[Federal Register Volume 60, Number 44 (Tuesday, March 7, 1995)]
[Proposed Rules]
[Pages 12521-12525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5517]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5166-4]


Clean Air Act Proposed Approval Of Operating Permits Program; 
State of Nebraska and the City of Omaha

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes full approval of the Operating Permit 
Programs submitted by the state of Nebraska and city of Omaha for the 
purpose of complying with Federal requirements which mandate that 
states develop, and submit to EPA, programs for issuing operating 
permits to all major stationary sources, and to certain other sources.

DATES: Comments on this proposed action must be received in writing by 
April 6, 1995.

ADDRESSES Comments should be addressed to Christopher D. Hess at the 
address below. Copies of the submittal and other supporting information 
used in developing the proposed rule are available for inspection 
during normal business hours by contacting: Christopher D. Hess, 
Environmental Protection Agency, Air Branch; 726 Minnesota Avenue, 
Kansas City, Kansas 66101.

FOR FURTHER INFORMATION CONTACT: Christopher D. Hess at (913) 551-7213.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under Title V of the Clean Air Act (``the Act'') as 
amended (1990), EPA has promulgated rules which define the minimum 
elements of an approvable state operating 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. Title V requires states to develop, 
and submit to EPA, programs for issuing these operating permits to all 
major stationary sources and to certain other sources.
    The Act requires that states develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within one year after receiving the submittal. The EPA's 
program review occurs pursuant to section 502 of the Act which outlines 
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 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.

II. Proposed Action and Implications

A. Analysis of Submission by State and Local Authority

    Introduction. What follows are brief explanations indicating how 
the submittals meet the requirements of Part 70. The reader may consult 
the Technical Support Document (TSD) for a more detailed explanation of 
these topics.
1. Support Materials
    (1) Governor's Letter. The state of Nebraska has requested approval 
of its Title V program. Additionally, the state designated its two 
local agencies to administer independent Title V programs and have 
requested approval on their behalf. Thus, this action also applies to 
the city of Omaha's Title V program. The Lincoln-Lancaster County 
Health Department (LLCHD) is addressed in a separate rulemaking action. 
The entire geography of Nebraska will be covered by either the state or 
an approved local program. The EPA will retain responsibility for the 
Title V program on tribal lands in Nebraska. These actions fulfill the 
requirements of part 70.4(b).
    (2) Regulations. The basic regulatory framework for the operating 
permit program is Title 129 Nebraska Air Quality Regulations. The 
state's submittal includes a demonstration of the public review and 
hearing process involved with the adoption of Title 129. The city of 
Omaha has adopted these regulations by reference and provided adequate 
demonstration of the required legal authority and public review 
process. Both programs also use the Nebraska Environmental Protection 
Act and Title 115 Rules of Practice and Procedure.
    The initial submittal contained an inadequate definition of 
``applicable requirements'' that limited the ability to include all 
requirements in the operating permit. This is because the initial 
definition stated that ``applicable requirements'' were only those 
adopted by the state's Environmental Quality Council. However, in 
response to EPA comments, the state modified the regulations in 
December 1994, so that Nebraska can require that all ``applicable 
requirements'' of the Clean Air Act will be addressed in the permit 
process.
    As a result, the submittal (as modified) does not identify any 
regulatory provisions which would restrict operation of the program.
    (3) Attorney General's Legal Opinion. The opinion contains the 
elements required by 40 CFR 70.4(b)(3) and demonstrates that there is 
adequate authority to meet all Title V requirements. The city of 
Omaha's legal opinion incorporates the state's by reference and also 
provides adequate legal authority.
2. Implementation
    (1) Program Description. A comprehensive plan for implementing the 
Title V program was included in each submittal that meets the 
requirements of 40 CFR 70.4(b)(1). Each plan identifies appropriate 
program authority, agency organization, and staffing. A combination of 
approximately 244 major sources have been identified that will require 
a Title V permit within both programs' jurisdictions.
    These programs have also identified adequate procedures for the 
permit application and review process, including inspection and 
enforcement provisions. The EPA has determined the outlined processes 
are sufficient to ensure effective implementation of the program. An 
implementation agreement was not included in either submittal, but the 
EPA is encouraging its development in anticipation of program approval.
    With respect to the operating permit fee, the city of Omaha has 
selected the presumptive minimum plus consumer price index (CPI), 
currently $30.07. The state has selected a fee above this amount at 
$30.69. These fees will be discussed further under the fee 
demonstration section (II., 3.). Both programs will maintain a Class II 
program for minor, non-Title V sources.
    (2) Program Implementation. Each program is establishing a permit 
registry to ensure issuing one-third of all permits in the first year 
of the program. This registry also includes a provision to review 
permit applications within nine months of receipt for those sources 
[[Page 12522]] of hazardous air pollutants participating in the early 
reduction program under section 112(i)(5) of the Act.
    In terms of initial permit applications, adequate procedures are 
outlined to satisfy Part 70 requirements. The application process 
includes affected state and EPA review. Each program's procedures and 
guidance are designed to ensure that a permit is issued within 18 
months of application.
    Both programs have established criteria for monitoring source 
compliance which include compliance inspections, citizen complaint 
responses, follow-up inspections, and permit application review. Each 
Title V source will be inspected at least once per year. Surveillance 
through monitoring will also be conducted to ensure compliance.
    (3) Personnel. Each submittal includes a workload analysis 
estimating the number of personnel needed for the Title V program. 
Since both the state and the city of Omaha have selected a fee equal to 
or greater than the $25 plus CPI as outlined in Part 70, EPA is 
presuming that the requirements of Sec. 70.9(b)(1) are met with respect 
to personnel. Either agency could be required to provide additional 
analysis if comments are received that propose to rebut the presumption 
of this Part 70 provision in accordance with Sec. 70.9(5)(ii).
    (4) Data Management. All permit application information will be 
entered into the state's computer data base and be submitted to the 
EPA. The proposed permits will be made available for EPA review. A 
permit decision schedule will ensure that a permit is issued within 18 
months of initial application.
    Each program requires the retention of permit information by the 
source for five years. Additionally, each agency has committed to 
maintain records for five years in its respective program descriptions.
    (5) Applicability Provisions. These programs provide for permitting 
of all major sources, affected sources, sources that opt to apply for a 
permit, and all sources subject to sections 111 or 112 standards (new 
source performance standards and standards for hazardous air 
pollutants).
    Both the state and the city of Omaha exempt sources that are not 
major sources, affected sources, or solid waste incineration units 
required to obtain a permit pursuant to section 129(e) of the Act. This 
exemption is allowed by Sec. 70.3(b)(1) until the Administrator 
completes a rulemaking to determine how the program should be 
structured for nonmajor sources.
    Since the city of Omaha has incorporated the state's rules by 
reference, the above-mentioned items apply to that local Title V 
program as well.
    (6) Permit Content. Nebraska's regulations require Title V permits 
to include Part 70 terms and conditions for all applicable 
requirements. These rules also stipulate that the duration of the 
permit will be specified in the permit. Both programs also provide for 
the inclusion of enhanced monitoring in permits.
    Title 129 requires the permit to contain a condition prohibiting 
emissions exceeding any allowances that the source lawfully holds under 
Title IV of the Act as required by Sec. 70.6(a)(4). The regulations 
also meet the requirements of Sec. 70.6(a)(5), Sec. 70.6(a)(6), 
Sec. 70.6(a)(7), and Sec. 70.6(a)(8). Part 70 also requires terms and 
conditions for reasonably anticipated operating scenarios to be 
included in the permit. Title 129 requires that the terms and 
conditions of each alternative scenario meet all the requirements of 
Part 70. Section 70.6(a)(10) requires the permit to contain terms and 
conditions, if the permit applicant requests them, for the trading of 
emissions increases and decreases at the facility. Title 129 fulfills 
this requirement.
    Part 70 also has requirements for the terms and conditions in a 
Part 70 permit at Sec. 70.6(b), compliance requirements at 
Sec. 70.6(c), and emergency provisions at Sec. 70.6(g). Title 129 
complies with these requirements.
    Both programs provide for general permits. The director will 
identify criteria by which sources may qualify for the general permit 
as required by Sec. 70.6(d)(1).
    The permitting program can also have provisions for permitting 
temporary sources and for permit shields. Title 129 has both of these 
options and meets the requirements of Part 70. Title 129 also provides 
for operational flexibility and closely follows EPA's requirements.
    The program does make provision to exempt the listing of 
insignificant activities in permit applications. The state has 
submitted a list to EPA that was adopted in December 1994. This list 
will be used by the city of Omaha as well.
    (7) Permit Applications. Title 129 addresses permit application 
requirements in Chapters 5 and 7. Within these rules adequate 
procedures are outlined for the following: duty to apply, complete 
applications, confidential information, correcting a permit 
application, standard forms, and compliance certification. A detailed 
analysis of how the submittal meets these Part 70 requirements is 
included in the TSD.
    (8) Permit Issuance. Title 129 satisfies both the complete and 
timely component of section 503 of the Act and 40 CFR 70.5(a). Sources 
are required to submit permit applications within 12 months after 
becoming subject to the permit program, or on or before some earlier 
date established under the state operating permit registry. Source 
permit applications must conform to the standard application forms 
developed by each of the respective agencies. These applications must 
contain information sufficient to determine all applicable requirements 
with respect to the applicant. Both submittals demonstrate that a 
source will receive a completeness determination within 30 days.
    Both programs also require that final action be taken on complete 
applications within 18 months of submittal of a complete application, 
except for initial permit applications which are subject to the three-
year transition plan set forth by the Clean Air Act Amendments of 1990. 
Title 129 requires compliance with public participation procedures, 
notification to affected states, compliance with all applicable 
requirements, and allows for a 45-day period for EPA objection.
    The regulations provide for priority on applications for 
construction or modification under an EPA approved preconstruction 
review program. The operating permit regulations do not affect the 
requirement that any source have a preconstruction permit under an EPA-
approved preconstruction review. The programs also provide that permits 
being renewed are subject to the same procedural requirements, 
including those for public participation and affected state and EPA 
review, that apply to initial permit issuance. Title 129 provides for 
administrative amendments which meet the requirements of the Federal 
rule.
    Permit modification processing procedures are equivalent to Federal 
requirements as they provide for the same degree of permitting 
authority, EPA, and affected state review and public participation. The 
program satisfies all of the Federal minor permit modification 
procedures.
    The programs provide for promptly sending to EPA any notice that 
either agency refuses to accept all recommendations of an affected 
state regarding a proposed minor permit modification. In addition, the 
programs provide that the permitting authority may approve, but may not 
issue, a final permit modification until after EPA's 45-day review 
period or until the EPA [[Page 12523]] has notified the permitting 
authority that the EPA will not object to issuance, whichever is first.
    Title 129 provides for minor permit modification group processing 
which meets the Federal criteria. Specifically, any application for 
group processing must meet permit application requirements similar to 
those outlined in section 70.7(e)(3). The state's rules also provides 
for notifying the EPA and affected states of the requested permit 
modification within five working days of receipt of an application 
demonstrating that the aggregate of a source's pending applications 
equals or exceeds the threshold level.
    Significant modification procedures are defined in a manner that 
parallels Federal provisions. Each agency's program description 
provides for completion of review of the majority of significant permit 
modifications within nine months after receipt of a complete 
application.
    a. Permit reopenings. A permit is to be reopened and revised when 
additional applicable requirements become applicable to a major source 
with a remaining permit term of three or more years, and such a 
reopening is to be completed within 18 months after promulgation of the 
applicable requirement. In addition, the proceedings to reopen a permit 
will follow the same procedures that apply to initial issuance, will 
affect only those parts of the permit for which cause to reopen exists, 
and will ensure reopenings are made as expeditiously as practicable. 
The rule provides that at least 30 days' advance notice must be given 
to the permittee for reopenings, and that notice will be given of the 
intent to reopen the permit.
    b. Off-permit revisions. Both the state and city of Omaha have 
elected to not allow off-permit activities.
    (9) Compliance Tracking and Enforcement. The requirement for 
proposed compliance tracking and enforcement reporting has been met by 
both programs. Omaha will provide enforcement information to the state 
monthly. The state will then enter information for both agencies into 
the Aerometric Information Retrieval System. The proposed enforcement 
program will consist of source inspection, surveillance, response to 
complaints, permit application review, and enforcement responses. 
Proposed enforcement responses include permit modification, permit 
revocation, stipulation, administrative orders, injunctive relief, 
civil/criminal referral, and referral to the EPA.
    (10) Public Participation, EPA and Affected States Review. Both 
programs ensure that all permit applications are available to the 
public. All requirements are included to ensure that each concerned 
citizen will be aware of proposed and final permit actions. This 
includes the commitment to keep a record of proceedings that will allow 
citizens to object to a permit up to 60 days after the EPA review 
period.
    Title 129 contains rules that ensure mutual review by affected 
states and the EPA. Neither the state nor city of Omaha will issue a 
permit when it is objected to in accordance with Sec. 70.8(c).
3. Fee Demonstration
    The city of Omaha has elected to collect the presumptive minimum 
plus CPI in accordance with Part 70 to cover direct and indirect costs 
of developing and administering its program. The state has selected a 
fee in the amount of $30.69 which is above the presumptive.
    Each program is also required to demonstrate that fees collected 
under Title V will be used exclusively for the purpose of Title V. This 
is addressed by the state in Nebraska statute 81.1505.01, which states 
that any Title V fees collected will be deposited into a designated 
account with the State Treasurer. Furthermore, in 81.105.04 the State 
Legislature's Appropriations Committee will conduct an annual review to 
ensure that all funds have been accounted for appropriately. Omaha has 
established a separate accounting structure exclusively for Title V.
    Part 70 also requires permitting authorities to submit periodic 
accounting reports to EPA. Upon further guidance by EPA, both agencies 
will be requested to submit these reports.
    Each submittal included an inventory of sources and the amount of 
fees that it expects to collect in the first year from each source as 
part of their fee demonstration. The state anticipates approximately 
$1,765,530 and the city of Omaha anticipates $419,957. Each agency 
submitted year-to-year estimates of resources by major activities which 
adequately satisfies the four-year projection.
4. Provisions Implementing the Requirements of Other Titles of the Act
    (1) Acid rain. The legal requirements for an approval under the 
Title V operating permits program for a Title IV program were cited in 
guidance distributed on May 21, 1993, entitled ``Title V--Title IV 
Interface Guidance for States.'' Each program has met the five major 
criteria of this guidance which include legal authority, regulatory 
authority, forms, regulatory revisions, and a commitment to acid rain 
deadlines. 40 CFR part 72 is adopted by reference.
    (2) Section 112. The specific Title V program approval criteria 
with respect to section 112 provisions are enumerated in a memorandum 
from John Seitz, Office of Air Quality Planning and Standards, dated 
April 13, 1993. The state and city of Omaha have met these criteria as 
described in the following topics:
    a. Section 112(d), (f), and (h).--EPA Emissions Standards. Chapter 
8 of Title 129 requires each permit to specify emission limitations and 
standards, including those operational requirements and limitations 
that ensure compliance with all requirements applicable at the time of 
permit issuance. If any applicable requirements have been promulgated 
at the Federal level, but not yet adopted by the state or Council, the 
director has specific regulatory authority to insert these applicable 
requirements into a permit on a case-by-case basis. Chapter 15 requires 
a permit to be reopened if a source becomes subject to an additional 
applicable requirement and has a remaining permit term of three years 
or more.
    b. General Provisions. The Seitz memorandum notes that the 
implementation of all current National Emission Standards for Hazardous 
Air Pollutants standards and future Maximum Achievable Control 
Technology (MACT) standards includes the implementation of any 
``general provisions'' that EPA develops for these standards. Initial 
Title V approval must ensure that states will carry out these 
provisions as in effect at the time of any permit issuance or 
revisions. The EPA promulgated the general provisions in 40 CFR part 
63, Subpart A on March 19, 1994 (59 FR 12407). The state and city of 
Omaha intend to adopt all applicable requirements. EPA thus considers 
that both programs have met this requirement.
    c. Section 112 (g)--Case-by-Case MACT For Modified/Constructed and 
Reconstructed Major Toxic Sources. Both programs propose to require 
best available control technology for new and modified sources of air 
toxics. In the absence of any EPA guidance/regulations defining case-
by-case MACT procedures and methods for determining agency equivalency 
of Federal requirements at the time of agency program submittal, the 
respective submissions are adequate for the interim. Each agency 
intends to adopt Federal air toxic regulations expeditiously.
    d. Section 112 (i)(5)--Early Reductions. Both programs have 
[[Page 12524]] adequate provisions for implementation of this program 
by adopting by reference 40 CFR part 63, Subpart D, early reduction 
compliance extension rules, promulgated in the Federal Register on 
December 29, 1992. To date, no source in either agency's area has made 
a commitment to participate in the early reductions program. Title 129 
provides for incorporating alternative emission limits into permits.
    e. Section 112(j)--Case-by-case MACT Hammer. Both agencies' intend 
to make case-by-case MACT determinations and to issue permits to 
subject sources in accordance with the 112(j) requirements. Title 129, 
Chapter 7 requires newly subject sources to file a permit application 
within 12 months of first becoming operational or otherwise subject to 
the title V program. This rule further requires sources subject to 
Chapter 28 (MACT) to submit a permit application within 12 months of 
becoming operational. The agencies would make their case-by-case MACT 
determination after receipt of the permit application and prior to 
permit issuance.
    f. Section 112(l)--State Air Toxics Programs. The EPA intends to 
delegate authority for existing section 112 standards under the 
authority of section 112(l) concurrent with approval of the title V 
program. Both the state and city of Omaha have requested delegation of 
future 112 standards/rules in accordance with the adoption-by-reference 
procedures in 40 CFR Part 63, Subpart E, section 63.91. Since section 
112(i) (the early reduction rule) has already been adopted by reference 
in Title 129, the EPA anticipates delegating this rule concurrent with 
title V approval.
    g. Section 112(r)--Accidental Release Plans. Title 129 provides for 
the section 112(r) requirements in Chapter 8. The permit of a source 
subject to the requirements of section 112(r) will contain a 
requirement to register the plan, verification of plan preparation and 
submittal to the permitting agency, the state Emergency Response 
Commission, and any local emergency planning committee; and will 
require an annual certification in accordance with Chapter 7, that the 
risk management plan is being properly implemented.
    The permit application requires a schedule of compliance for 
sources that are not in compliance with all applicable requirements at 
the time of permit issuance. Requirements for a compliance schedule are 
listed in Chapter 8.

B. Options for Approval/Disapproval and Implications

    The EPA is proposing full approval of the operating permits program 
submitted to EPA for the state of Nebraska and city of Omaha on 
November 15, 1993. Both of these agencies have demonstrated that their 
programs will be adequate to meet the minimum elements of an operating 
permits program as specified in 40 CFR part 70.
    Prior to the EPA taking final action on these programs, the state 
is required to officially submit the December 2, 1994 amendments to 
title 129 and the city of Omaha must incorporate these amendments by 
reference and submit them to the EPA. As noted, the EPA has reviewed 
these rule amendments and considers them adequate for the title V 
program.
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
section 112(l)(5) approval requirements 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 and local 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 each program for receiving 
delegation of section 112 standards that are unchanged from Federal 
standards as promulgated, and to delegate existing standards under 40 
CFR parts 61 and 63 for Part 70 sources. Both agencies have informed 
EPA that they intend to accept delegation of section 112 standards 
through the adoption by reference mechanism. This program for 
delegations applies to both existing and future standards for part 70 
sources.
    Additionally, both agencies have requested delegation of current 
and future section 112 standards under section 112(l)(5) and 40 CFR 
63.91 for sources not subject to Part 70 requirements. Both have 
demonstrated broad legal authority which covers all section 112 
sources, and both have demonstrated they have adequate resources to 
implement current section 112 standards. With respect to future section 
112 requirements, both have committed to provide EPA with future 
demonstrations of resource adequacy as necessary when new requirements 
are promulgated and the resource burdens associated with those 
requirements become known. Both have demonstrated that they will 
expeditiously implement section 112 requirements for these sources 
pursuant to a schedule after EPA promulgation, and that they have 
sufficient enforcement authority to adequately enforce section 112 
requirements for all sources.
    Therefore, for sources not subject to part 70 requirements, EPA is 
proposing to grant approval under section 112(l)(5) and 40 CFR 63.91 
the state and Omaha's program for receiving delegation of future 
section 112 standards that are unchanged from federal standards as 
promulgated, and to delegate existing standards under 40 CFR parts 61 
and 63 for non-Part 70 sources.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
rule. Copies of either submittal and other information relied upon for 
the proposed interim approval are contained in a docket maintained at 
the EPA Regional Office. The docket is an organized and complete file 
of all the information submitted to, or otherwise considered by, EPA in 
the development of this proposed rulemaking. The principal purposes of 
the docket are:
    1. To allow interested parties a means to identify and locate 
documents for participating in the rulemaking process, and
    2. To serve as the record in case of judicial review. The EPA will 
consider any comments received by April 6, 1995.

B. Executive Order 12866

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

C. Paperwork Reduction Act

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), Federal 
agencies must obtain the OMB clearance for collection of information 
from 10 or more non-Federal respondents.

D. 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

    Air pollution control, Intergovernmental relations, Operating 
permits, and Reporting and recordkeeping requirements.

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

    [[Page 12525]] Dated: February 13, 1995.
Dennis Grams,
Regional Administrator.
[FR Doc. 95-5517 Filed 3-6-95; 8:45 am]
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