obtained for construction or modification of a stationary source. 
``Stationary source'' is defined in Colorado's Common Provisions 
Regulation as ``any building, structure, facility, or 
installation...which emits any air pollutant regulated under the 
Federal Act.'' ``Air pollutant'' is defined very broadly by the State 
and would consequently include all HAPs. Thus, the State has adequate 
authority to issue preconstruction permits to new and modified sources 
of HAPs and, because the State's preconstruction permitting program has 
been approved as part of the SIP, these permits would be considered 
federally enforceable.
    Another consequence of the fact that Colorado lacks a program 
designed specifically to implement 112(g) is that the applicability 
criteria found in its preconstruction review program may differ from 
the criteria in section 112(g). EPA will expect Colorado to utilize the 
statutory provisions of section 112(g) and the proposed rule as 
guidance in determining when case-by-case MACT or offsets are required. 
As noted in the June 28, 1994 guidance, EPA intends to defer wherever 
possible to a State's judgement regarding applicability determinations. 
This deference must be subject to obvious limitations. For instance, a 
physical or operational change resulting in a net increase in HAP 
emissions above 10 tons per year could not be viewed as a de minimis 
increase under any interpretation of the Act. In such a case, the EPA 
would expect Colorado to issue a preconstruction permit containing a 
case-by-case determination of MACT.
    Comment #2: The commenter asserted that Colorado has authority to 
issue preconstruction permits only to sources of HAPs that are 
components of criteria pollutants, such as PM-10 and volatile organic 
compounds (VOCs).
    EPA Response: EPA disagrees with this assertion. As described 
above, EPA believes the State's preconstruction permitting program 
requires permits for all new and modified sources of HAPs. The 
exemptions to the construction permitting requirements in section 
III.D. of the EPA-approved version of Regulation No. 3 support this 
claim, in that many of the exemptions specifically clarify that the 
construction permit exemptions do not apply to HAPs, and HAPs are 
defined in the Common Provisions Regulation as including all of those 
pollutants listed in section 112(b) of the Act. Therefore, EPA believes 
that, until the 112(g) rule has been promulgated and adopted by the 
State, the State has the authority to issue preconstruction permits to 
all new and modified major sources of HAPs.
    Comment #3: Two commenters expressed concern with the EPA proposal 
to consider Colorado's law (S.B. 94-139) preventing the admission of 
voluntary environmental audit reports as evidence in any civil, 
criminal or administrative proceeding as ``wholly external'' to 
Colorado's PROGRAM and asserted that these provisions are consistent 
with congressional intent and EPA policy, and the Federal Government 
should not interfere in the State's interpretation and exercise of its 
own prosecutorial discretion. In addition, one commenter also stated 
that, absent the audit privilege, it would be unlikely that voluntarily 
disclosed information would be identified and further indicated that, 
although title V may be delegated by EPA, such delegation does not 
preempt or require the State to defend its laws to EPA.
    EPA Response: EPA did not identify this as an approval issue and 
stated that it is not clear at this time what effect this privilege 
might have on title V enforcement actions. A national position on 
approval of environmental programs in states which adopt statutes that 
confer an evidentiary privilege for environmental audit reports is 
being established by EPA. Further, EPA disagrees with the commenter's 
interpretation of congressional intent and EPA policy. Congressional 
intent was to encourage owners and operators to do self-auditing and 
correct any problems expeditiously, but this is not the same as 
providing an evidentiary privilege and enforcement shield. Congress 
could have provided such a privilege and shield in the Act, but did 
not. Section 113 of the Act and title V contain no exceptions for 
withholding self-auditing reports as evidence in any enforcement 
proceeding. Likewise, 40 CFR part 70 contains no such exceptions. Also, 
EPA disagrees with the commenter's assumption that, absent the audit 
privilege provided by Colorado law, it is unlikely that voluntarily 
disclosed information would otherwise be identified. For example, 
section 114 of the Act gives EPA the authority to issue information 
requests and requires disclosure of information regardless of whether 
it is generated through a self-audit. Colorado has similar authority. 
EPA agrees that Colorado has the authority to adopt its own laws 
regarding environmental matters as long as the area has not been 
preempted by Congress. However, title V of the Act and the part 70 
regulations give EPA the responsibility to ensure [[Page 4565]] that 
states implement their operating permit programs in accordance with 
title V and part 70. Thus, if Colorado's self-audit privilege impedes 
Colorado's ability to implement and enforce its PROGRAM consistent with 
title V and part 70, EPA may find it necessary to withdraw its approval 
of the Colorado PROGRAM.
    Comment #4: Two commenters objected to EPA's requirement that the 
State obtain EPA approval of any new additions to Colorado's list of 
insignificant activities before such exemptions can be utilized by a 
source. One commenter stated that the State's administrative process 
was for adding new exemptions to the State's Air Pollution Emission 
Notice (APEN) requirements (which is a State program separate from the 
part 70 operating permit program) and not for adding new insignificant 
activities to be exempt from part 70 permitting requirements.
    EPA Response: 40 CFR 70.5(c) requires EPA approval for lists of 
insignificant activities identified in a state's title V operating 
permit program. States have discretion to develop such lists but EPA is 
required to review and approve these lists initially during the program 
review and later during implementation as states seek to add new 
exemptions to the list. Section 70.5(c) states, in part, ``the 
Administrator may approve as part of a State program a list of 
insignificant activities and emissions levels . . .'' [emphasis added]. 
Thus, EPA is not interfering with Colorado's legitimate exercise of 
discretion but is merely requiring Colorado to include EPA review and 
approval when amending its PROGRAM so it is consistent with 40 CFR 
70.5(c). In addition, EPA agrees with the commenter that Colorado's 
Exemption From APEN Requirements (Regulation 3, section II.D.1. of part 
A) is separate from title V's insignificant activities list and 
additions or changes to the list would not be effective until approved 
by the Colorado Air Quality Control Commission as a revision to 
Regulation 3. However, Regulation 3, part A, section II.D.5. 
specifically states that ``any person may request the Division to 
examine a particular source category or activity for exemption from 
APEN or permit requirements'' [emphasis added]. Thus, this provision 
would allow Colorado to add new exemptions from permit requirements 
(which could include part 70 operating permit requirements) without 
requiring EPA review and approval. This is inconsistent with title V 
requirements and must be corrected to include EPA review and approval.
    Comment #5: The commenter objected to EPA's statement that 
Colorado's PROGRAM ``should'' define the meaning of ``prompt'' as used 
in the requirements for reporting deviations from applicable 
requirements, but that an ``acceptable alternative'' is for the State 
to define ``prompt'' in each individual permit. The commenter stated 
that EPA should not deny interim or full approval to any title V 
operating permit program on grounds that it allows for defining 
``prompt'' in the permit and that several earlier interim approval 
notices must be revised.
    EPA Response: EPA stated in the Federal Register notice proposing 
interim approval of the Colorado PROGRAM that it believes that 
``prompt'' should be defined in the PROGRAM regulations for purposes of 
administrative efficiency and clarity. However, EPA agrees that the 
State can define ``prompt'' for deviation reporting in each individual 
permit but cautioned that EPA may veto permits that do not contain 
sufficiently prompt reporting of deviations. This was not identified as 
an approval issue. In addition, it would be inappropriate in this 
notice to comment on how the definition of ``prompt'' was handled in 
notices for other states' part 70 approvals.
    Comment #6: The commenter expressed concern with EPA's statement 
that the contents of risk management plans are not considered an 
applicable requirement at this time but that rulemaking is ongoing and 
changes to the State PROGRAM may be necessary to comply with new or 
supplemental section 112(r) rulemaking. The commenter believes that 
risk management plans should not be subject to permit revision 
procedures under title V. The commenter also supports Colorado's 
position that it will only implement the accidental release prevention 
program under section 112(r) if Federal funds are available and further 
notes that the State has no authority under title V to use permit fees 
to fund risk management plan implementation.
    EPA Response: Guidance issued April 13, 1993 (a memorandum from 
John Seitz entitled: ``Title V Program Approval Criteria for Section 
112 Activities'') states that when general statutory authority to issue 
permits implementing title V is present, but the Attorney General is 
unable to certify explicit legal authority to carry out specific 
section 112 requirements at the time of PROGRAM submittal, the Governor 
may instead submit commitments to adopt and implement applicable 
section 112 requirements. The memo further states that the EPA will 
rely on these commitments in granting part 70 program approvals 
provided the underlying legislative authority would not prevent the 
State from meeting the commitments. Another guidance memorandum issued 
June 24, 1994 (from John Seitz and Jim Makris entitled: ``Relationship 
between the Part 70 Operating Permit Program and section 112(r)'') 
states that the final risk management program rule, which has not been 
promulgated at this time, will likely expand the scope of section 
112(r) applicable requirements for sources. If Colorado's funding 
restriction is incompatible with the final section 112(r) rule, the 
State must eliminate this restriction from their legislation.
    Comment #7: The commenter expressed a general concern that, 
``Although Colorado chooses not to provide explicit variances through 
its operating permit program, EPA should acknowledge that the state 
retains enforcement discretion for any violation of permit 
requirements.''
    EPA Response: As the commenter noted, Colorado does not include 
variances in its PROGRAM. 40 CFR part 70 does not allow states to grant 
variances from title V requirements. EPA recognizes that title V 
permits may include compliance schedules for sources which are out of 
compliance with applicable requirements. However, such measures to 
bring a source into compliance are not the same as variances, which 
normally provide a complete exemption from a requirement. EPA also 
recognizes that Colorado may exercise enforcement discretion when 
addressing permit violations, but such discretion is not unlimited.
    Comment #8: The commenter objected to EPA granting interim approval 
of Colorado's PROGRAM because the Colorado SIP, according to the 
commenter, has not been corrected to conform with the National Ambient 
Air Quality Standard (NAAQS) for PM10. The commenter contends that 
Colorado's SIP is based on total suspended particulate (TSP), which 
they believe has no legal or regulatory basis as an air quality 
standard. The commenter also asserts that EPA's listing of TSP as a 
regulated pollutant in the April 26, 1993 guidance memorandum entitled 
``Definition of Regulated Air Pollutant for Purposes of Title V'' is an 
error and claims the correct regulated pollutant should be total 
particulate, not TSP. Last, the commenter stated that ``enforcing 
policies based on TSP instead of PM10 violates EPA's own regional 
consistency rule'' found in 40 CFR 56.1-56.7. [[Page 4566]] 
    EPA Response: EPA disagrees with the commenter's claim that the 
Colorado SIP has not been revised to conform with the NAAQS for 
PM10. On the contrary, Colorado has developed nonattainment plans 
regulating sources of PM10 for all of the State's PM10 
nonattainment areas designated upon enactment of the 1990 Amendments. 
All of those plans have been approved in at least some form (i.e., 
full, conditional, partial, or limited approval) by EPA. Further, the 
State has updated its nonattainment new source review (NSR) and 
prevention of significant deterioration (PSD) permitting requirements 
to apply to new and modified major sources of PM10, and these 
programs require compliance with the NAAQS (including the PM10 
NAAQS) as a condition of permit issuance. EPA approved these revisions 
to the State's permitting program as conforming to the PM10 NAAQS 
on June 17, 1992 (57 FR 26997).
    However, the State has retained some requirements pertaining to 
sources of TSP, as follows: The State's PSD permitting program applies 
to new and modified major sources of particulate matter (of which TSP 
is a subset), as well as PM10. Regulation of such sources of 
particulate matter is required by the Federal PSD permitting 
regulations. Also, the State regulates minor sources of TSP in its 
minor NSR permitting regulations, and the State regulations still 
include the previous Federal ambient air quality standard for TSP. 
However, on June 24, 1993, when the State adopted the PM10 NAAQS 
into its regulations, the State temporarily suspended the TSP ambient 
standard while the State determines whether to retain, revise, or 
delete the TSP standard. In any case, the State always has the option 
of adopting requirements that are more stringent than the Federal 
requirements, as provided by section 116 of the Act. Further, EPA has, 
in general, approved State provisions that are more stringent than the 
Federal requirements as part of the SIP if such provisions can be 
considered to control NAAQS (i.e., criteria) pollutants or their 
precursors. Colorado's regulation of TSP under the minor NSR program 
and its TSP ambient air quality standard will control PM10 
emissions, since PM10 is a component of TSP. Thus, EPA believes 
there is legal basis for the State retaining some controls on TSP in 
its SIP.
    In regard to the comment that TSP is not a regulated pollutant, the 
commenter is correct. As pointed out in a June 14, 1993 memorandum from 
John Seitz, some EPA guidance documents have incorrectly used the term 
``TSP'' interchangeably with ``particulate matter emissions.'' However, 
TSP is not a regulated air pollutant as defined in 40 CFR 70.2. 
Particulate matter emissions (of which TSP is a component), on the 
other hand, are considered to be regulated pollutants as defined in 40 
CFR 70.2. The EPA notes that Colorado's definition of ``regulated air 
pollutant'' in its part 70 operating permit regulations includes both 
particulate matter and PM10, so there is no flaw relative to this 
issue which would prevent interim approval of Colorado's PROGRAM. If 
Colorado also considers TSP as a regulated pollutant under its PROGRAM, 
EPA would have no concerns with this issue as states' part 70 programs 
are generally allowed to be more stringent than the corresponding 
Federal requirements. Last, EPA does not believe it is violating the 
regional consistency rules in 40 CFR 56.1-56.7 by allowing a State to 
be more stringent than the corresponding Federal requirements. As 
discussed above, EPA believes section 116 of the Act provides states 
with the option of adopting requirements that are more stringent than 
the Federal requirements. In fact, it has generally been a national 
policy to allow state rules to be more stringent than the Federal 
requirements, except in those cases where the Act or the corresponding 
Federal regulations prohibit a state rule from being more stringent. 
(For example, some of the operational flexibility rules in 40 CFR 
70.4(b)(12) are a required element of states' part 70 programs, and 
states do not have the option of prohibiting such flexibility.) Thus, 
in this case, EPA believes it has followed its regional consistency 
rules, and the fact that Colorado's SIP still regulates TSP does not 
impact EPA's ability to grant interim approval to Colorado's PROGRAM.
    Comment #9: The commenter expressed concern that EPA was requiring 
the State of Colorado to authorize automatic annual increases in 
spending to administer the State's PROGRAM. In addition, the commenter 
stated that ``Colorado may, in the future, charge whatever fees it 
wants in whatever combination it wishes, with or without any specific, 
annual fee escalation mechanism, so long as it can run the aspects of 
the Program set forth in Part 70.9(b)(1).''
    EPA Response: EPA disagrees with the commenter's assertion that EPA 
was requiring Colorado to authorize automatic annual increases in 
spending. EPA simply wished to clarify that, regardless of the amount 
of money the State collects to adequately fund all reasonable direct 
and indirect costs of the PROGRAM, the State Legislature retains 
spending authority and must annually authorize the spending of the 
necessary fee revenue by the Permitting Authority. If adequate spending 
authority is not authorized, and the State is therefore unable to fund 
all the reasonable direct and indirect costs of the PROGRAM, the EPA 
would be required to disapprove or withdraw the part 70 PROGRAM, impose 
sanctions and implement a Federal permitting program. This language was 
intended to clarify EPA's position and was not considered an issue for 
interim approval. In addition, EPA agrees with the commenter's 
statement regarding Colorado's authority to levy fees in whatever 
combination it wishes so long as the State can adequately fund its 
PROGRAM.
    Comment #10: The commenter requested that EPA's final interim 
approval of the Colorado PROGRAM clearly reflect OAQPS guidance stating 
that preconstruction permits containing federally enforceable section 
112(g) conditions need not be reopened subsequent to Colorado's 
adoption of EPA's final section 112(g) rule.
    EPA Response: The June 28, 1994 memorandum entitled ``Guidance for 
Initial Implementation of Section 112(g)'' provides that ``if the State 
issues a final, federally enforceable preconstruction permit before the 
final section 112(g) rule is promulgated, the EPA recommends relying on 
that permit rather than requiring the permit to be reopened as a result 
of the final rule, so long as the permit reflects compliance with the 
requirements of section 112(g).'' However, EPA wishes to clarify the 
previous guidance statement by emphasizing that it cannot unequivocally 
declare that all existing federally enforceable preconstruction permits 
will not need to be reopened. EPA does not know which permits, if any, 
will need to be reopened until after the section 112(g) rule is 
promulgated, and this will be a case-by-case determination. Until the 
section 112(g) rule is final, EPA will expect states to implement the 
section 112(g) requirements using the guidance that has been provided.
    Comment #11: The commenter stated that Colorado's PROGRAM allows 
minor New Source Review changes to be processed as minor permit 
modifications under Regulation No. 3, part C, consistent with EPA's 
proposed interim approval criteria published at 59 FR 44572 (August 29, 
1994), and that EPA's proposed interim approval correctly leaves intact 
Colorado's procedures for minor permit modifications. The commenter 
also stated that EPA should not lose sight of the importance of this 
flexibility [[Page 4567]] between the date of interim approval of 
Colorado's PROGRAM and final PROGRAM approval. In addition the 
commenter believes that classifying minor new source review changes as 
title I modifications would have disastrous consequences for industry.
    EPA Response: EPA does not consider this an adverse comment 
regarding approval of the Colorado PROGRAM since Colorado has submitted 
a SIP revision to their new source review regulations (Regulation 3, 
part B) which will enable minor modifications to be processed under the 
title V minor permit modification procedures. However, the commenter 
should note that EPA has not yet acted on this SIP revision and 
therefore, it is not currently available. EPA expects to approve this 
SIP revision before processing Colorado's full PROGRAM approval. In 
addition, the broader issue of whether or not minor new source review 
changes should be classified as title I modifications must be addressed 
at the National level.
    Comment #12: The commenter submitted comments it had previously 
filed on the proposed part 70 rule and stated that it objected to the 
interim approval of the Colorado PROGRAM for the same reasons it had 
objected to the part 70 rule itself.
    EPA Response: EPA believes the appropriate forum for pursuing 
objections to the legal validity of the part 70 rule is through a 
petition for review of the rule brought in the D.C. Circuit Court of 
Appeals. EPA notes that this commenter has filed such a petition. 
However, unless and until the part 70 rule is revised, EPA must 
evaluate programs according to the rule that is in effect.

C. Final Action

    The EPA is promulgating interim approval of the PROGRAM submitted 
by the State of Colorado on November 5, 1993. The State must make the 
following changes to receive full PROGRAM approval:

    (1) The State must revise its administrative process in section 
II.D.5 of part A of Regulation 3, for adding additional exemptions to 
the insignificant activities list, to require approval by the EPA of 
any new exemptions before such exemptions can be utilized by a source.
    (2) The State must revise the Colorado Air Quality Control Act (25-
7-109.6(5)) to remove the condition that an accidental release 
prevention program pursuant to section 112(r) of the Act will only be 
implemented if Federal funds are available.

    Refer to the technical support document accompanying this 
rulemaking for a detailed explanation of each PROGRAM deficiency.
    In Colorado's part 70 program submission, the State did not seek 
part 70 PROGRAM approval within the exterior boundaries of Indian 
Reservations in Colorado. The scope of Colorado's part 70 program 
approved in this notice applies to all part 70 sources (as defined in 
the approved PROGRAM) within the State, except the following: any 
sources of air pollution located in ``Indian Country,'' as defined in 
18 U.S.C. 1151, including the Southern Ute Indian Reservation and the 
Ute Mountain Ute Indian Reservation, or any other sources of air 
pollution over which an Indian Tribe has jurisdiction. See, e.g., 59 FR 
55813, 55815-55818 (Nov. 9, 1994). The term ``Indian Tribe'' is defined 
under the Act as ``any Indian Tribe, band, nation, or other organized 
group or community, including any Alaska Native village, which is 
federally recognized as eligible for the special programs and services 
provided by the United States to Indians because of their status as 
Indians.'' See section 302(r) of the CAA; see also 59 FR 43955, 43962 
(Aug. 25, 1994); 58 FR 54364 (Oct. 21, 1993).
    In not extending the scope of Colorado's approved PROGRAM to 
sources located in ``Indian Country,'' EPA is not making a 
determination that the State either has adequate jurisdiction or lacks 
jurisdiction over such sources. Should the State of Colorado choose to 
seek PROGRAM approval within ``Indian Country,'' it may do so without 
prejudice. Before EPA would approve the State's part 70 PROGRAM for any 
portion of ``Indian Country,'' EPA would have to be satisfied that the 
State has authority, either pursuant to explicit Congressional 
authorization or applicable principles of Federal Indian law, to 
enforce its laws against existing and potential pollution sources 
within any geographical area for which it seeks program approval, that 
such approval would constitute sound administrative practice, and that 
those sources are not subject to the jurisdiction of any Indian Tribe.
    This interim approval, which may not be renewed, extends until 
February 24, 1997. During this interim approval period, the State of 
Colorado is protected from sanctions, and EPA is not obligated to 
promulgate, administer and enforce a Federal operating permits program 
in the State of Colorado. 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 the effective date of this interim approval, as does the 3-
year time period for processing the initial permit applications.
    If the State of Colorado fails to submit a complete corrective 
PROGRAM for full approval by August 24, 1996, EPA will start an 18-
month clock for mandatory sanctions. If the State of Colorado then 
fails to submit a corrective PROGRAM that EPA finds complete before the 
expiration of that 18-month period, EPA will be required to apply one 
of the sanctions in section 179(b) of the Act, which will remain in 
effect until EPA determines that the State of Colorado has corrected 
the deficiency by submitting a complete corrective PROGRAM. Moreover, 
if the Administrator finds a lack of good faith on the part of the 
State of Colorado, both sanctions under section 179(b) will apply after 
the expiration of the 18-month period until the Administrator 
determined that the State of Colorado had come into compliance. In any 
case, if, six months after application of the first sanction, the State 
of Colorado still has not submitted a corrective PROGRAM that EPA has 
found complete, a second sanction will be required.
    If EPA disapproves the State of Colorado's complete corrective 
PROGRAM, EPA will be required to apply one of the section 179(b) 
sanctions on the date 18 months after the effective date of the 
disapproval, unless prior to that date the State of Colorado has 
submitted a revised PROGRAM and EPA has determined that it corrected 
the deficiencies that prompted the disapproval. Moreover, if the 
Administrator finds a lack of good faith on the part of the State of 
Colorado, both sanctions under section 179(b) shall apply after the 
expiration of the 18-month period until the Administrator determines 
that the State of Colorado has come into compliance. In all cases, if, 
six months after EPA applies the first sanction, the State of Colorado 
has not submitted a revised PROGRAM that EPA has determined corrects 
the deficiencies, a second sanction is required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the expiration of an interim approval period if the 
State of Colorado has not timely submitted a complete corrective 
PROGRAM or EPA has disapproved its submitted corrective PROGRAM. 
Moreover, if EPA has not granted full approval to the Colorado PROGRAM 
by the expiration of this interim approval and that expiration 
[[Page 4568]] occurs after November 15, 1995, EPA must promulgate, 
administer and enforce a Federal permits program for the State of 
Colorado upon interim approval expiration.
    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 under section 
112(l)(5) and 40 CFR 63.91 of the State's program 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.

III. Administrative Requirements

A. Docket

    Copies of the State's submittal and other information relied upon 
for the final interim approval, including public comments received and 
reviewed by EPA on the proposal, are maintained in a docket 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: January 13, 1995.
Jack McGraw,
Acting Regional Administrator.

    Part 70, chapter I, title 40 of the Code of Federal Regulations 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 
Colorado in alphabetical order to read as follows:

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

* * * * *
    Colorado
    (a) Colorado Department Health-Air Pollution Control Division: 
submitted on November 5, 1993; effective on [date 30 days after date of 
publication]; interim approval expires February 24, 1997.
    (b) [Reserved]
 * * * * *
[FR Doc. 95-1736 Filed 1-23-95; 8:45 am]
BILLING CODE 6560-50-F