[Federal Register Volume 60, Number 30 (Tuesday, February 14, 1995)]
[Proposed Rules]
[Pages 8335-8341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3659]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[MT-001; FRL-5155-3]


Clean Air Act Proposed Interim Approval, or in the Alternative 
Proposed Disapproval, of Operating Permits Program; State of Montana

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the Operating Permits 
Program submitted by the State of Montana 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. In the alternative, EPA proposes disapproval of the Montana 
Operating Permits Program if the corrective actions necessary for final 
interim PROGRAM approval are not completed and submitted to EPA prior 
to the statutory deadline.

DATES: Comments on this proposed action must be received in writing by 
March 16, 1995.

ADDRESSES: Comments should be addressed to Laura Farris at the Region 8 
address. Copies of the State's submittal and other supporting 
information used in developing the proposed rule are available for 
inspection during normal business hours at the following location: U.S. 
Environmental Protection Agency, Region 8, 999 18th Street, suite 500, 
Denver, Colorado 80202.

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

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the 1990 Clean Air Act Amendments 
(sections 501-507 of the Clean Air Act (``the Act'')), EPA has 
promulgated rules which define the minimum elements of an approvable 
State operating permits program and the corresponding standards and 
procedures by which the EPA will approve, oversee, and withdraw 
approval of State operating permits programs (see 57 FR 32250 (July 21, 
1992)). These rules are codified at 40 Code of Federal Regulations 
(CFR) part 70 (part 70). Title V requires States to develop, and submit 
to EPA, programs for issuing these operating permits to all 
[[Page 8336]] major stationary sources and to certain other sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within 1 year after receiving the submittal. The EPA's 
program review occurs pursuant to section 502 of the Act and the part 
70 regulations, which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, EPA may grant the program interim approval for 
a period of up to 2 years. If EPA has not fully approved a program by 2 
years after the November 15, 1993 date, or by the end of an interim 
program, it must establish and implement a Federal program.

B. Federal Oversight and Sanctions

    If EPA were to finalize this proposed interim approval, it would 
extend for two years following the effective date of final interim 
PROGRAM approval, and could not be renewed. During the interim approval 
period, the State of Montana would be protected from sanctions, and EPA 
would not be obligated to promulgate, administer and enforce a Federal 
permits program for the State of Montana. 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 interim approval, as 
does the 3-year time period for processing the initial permit 
applications.
    Following final interim PROGRAM approval, if the State of Montana 
failed to submit a complete corrective program for full approval by the 
date 6 months before expiration of the interim approval, EPA would 
start an 18-month clock for mandatory sanctions. If the State of 
Montana then failed to submit a corrective program that EPA found 
complete before the expiration of that 18-month period, EPA would be 
required to apply one of the sanctions in section 179(b) of the Act, 
which would remain in effect until EPA determined that the State of 
Montana had corrected the deficiency by submitting a complete 
corrective program. Moreover, if the Administrator found a lack of good 
faith on the part of the State of Montana, both sanctions under section 
179(b) would apply after the expiration of the 18-month period until 
the Administrator determined that the State of Montana had come into 
compliance. In any case, if, six months after application of the first 
sanction, the State of Montana still had not submitted a corrective 
program that EPA found complete, a second sanction would be required.
    If, following final interim PROGRAM approval, EPA were to 
disapprove the State's complete corrective program, EPA would 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 Montana had submitted a revised program and EPA 
had determined that it corrected the deficiencies that prompted the 
disapproval. Moreover, if the Administrator found a lack of good faith 
on the part of the State of Montana, both sanctions under section 
179(b) would apply after the expiration of the 18-month period until 
the Administrator determined that the State of Montana had come into 
compliance. In all cases, if, six months after EPA applied the first 
sanction, the State of Montana had not submitted a revised program that 
EPA had determined corrected the deficiencies that prompted 
disapproval, a second sanction would be required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the end of an interim approval period if a State has not 
timely submitted a complete corrective program or EPA has disapproved a 
submitted corrective program. Moreover, if EPA has not granted full 
approval to a State program by the expiration of an interim approval 
and that expiration occurs after November 15, 1995, EPA must 
promulgate, administer and enforce a Federal permits program for that 
State upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials
    The Governor of Montana submitted an administratively complete 
title V Operating Permit Program (PROGRAM) for the State of Montana on 
March 29, 1994. EPA deemed the PROGRAM administratively complete in a 
letter to the Governor dated May 12, 1994. The PROGRAM submittal 
includes a legal opinion from the Attorney General of Montana stating 
that the laws of the State provide adequate legal authority to carry 
out all aspects of the PROGRAM, and a description of how the State 
intends to implement the PROGRAM. The submittal additionally contains 
evidence of proper adoption of the PROGRAM regulations, permit 
application forms, a data management system and a permit fee 
demonstration.
2. Regulations and Program Implementation
    The Montana PROGRAM, including the operating permit regulation 
(Sub-Chapter 20, Secs. 16.8.2001 through 16.8.2025, inclusive, of the 
Administrative Rules of Montana), substantially meets the requirements 
of 40 CFR parts 70.2 and 70.3 with respect to applicability; parts 
70.4, 70.5, and 70.6 with respect to permit content including 
operational flexibility; part 70.5 with respect to complete application 
forms and criteria which define insignificant activities; part 70.7 
with respect to public participation and minor permit modifications; 
and part 70.11 with respect to requirements for enforcement authority.
    Section 16.8.2006(3) of Sub-Chapter 20 provides, in part, that 
``Insignificant emission units need not be addressed in an application 
for an air quality operating permit, except that the application must 
include a list of such insignificant emission units and emissions from 
insignificant emission units must be included in emission inventories 
and are subject to assessment of permit fees.'' The term 
``insignificant emissions unit'' is defined in Sec. 16.8.2002(22)(a) of 
Sub-Chapter 20 as ``any activity or emissions unit located within a 
source that (i) has a potential to emit less than 15 tons per year of 
any pollutant, other than a hazardous air pollutant listed pursuant to 
sec. 7412(b) of the FCAA or lead; (ii) has a potential to emit of less 
than 500 pounds per year of lead; (iii) does not have a potential to 
emit hazardous air pollutants listed pursuant to sec. 7412(b) in any 
amount; and (iv) is not regulated by an applicable requirement.'' The 
15 ton per year threshold is considered by EPA to be a PROGRAM 
deficiency that must be addressed prior to full PROGRAM approval and is 
discussed in more detail below.
    Section 70.6(a)(3)(iii)(B) of EPA's operating permit regulations 
provides that each permit shall require ``prompt reporting of 
deviations from permit requirements, including those attributable to 
upset conditions as defined in the permit, the probable cause of such 
deviations, and any corrective actions or preventive measures taken.'' 
Under Sec. 16.8.2010(3)(c) of Sub-Chapter 20 of Montana's regulations, 
reporting is considered ``prompt'' if made at least every six months as 
part of the routine reporting requirements and, if applicable, in 
accordance with the malfunction reporting requirements under 
Sec. 16.8.705 of Subchapter 7, unless [[Page 8337]] otherwise specified 
in an applicable requirement. However, EPA's position is that reporting 
only once every six months is not sufficiently ``prompt'' to allow for 
protection of public health and safety and to provide a forewarning of 
potential problems. Usually, reporting within two to ten days should be 
sufficient for these purposes, although with more serious permit 
deviations, earlier reporting may be necessary. Only for sources with a 
low level of excess emissions, would it be appropriate to allow more 
than ten days to elapse before reporting. EPA may veto state permits 
that do not require appropriately prompt reporting.
    Montana has the authority to issue a variance from emission 
limitations. The Clean Air Act of Montana, Section 75-2-212, Montana 
Code Annotated (MCA), provides that the State may grant a variance if 
``(a) the emissions occurring or proposed to occur do not constitute a 
danger to public health or safety; and (b) compliance with the rules 
from which exemption is sought would produce hardship without equal or 
greater benefits to the public.'' EPA regards Montana's variance 
provision as wholly external to the PROGRAM submitted for approval 
under part 70, and consequently is proposing to take no action on this 
provision of State law. The EPA has no authority to approve provisions 
of State law, such as the variance provision referred to, which are 
inconsistent with the Act. The EPA does not recognize the ability of a 
permitting authority to grant relief from the duty to comply with a 
Federally enforceable part 70 permit, except where such relief is 
granted through procedures allowed by part 70. If the State uses its 
variance provision strictly to establish a compliance schedule for a 
non-complying source that will be incorporated into a title V permit, 
then EPA would consider this an acceptable use of a variance provision. 
However, the routine process for establishing a compliance schedule is 
through appropriate enforcement action. The EPA reserves the right to 
enforce the terms of the part 70 permit where the permitting authority 
purports to grant relief from the duty to comply with a part 70 permit 
in a manner inconsistent with part 70 procedures.
    Comments noting deficiencies in the Montana PROGRAM were sent to 
the State in a letter dated October 3, 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. In a letter dated October 20, 1994 the State 
committed to address the deficiencies that require corrective action 
prior to interim PROGRAM approval by January 20, 1995.
    Areas in which the Montana PROGRAM is deficient and require 
corrective action prior to final interim PROGRAM approval are as 
follows: (1) Section 16.8.2004(3) of Sub-Chapter 20 allows the State to 
exempt sources from the requirement to obtain an air quality operating 
permit by establishing Federally enforceable limitations which limit 
the source's potential to emit. However, the State's rules do not 
describe the process which will be used to create these limits. Prior 
to interim PROGRAM approval, the State must clarify how Federally 
enforceable limits will be created to limit a source's potential to 
emit, and verify its authority to create such limits. If the State 
plans to create Federally enforceable limits through title V operating 
permits, such permits must go through all of the title V public 
participation requirements, including affected State review, 45-day EPA 
review period and EPA veto authority. (2) Section 16.8.2008(2)(j) of 
Sub-Chapter 20 states that the State's decision regarding issuance, 
renewal, revision, denial, revocation, reissuance, or termination of a 
permit is not effective until 30 days have elapsed from the date of the 
decision, and that the decision may be appealed to the board by filing 
a request for hearing within 30 days after the date of the decision. 
EPA interprets this language to mean that the 30-day period for making 
appeals to the board would occur after EPA's 45-day review/approval 
period for the proposed permit. If this is the case, any permits 
appealed to the board that are changed must be submitted to EPA for 
additional review. Prior to interim PROGRAM approval, the State must 
clarify whether the appeal process on the State's decisions regarding 
permit issuance, renewal, revision, denial, revocation, reissuance, or 
termination occurs before or after EPA's 45-day review/approval period. 
If the appeal process follows EPA's review/approval period, then 
language must be added to the State's permitting regulation to ensure 
that permits that are changed after appeal to the board are submitted 
to EPA for additional review. (3) Section 16.8.2008(2)(a) allows the 
State to terminate, or revoke and reissue, permits for continuing and 
substantial violations, but does not provide the full authority under 
section 502(b)(5)(D) of the Act which requires that state permit 
programs have authority to ``terminate, modify, revoke and reissue 
permits for cause.'' Prior to interim PROGRAM approval, the State must 
clarify that it has the authority to ``terminate, modify, revoke and 
reissue permits for cause'' pursuant to section 502(b)(5)(D) of the 
Act. (4) Section 16.8.2021(1)(c) of Sub-Chapter 20 states that a 
significant modification includes ``every significant relaxation of 
permit reporting or recordkeeping terms or conditions.'' Section 
70.7(e)(4)(i) of the Federal permitting regulation requires that any 
relaxation of reporting or recordkeeping permit terms be processed as a 
significant modification. Prior to interim PROGRAM approval, the State 
must provide an Attorney General's opinion that the language in 
Sec. 16.8.2021(1)(c) of Sub-Chapter 20 regarding significant 
modifications will be interpreted as ``every relaxation of reporting or 
recordkeeping permit terms'', and prior to full PROGRAM approval, the 
word ``significant'' must be removed from this regulatory language.
    Areas in which the Montana PROGRAM is deficient and require 
corrective action prior to full PROGRAM approval are as follows: (1) 
Section 16.8.2002(1)(d) of Sub-Chapter 20 is part of the definition of 
administrative permit amendment and allows for the ``department's 
discretion'' in determining whether or not a change in monitoring or 
reporting requirements would be as stringent as current monitoring or 
reporting requirements. Changes in monitoring or reporting requirements 
must be processed through either the minor permit modification 
procedures or the significant permit modification procedures, unless 
the change requires more frequent monitoring or reporting, in which 
case it can be processed through the administrative permit amendment 
procedures. This portion of Montana's definition does not meet the 
criteria of an administrative permit amendment listed in 
Sec. 70.7(d)(1)(iii) of the Federal permitting regulation. Prior to 
full PROGRAM approval, the State must delete Sec. 16.8.2002(1)(d) of 
Sub-Chapter 20, which allows for the ``department's discretion'' in 
determining whether or not a change in monitoring or reporting 
requirements would be as stringent as current monitoring or reporting 
requirements.
    (2) Section 16.8.2002(1)(f) of Sub-Chapter 20 is part of the 
definition of administrative permit amendment and allows the State to 
determine if other types of permit changes not listed in the definition 
of administrative permit amendment can be incorporated into a permit 
through the administrative permit amendment process. Section 
70.7(d)(1)(vi) of the Federal permitting [[Page 8338]] regulation 
requires that such determinations be made by the Administrator of EPA 
and be similar to those changes listed in Sec. 70.7(d)(1)(i)-(iv) of 
the Federal permitting regulation. This provision must be changed prior 
to full PROGRAM approval to allow the Administrator of EPA (or EPA and 
the State) to determine if changes not included in the definition of 
administrative permit amendment can be processed through the 
administrative permit amendment process.
    (3) The definition of ``insignificant emissions unit'' in 
Sec. 16.8.2002(22)(a) of Sub-Chapter 20 includes an emission threshold 
of 15 tons per year of any pollutant other than a hazardous air 
pollutant. EPA does not consider this to be a reasonable level from 
which to exempt emissions units from title V operating permit 
requirements. For other State title V programs, EPA has proposed to 
accept, as sufficient for full approval, emission levels for 
insignificant activities of 2 tons per year of regulated air pollutants 
and the lesser of 1000 pounds per year, section 112(g) de minimis 
levels, or other title I significant modification levels for HAPs and 
other toxics (40 CFR 52.21(b)(23)(i)). EPA believes that these levels 
are sufficiently below applicability thresholds for most applicable 
requirements to assure that no unit potentially subject to an 
applicable requirement is left off a part 70 application and are 
consistent with current permitting thresholds for the State under 
consideration here. EPA is requesting comment on the appropriateness of 
these emission levels for determining insignificant activities in this 
State. This request for comment is not intended to restrict the ability 
of the State to propose and EPA to approve other emission levels if the 
State demonstrates that such alternative emission levels are 
insignificant compared to the level of emissions from and types of 
units that are permitted or subject to applicable requirements. Prior 
to full PROGRAM approval, the State must lower the emissions cap for 
defining ``insignificant emissions units'' to assure they will not 
encompass activities that trigger applicable requirements. If the State 
defines insignificant activity levels greater than those suggested, a 
demonstration must be made to show why such levels are, in fact, 
insignificant.
    (4) Section 16.8.2002(24)(ii) of Sub-chapter 20 defines ``non-
Federally enforceable requirement'' to include any term contained in a 
preconstruction permit issued under Sub-Chapters 9, 11, 17, or 18 that 
is not Federally enforceable. However, everything contained in a 
preconstruction permit issued under these Sub-Chapters (which currently 
are, or soon will be, included in the State's SIP) is considered to be 
Federally enforceable. Prior to full PROGRAM approval this language 
must be revised or deleted.
    (5) Section 16.8.2008 of Sub-Chapter 20 which lists the permit 
content requirements does not require a severability clause consistent 
with Sec. 70.6(a)(5) of the Federal permitting regulation. Prior to 
full PROGRAM approval, the State must include a severability clause in 
Sub-Chapter 20 consistent with Sec. 70.6(a)(5) of the Federal 
permitting regulation.
    (6) Section IX.C.2 of the checklist that was part of the PROGRAM 
submittal regarding the implementation of the enhanced monitoring 
requirements of section 114(a)(3) of the Act states that there are no 
impediments to using any monitoring data to determine compliance and 
for direct enforcement. However, the State has incorporated by 
reference the Federal new source performance standards (NSPS) and 
national emissions standards for HAPs (NESHAPs) in 40 CFR parts 60 and 
61 into its SIP-approved regulations, which provide that compliance can 
be determined only by performance tests (see 40 CFR 60.11(a) and 40 CFR 
61.12(a)).
    Prior to full PROGRAM approval, the State must provide an Attorney 
General's opinion verifying the State's authority to use any monitoring 
data to determine compliance and for direct enforcement. If the State 
does not have such authority, then the State's SIP-approved regulations 
must be revised prior to full PROGRAM approval to provide authority to 
use any monitoring data to determine compliance and for direct 
enforcement.
    (7) The Attorney General's Opinion regarding the State's authority 
to terminate permits is unclear. MCA 75-2-211(1) and 217(1) refer to 
``issuance, modification, suspension, revocation, and renewal'' of 
permits, but not ``termination.'' Prior to full PROGRAM approval, the 
State must provide an Attorney General's interpretation that Montana's 
statutory authority extends to ``terminating'' permits.
    (8) The PROGRAM submittal contained a letter to Douglas M. Skie 
dated February 28, 1994 certifying the State's authority to implement 
section 112 of the Act. The letter discusses the State's authority to 
require permit applications from sources subject to section 112(j) of 
the Act, but does not address the State's ability to make case-by-case 
MACT determinations. Prior to full PROGRAM approval, the State must 
certify its ability to make case-by-case MACT determinations pursuant 
to section 112(j) of the Act.
    (9) The State's February 28, 1994 letter to EPA also discusses the 
State's authority to implement section 112(r) of the Act, but does not 
address the State's ability to require annual certifications from part 
70 sources as to whether their risk management plans (RMPs) are being 
properly implemented, or provide a compliance schedule for sources that 
fail to submit the required RMP. Prior to full PROGRAM approval, the 
State must certify its ability to require annual certifications from 
part 70 sources regarding proper implementation of their RMPs and to 
provide a compliance schedule for sources that fail to submit the 
required RMP.
    Refer to the Technical Support Document accompanying this 
rulemaking for a detailed explanation of each comment and the 
corrective actions required of the State.
3. Permit Fee Demonstration
    The Montana PROGRAM includes a fee structure that collects in the 
aggregate fees that are below the presumptive minimum set in part 70. 
Therefore, it was necessary for the State to include a permit fee 
demonstration in its PROGRAM submittal to demonstrate that the title V 
fee structure would collect sufficient fees to cover the reasonable 
direct and indirect costs of developing and administering the PROGRAM. 
The permit fee demonstration included a workload analysis which 
estimated the annual cost of running the PROGRAM to be $585,130 for 
fiscal year 1994, increasing to $849,705 for fiscal year 1995. The fee 
structure for fiscal year 1994, based on the previous year's emission 
inventory, included a fee of $8.55 per ton for particulates, sulfur 
dioxide and lead; $2.14 per ton for nitrogen oxides and volatile 
organic compounds; with a minimum fee of $250 per source. These fees 
are projected to increase to $11.75 and $2.94 per ton, respectively, 
for fiscal year 1995, and the State anticipates adding a fee for HAPs 
in the future. After careful review, the State has determined that 
these fees would support the Montana PROGRAM costs as required by 
section 70.9(a) of the Federal operating permitting regulation. Upon 
review of the State's permit fee demonstration, the EPA noted the 
following concerns:
    (1) Although the State has the authority to assess and collect 
annual permit fees in an amount sufficient to cover all reasonable 
direct and indirect costs of the PROGRAM, the State Legislature must 
appropriate the money [[Page 8339]] to operate the PROGRAM every 
biennium. If an adequate appropriation is not made, and the State is 
not able to fund all the 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.
    (2) EPA was unable to determine if sufficient fees will be 
available to fund the PROGRAM due to deficiencies in the State's Permit 
Fee Demonstration. The State agreed to address these deficiencies in a 
letter to EPA dated October 20, 1994 and submit a revised Permit Fee 
Demonstration to EPA prior to final interim PROGRAM approval.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority and/or Commitments for Section 112 Implementation
    Montana has demonstrated in its PROGRAM submittal adequate legal 
authority to implement and enforce all section 112 requirements, with 
the exception of the deficiencies noted above, through the title V 
permit. This legal authority is contained in Montana's enabling 
legislation and in regulatory provisions defining ``applicable 
requirements'' and stating that the permit must incorporate all 
applicable requirements. EPA has determined that this legal authority 
is sufficient to allow Montana to issue permits that assure compliance 
with all section 112 requirements, and to carry out all section 112 
activities, contingent upon the State completing the above noted 
corrective actions related to section 112.
    For further rationale on this interpretation, please refer to the 
Technical Support Document accompanying this rulemaking and the April 
13, 1993 guidance memorandum titled ``Title V Program Approval Criteria 
for Section 112 Activities,'' signed by John Seitz.
    b. Implementation of 112(g) Upon Program Approval
    As a condition of approval of the part 70 PROGRAM, Montana is 
required to implement section 112(g) of the Act from the effective date 
of the part 70 PROGRAM. Imposition of case-by-case determinations of 
maximum achievable control technology (MACT) or offsets under section 
112(g) will require the use of a mechanism for establishing Federally 
enforceable restrictions on a source-specific basis. The EPA is 
proposing to approve Montana's preconstruction permitting program found 
in Sub-Chapter 11, Secs. 16.8.1101 through 16.8.1120, under the 
authority of title V and part 70 solely for the purpose of implementing 
section 112(g) during the transition period between title V approval 
and adoption of a State rule implementing EPA's section 112(g) 
regulations. EPA believes this approval is necessary so that Montana 
has a mechanism in place to establish Federally enforceable 
restrictions for section 112(g) purposes from the date of part 70 
approval. Section 112(l) provides statutory authority for approval for 
the use of State air programs to implement section 112(g). Title V and 
section 112(g) provide authority for this limited approval because of 
the direct linkage between implementation of section 112(g) and title 
V. The scope of this approval is narrowly limited to section 112(g), 
and does not confer or imply approval for purposes of any other 
provision under the Act. If Montana does not wish to implement section 
112(g) through its preconstruction permit program and can demonstrate 
that an alternative means of implementing section 112(g) exists, the 
EPA may, in the final action approving Montana's PROGRAM, approve the 
alternative instead. To the extent Montana does not have the authority 
to regulate HAPs through existing State law, the State may disallow new 
construction or modifications during the transition period.
    This approval is for an interim period only, until such time as the 
State is able to adopt regulations consistent with any regulations 
promulgated by EPA to implement section 112(g). Accordingly, EPA is 
proposing to limit the duration of this approval to a reasonable time 
following promulgation of section 112(g) regulations so that Montana, 
acting expeditiously, will be able to adopt regulations consistent with 
the section 112(g) regulations. The EPA is proposing here to limit the 
duration of this approval to 12 months following promulgation by EPA of 
section 112(g) regulations. Comment is solicited on whether 12 months 
is an appropriate period considering Montana's procedures for adoption 
of Federal regulations.
    c. Program for Straight Delegation of Section 112 Standards
    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 General Provisions Subpart A and standards as 
promulgated by EPA as they apply to sources covered by the part 70 
Program, as well as non-part 70 sources. Section 112(l)(5) requires 
that the State's PROGRAM contain adequate authorities, adequate 
resources for implementation, and an expeditious compliance schedule, 
which are also requirements under part 70. Therefore, the EPA is also 
proposing to grant approval under section 112(l)(5) and 40 CFR 63.91 of 
the State's program for receiving delegation of section 112 standards 
that are unchanged from the Federal standards as promulgated. Montana 
has informed EPA that it intends to accept delegation of section 112 
standards through incorporation by reference or case-by-case 
rulemaking. This program applies to both existing and future standards.
    The radionuclide NESHAP is a section 112 regulation and therefore, 
also an applicable requirement under the State PROGRAM. Sources which 
are currently defined as part 70 sources and emit radionuclides are 
subject to Federal radionuclide standards. Additionally, sources which 
are not currently part 70 sources may be defined as major sources under 
forthcoming Federal radionuclide regulations. The EPA will work with 
the State in the development of its radionuclide program to ensure that 
permits are issued in a timely manner.
    d. Program for Implementing Title IV of the Act
    Montana's PROGRAM contains adequate authority to issue permits 
which reflect the requirements of title IV of the Act, and commits to 
adopt the rules and requirements promulgated by EPA to implement an 
acid rain program through the title V permit.

B. Options for Approval/Disapproval and Implications

    The EPA is proposing to grant interim approval to the operating 
permits program submitted by the State of Montana on March 29, 1994. If 
promulgated, the State must complete the following corrective actions, 
as discussed above, to receive final interim PROGRAM approval: (1) The 
State must clarify how the Federally enforceable limits allowed under 
Sec. 16.8.2004(3) of Sub-Chapter 20 will be created to limit a source's 
potential to emit, and verify its authority to create such limits. If 
the State plans to create these Federally enforceable limits through 
the title V PROGRAM, such permits must go through all of the title V 
public participation requirements, including affected State review, 45-
day EPA review period and EPA veto authority; (2) The State must 
clarify whether the appeal process in Sec. 16.8.2008(2)(j) of Sub-
Chapter 20 on the State's decisions regarding permit issuance, renewal, 
revision, denial, revocation, reissuance, or termination occurs before 
or after EPA's 45-day review/approval period. If the appeal process 
follows EPA's review/approval period, then additional language must be 
added to the State's [[Page 8340]] permitting regulation to ensure that 
permits that are changed after appeal to the board are submitted to EPA 
for additional review; (3) The State must clarify that it has the 
authority to ``terminate, modify, revoke and reissue permits for 
cause'' pursuant to section 502(b)(5)(D) of the Act; (4) The State must 
provide an Attorney General's opinion that the language in 
Sec. 16.8.2021(1)(c) of Sub-Chapter 20 regarding significant 
modifications will be interpreted as ``every relaxation of reporting or 
recordkeeping permit terms.''
    The State must complete the following corrective actions, as 
discussed above, to receive full PROGRAM approval: (1) The word 
``significant'' must be removed from the language in 
Sec. 16.8.2021(1)(c) of Sub-Chapter 20; (2) The State must delete 
Sec. 16.8.2002(1)(d) of Sub-Chapter 20 that allows for the 
``department's discretion'' in determining whether or not a change in 
monitoring or reporting requirements would be as stringent as current 
monitoring or reporting requirements; (3) Section 16.8.2002(1)(f) of 
Sub-Chapter 20 must be changed to allow the Administrator of EPA (or 
EPA and the State) to determine if changes not included in the 
definition of ``administrative permit amendment'' can be processed 
through the administrative permit amendment process; (4) The State must 
lower the emissions cap for defining ``insignificant emissions units'' 
in Sec. 16.8.2002(22)(a) of Sub-Chapter 20 to assure they will not 
encompass activities that trigger applicable requirements. If the State 
defines insignificant activity levels greater than those suggested, a 
demonstration must be made to show why such levels are, in fact, 
insignificant; (5) The language in Sec. 16.8.2002(24)(ii) of Sub-
Chapter 20 which defines ``non-Federally enforceable requirement'' must 
be revised or deleted to avoid the implication that terms contained in 
a preconstruction permit issued under Sub-Chapters 9, 11, 17, or 18 are 
not Federally enforceable; (6) The State must include a severability 
clause in Sec. 16.8.2008 of Sub-Chapter 20 consistent with 
Sec. 70.6(a)(5) of the Federal permitting regulation; (7) The State 
must provide an Attorney General's opinion verifying the State's 
authority to use any monitoring data to determine compliance and for 
direct enforcement. If the State does not have such authority, then the 
State's SIP-approved regulations must be revised to provide authority 
to use any monitoring data to determine compliance and for direct 
enforcement; (8) The State must provide an Attorney General's 
interpretation that Montana's statutory authority under MCA 75-2-211(1) 
and 217(1) extends to ``terminating'' permits; (9) The State must 
certify its ability to make case-by-case MACT determinations for 
sources subject to section 112(j) of the Act; (10) The State must 
certify its ability to require annual certifications from part 70 
sources regarding proper implementation of their section 112(r) RMPs 
and to provide a compliance schedule for sources that fail to submit 
the required RMP.
    Evidence of these corrective actions for full PROGRAM approval must 
be submitted to EPA within 18 months of EPA's interim approval of the 
Montana PROGRAM.
    The scope of Montana's part 70 PROGRAM that EPA proposes to approve 
in this notice would apply to all part 70 sources (as defined in the 
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 Northern Cheyenne, Rocky Boys, Blackfeet, Crow, Flathead, 
Fort Belknap, and Fort Peck Indian Reservations, or any other sources 
of air pollution over which an Indian Tribe has jurisdiction. See, 
e.g., 59 FR 55813, 55815-18 (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 proposing not to extend the scope of Montana's part 70 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 Montana 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 for a 
period of up to 2 years. During the interim approval period, the State 
is protected from sanctions for failure to have a program, and EPA is 
not obligated to promulgate a Federal permits program in the State. 
Permits issued under a program with interim approval have full standing 
with respect to part 70, and the 1-year time period for submittal of 
permit applications by subject sources begins upon interim approval, as 
does the 3-year time period for processing the initial permit 
applications.
    The EPA is proposing to disapprove in the alternative the Montana 
PROGRAM if the specified corrective actions for final interim PROGRAM 
approval are not completed and submitted to EPA prior to EPA's 
statutory deadline for acting on Montana's title V submittal. If 
promulgated, this disapproval would constitute a disapproval under 
section 502(d) of the Act (see generally 57 FR 32253-54). As provided 
under section 502(d)(1) of the Act, Montana would have up to 180 days 
from the date of EPA's notification of disapproval to the Governor of 
Montana to revise and resubmit the PROGRAM.
    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 proposing to grant approval under 
section 112(l)(5) of the Act 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 
applies to sources covered by the part 70 program as well as non part 
70 sources.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of the State's submittal and other information 
relied upon for the proposed interim approval are contained in a docket 
maintained at the EPA Regional Office. The docket is an organized and 
complete file of all the information submitted to, or otherwise 
considered by, EPA in the development [[Page 8341]] of this proposed 
interim approval. The principal purposes of the docket are:
    (1) To allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process, and
    (2) To serve as the record in case of judicial review. The EPA will 
consider any comments received by March 16, 1995.

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.

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

    Dated: February 3, 1995.
Jack W. McGraw,
Acting Regional Administrator.
[FR Doc. 95-3659 Filed 2-13-95; 8:45 am]
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