[Federal Register Volume 60, Number 47 (Friday, March 10, 1995)]
[Proposed Rules]
[Pages 13088-13095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5981]



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


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[OK001; AD-FRL-5170-3]


Clean Air Act Proposed Interim Approval Operating Permits 
Program; the State of Oklahoma

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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

SUMMARY: The EPA proposes source category-limited interim approval of 
the operating permits program submitted by the Oklahoma Department of 
Environmental Quality (ODEQ) through the Governor of Oklahoma on 
January 12, 1994, for the purpose of complying with Federal 
requirements for an approvable State program to issue operating permits 
to all major stationary sources, with the exception of sources on 
Indian country.

DATES: Comments on this proposed action must be received in writing by 
April 10, 1995.

ADDRESSES: Written comments on this action should be addressed to Ms. 
Jole C. Luehrs, Chief, New Source Review Section, at the EPA Region 6 
Office listed below. Copies of the State's submittal and other 
supporting information used in developing the proposed interim approval 
rule are available for inspection during normal business hours at the 
following locations. Interested persons wanting to examine these 
documents should make an appointment with the appropriate office at 
least 24 hours before visiting day.
    U.S. Environmental Protection Agency, Region 6, Air Programs Branch 
[[Page 13089]] (6T-AN), 1445 Ross Avenue, Suite 700, Dallas, Texas 
75202-2733.
    Oklahoma Department of Environmental Quality, 4545 North Lincoln 
Boulevard., Suite 250, Oklahoma City, Oklahoma 73105-3483.

FOR FURTHER INFORMATION CONTACT: Wm. Nicholas Stone, New Source Review 
Section (6T-AN), Environmental Protection Agency, Region 6, 1445 Ross 
Avenue, Suite 700, Dallas, Texas 75202-2733, telephone (214) 665-7226.

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. Title V requires States to develop, and submit to the 
EPA, programs for issuing these operating permits to all major 
stationary sources and to certain other sources, with the exception of 
sources on Indian country.
    The Act requires that States develop and submit these programs to 
the EPA by November 15, 1993, and that the EPA act to approve or 
disapprove each program within one year after receiving the submittal. 
The EPA's program review occurs pursuant to section 502 of the Act and 
the part 70 regulations which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of 40 CFR part 70, and where a State requests source 
category-limited interim approval, the EPA may grant the program 
interim approval for a period of up to two years. If the 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.

B. Federal Oversight and Sanctions

    If the EPA were to finalize this proposed source category-limited 
interim approval, it would extend for two years following the effective 
date of final interim approval, and could not be renewed. During the 
interim approval period, the State of Oklahoma would be protected from 
sanctions, and the EPA would not be obligated to promulgate, 
administer, and enforce a Federal permits program for the State of 
Oklahoma. Permits issued under a program with interim approval have 
full standing with respect to part 70, and the State will permit 
sources based on the transition schedule submitted with the source 
category-limited approval request. This schedule may extend for no more 
than five years beyond the interim approval date.
    Following final interim approval, if Oklahoma has failed to submit 
a complete corrective program for full approval by the date six months 
before expiration of the interim approval, the EPA would start an 18-
month clock for mandatory sanctions. If Oklahoma then failed to submit 
a corrective program that the EPA found complete before the expiration 
of that 18-month period, the EPA would apply sanctions as required by 
section 502(d)(2) of the Act, which would remain in effect until the 
EPA determined that the State of Oklahoma had corrected the deficiency 
by submitting a complete corrective program.
    If, following final interim approval, the EPA were to disapprove 
Oklahoma's complete corrective program, the EPA would be required under 
section 502(d)(2) to apply sanctions on the date 18 months after the 
effective date of the disapproval, unless prior to that date Oklahoma 
had submitted a revised program and the EPA had determined that it 
corrected the deficiencies that prompted the disapproval.
    In addition, discretionary sanctions may be applied where warranted 
any time after the end of an interim approval period if Oklahoma has 
not timely submitted a complete corrective program or the EPA has 
disapproved a submitted corrective program. Moreover, if the EPA has 
not granted full approval to Oklahoma's program by the expiration of an 
interim approval and that expiration occurs after November 15, 1995, 
the EPA must promulgate, administer, and enforce a Federal permits 
program for Oklahoma upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

    1. Support Materials
    Pursuant to section 502(d) of the Act, the Governor of each State 
is required to develop and submit to the Administrator a part 70 
program under State or local law or under an interstate compact meeting 
the requirements of title V of the Act. Under the signature of Governor 
David Walters, ODEQ requested approval with full authority to 
administer the State part 70 program in all areas of the State of 
Oklahoma.
    The Governor's letter makes no reference to Indian country and 
specifically requests full authority over the State of Oklahoma. 
Because the Oklahoma permitting authorities have not demonstrated, 
consistent with applicable principles of Indian law and Federal Indian 
policies, legal authority to regulate sources in Indian country under 
the Act, the proposed interim approval of the Oklahoma part 70 program 
will not extend to any lands within the exterior boundaries of Indian 
country. Though the State has made no demonstration of jurisdiction 
over Indian country, the State may at a later time make an adequate 
demonstration of authority. Title V sources located within the exterior 
boundaries of Indian country in the State of Oklahoma will be subject 
to the Federal operating permit program, to be promulgated at 40 CFR 
part 71, unless a tribe is delegated a part 70 program. Regulations for 
delegation of tribal programs are being developed pursuant to section 
301(d) of the Act. Tribes may also have inherent sovereign authority to 
regulate air pollutants from sources on Indian country.
    The Oklahoma submittal addresses the program description as 
required at 40 CFR 70.4(b)(1) by describing how ODEQ intends to carry 
out its responsibilities under the part 70 regulations. The program 
description is addressed in the following areas: (I) Complete Program 
Description, (II) State Permitting Regulations, Guidelines, Policies, 
and Procedures, (III) Attorney General's Opinion, (IV) Permitting 
Program Documentation, (V) Provisions for Implementing the Operating 
Permits Program, (VI) Permit Fee Demonstration, (VII) Compliance 
Tracking and Enforcement, and (VIII) Provisions Implementing the 
Requirement of Other Titles of the Act (40 CFR 70.4(b)(3) (i) and (v)). 
The program description has been deemed to be appropriate for meeting 
the requirement of 40 CFR 70.4(b)(1).
    Pursuant to 40 CFR 70.4(b)(3), the Governor is required to submit a 
legal opinion from the Attorney General (or the attorney for the State 
air pollution control agency that has independent legal counsel, 
hereafter AG) demonstrating adequate authority to carry out all aspects 
of a title V operating permits program. The State of Oklahoma submitted 
an AG's Opinion in section III of the ``Program Description'' and a 
Supplemental AG's Opinion on February 28, 1994, demonstrating adequate 
legal authority as required by Federal law and regulation. The 
Supplemental AG's Opinion addresses the delegation of authority for 
signature from the [[Page 13090]] Attorney General to the Chief Counsel 
for the Air Quality Division who has full authority to represent the 
State in all matters relating to the Department's environmental 
programs. This opinion with the supplement adequately addresses the 
thirteen provisions listed at 40 CFR 70.4(b)(3)(i)-(xiii).
    The State statutes cited in the AG's Opinion authorize the 
imposition of criminal fines in the amount of $10,000 per violation as 
required by 40 CFR 70.11(a)(3)(ii) for knowing violations of applicable 
requirements, permit conditions, as well as fee and filing 
requirements. Further, these statutes authorize the fine amounts to be 
imposed on a per day per violation basis as required by 40 CFR 
70.11(a)(3)(ii). The statute at Title 27A O.S. Supplement. 1993, 
Section 2-5-116, appears to establish a cap in the amount of $250,000 
on criminal penalties. The State is requested to supplement the 
Attorney General's Opinion again to clarify that this limit will not 
impede the State or EPA from enforcing daily violations with a $10,000 
per day per violation fine. This supplemental AG Opinion should be 
submitted to the EPA before the publication of the final interim 
approval notice.
    40 CFR 70.4(b)(4) requires the submission of relevant permitting 
program documentation not contained in the regulations, such as permit 
forms and relevant guidance to assist in the State's implementation of 
its program. The State addresses this requirement in its program 
submittal under Attachment 39--``Instructions for Title V Part 70 
Operating Permit Application and General Permit Application 
Completeness Checklist'', Attachment 40--``Permit Form'', Attachment 
41--``Permit Reporting Forms'', and Attachment 42--``Inspection 
Protocol, Point Source Inspection Form.''
    2. Regulations and Program Implementation
    The State of Oklahoma has submitted the Oklahoma Air Quality 
Council Regulations (OAC) 252:100-8 ``Operating Permit Regulations'' 
and OAC 252:100-8-9 ``Permit Fee Requirements,'' for implementing the 
State's part 70 program as required by 40 CFR 70.4(b)(2). Sufficient 
evidence of their procedurally correct adoption was submitted in the 
package on January 7, 1994, showing evidence of adoption which was sent 
to the EPA in the State's original submittal. Copies of all applicable 
State and local statutes and regulations which authorize the part 70 
program, including those governing State administrative procedures, 
were submitted with the State's program.
     The State submitted as Attachment 1, OAC 252-100-8 titled 
``Operating Permits (Part 70)'' (Subchapter 8), as required at 40 CFR 
70.4(b)(2). Subchapter 8 follows the rule at 40 CFR part 70 very 
closely. Supporting documentation of procedurally correct adoption and 
copies of all applicable State statutes and regulations which authorize 
the part 70 program, including those governing State administrative 
procedures, were submitted with the State's program. Subchapter 8 
received written comments from May 7 through October 19, 1993, and 
public hearings were held July 13, August 17, September 14, and October 
19, 1993. The response to comments was made by ODEQ on October 19, 
1993. Sufficient evidence of their procedurally correct adoption was 
submitted and meets the requirements of 40 CFR 70.4(b)(2).
    The following requirements, set out in the EPA's part 70 rule, are 
addressed in the State's submittal: (a) provisions to determine 
applicability (40 CFR 70.3(a)), OAC 252-100-8-3; (b) provisions to 
determine complete applications (40 CFR 70.5(a)(2)), OAC 252-100-8-5; 
(c) public participation (40 CFR 70.7(h)), OAC 252-100-8-7(i); (d) 
provisions for minor permit modifications (40 CFR 70.7(e)(2)), OAC 252-
100-8-7(e); (e) provisions for permit content (40 CFR 70.6(a)), OAC 
252-100-8-6; (f) provisions for operational flexibility (40 CFR 
70.4(b)(12)), OAC 252-100-8-6(h); and (g) enforcement provisions (40 
CFR 70.4(b)(5) and 70.4(b)(4)(ii)), OAC 252-100-8-6(b-c) and the AG 
Opinion.
     Following is a discussion of certain specific provisions in the 
State's submission as they relate to requirements of 40 CFR part 70:
    (a) Applicability criteria, including any criteria used to 
determine insignificant activities or emissions levels (40 CFR 
70.4(b)(2) and 70.3(a)): Applicability criteria are listed at OAC 
252:100-8-3 with ``applicable requirement'' defined at OAC 252:100-8-2. 
The regulations at OAC 252:100-8-2 defines a ``major source.'' The 
State included a paragraph (4) to this definition which does not allow 
aggregation of emission sources at oil and gas wells, compressor 
stations, and pump stations for criteria pollutants. Paragraph (4) is 
in conflict with the rule because oil and gas sources may not be 
aggregated to determine major source status for Hazardous Air 
Pollutants only. Therefore, as a condition for full approval, the 
regulations at OAC 252:100-8-2, ``major source,'' must be revised to 
delete paragraph (4).
    Oklahoma's ``major source'' definition creates the possibility that 
sources that would otherwise be major under part 70 would not be major 
due to the non-aggregation provision for oil and gas facilities. Non-
aggregation of oil and gas units is provided only for the emission of 
hazardous air pollutants in the Federal rule. 40 CFR 70.2 requires all 
sources located on contiguous or adjacent properties, under common 
control, and belonging to a single major industrial grouping to be 
considered as the same source. The Oklahoma permit regulations could 
cause certain part 70 major sources, as defined in 40 CFR 70.2, or 
portions of such sources, to be treated as separate sources. This could 
cause some part 70 sources to be exempted from coverage by part 70 
permits which must ensure all part 70 requirements for these sources 
are met. The EPA considers Oklahoma's misinterpretation of the non-
aggregation provision for criteria pollutants to allow an unknown 
number of oil and gas facilities to avoid title V of the Act. The EPA 
expects that any permits issued by the State will address all 
applicable requirements, as required by 40 CFR 70.7(a)(1)(iv).
     The State of Oklahoma submitted under the signature of the 
Executive Director of the ODEQ, Mark Coleman, a request dated January 
23, 1995, for the EPA to grant source category-limited interim approval 
allowing more time to permit these extra sources and correct the 
regulations. In the original submittal the Governor of Oklahoma 
delegated the authority to submit non-regulatory changes under the 
signature of the Executive Director of the ODEQ. Because the request 
for source category-limited interim approval requires a regulatory 
change, the EPA must receive a formal request under the Governor's 
signature before the EPA can publish final interim approval in the 
Federal Register. The request included a revised transition schedule 
that demonstrates the State will permit at least 60% of its sources and 
at least 80% of its emissions during the first three years. The request 
is consistent with the policy memo from John Seitz, Director of the 
Office of Air Quality Planning and Standards dated August 2, 1993. The 
EPA can grant source category-limited interim approval to States whose 
programs do not provide for permitting all required sources if the 
State makes a showing that two criteria were met: 1) that there were 
``compelling reasons'' for the exclusions and 2) that all required 
sources will be permitted on a schedule that ``substantially meets'' 
the requirements of part 70. The EPA considers Oklahoma's 
misinterpretation of use of the non-aggregation provision 
[[Page 13091]] for criteria pollutants to be a compelling reason for 
granting this type of interim approval. Further, the revised transition 
plan demonstrates that all part 70 sources will be permitted on a 
schedule that substantially meets the requirements of part 70.
    The EPA is therefore proposing to grant Oklahoma source category-
limited interim approval. Source category-limited interim approval will 
allow Oklahoma to implement the revised transition schedule to permit 
all part 70 sources during the transition period after the permit 
regulations have been revised. As a condition of this interim approval, 
the State must revise the regulations at OAC 252:100-8-7(a)(5)(A) and 
OAC 252:100-8-5(b)(2) to reflect the new transition schedule for 
permitting existing sources consistent with the rule at 40 CFR part 70. 
For full part 70 approval, the ODEQ will be required to revise its 
permit regulations so no source or portion of a source which would be 
defined as a major under 40 CFR 70.2 will be exempt from part 70 
requirements because the emissions of an oil or gas unit have not been 
aggregated. Additionally, the State must formally request source 
category-limited interim approval under the Governor's signature 
because this approval action requires the regulatory changes outlined 
above. This formal request under the Governor's signature must be 
received by the EPA before this approval action can be published as 
final in the Federal Register.
    The regulations at OAC 252:100-8-3(e) address insignificant 
activities. Emissions of one pound per hour of criteria pollutants or 
emissions of toxic pollutants less than the de minimis listed at OAC 
252:100-41-43(a)(5) are considered insignificant. Further, the State 
regulations consider increases in potential to emit at a facility to be 
insignificant if the increase is less than 10% of the permit limit or 
10% of the facility's baseline potential to emit. This insignificant 
level is available to any permit action (modification or renewal) and 
must be identified in the application. Emissions of 1 lb/hr based on 
the source's potential to emit are reasonable. However, to consider a 
percentage change in the potential to emit or a permit limit as 
insignificant is not reasonable. As the regulations are currently 
written, a permitted source could exceed a permit limit by 10% without 
liability. Also, 10% of a high permit limit could mask a permit 
modification from preconstruction review. For these reasons, the 
language at OAC 252:100-8-3(e)(3) must be revised to delete the 
allowance of any percentage of the permit limit or change in the 
potential to emit as an insignificant emission level. Further, the 
language at OAC 252:100-8-3(e)(1) must be amended to base the 1 lb/hr 
insignificant emissions level on the source's potential to emit.
    The ODEQ will maintain a list of insignificant activities that need 
not be quantified on the application as well as a list of activities 
the Department considers to be ``trivial.'' Trivial activities are not 
required to be identified on the application. The Federal rule at part 
70 allows a list of insignificant activities and emission levels which 
need not be included in permit applications be submitted as part of a 
State's part 70 program, and approved by the Administrator. However, 
the list of insignificant activities and the list of trivial activities 
mentioned in the State regulations were not submitted as part of the 
part 70 program, and part 70 does not allow for the substitution of the 
State permitting authority's approval for the Administrator's approval, 
which is required by 40 CFR 70.5(c). Furthermore, 40 CFR 70.5(c) 
clarifies that if the insignificant activities are exempted because of 
size or production rate, a list of these insignificant activities must 
be included in the application. Therefore, for full part 70 approval, 
the regulations at OAC 252:100-8-3(e) must be revised to reflect the 
requirements at 40 CFR 70.5(c).
    The State's insignificant emissions levels will allow for an 
emissions threshold that could allow significant emissions to avoid 
appearing on the application. As a condition of full approval, the 
State must amend the language at OAC 252:100-8-3(e) so that the 
insignificant emissions rate of 1 lb/hr for criteria pollutants will be 
based on potential to emit instead of actual emissions. Additionally, 
the language at OAC 252:100-8-3(e)(3) must be revised to delete the 
allowance of any percentage of the permit limit or change in the 
potential to emit as an insignificant emission level. An application 
may not omit information needed to determine the applicability of, or 
to impose any applicable requirement, or to evaluate the fee amount 
required. Further, any list of insignificant activities or trivial 
activities must be approved by the EPA prior to its use.
    (b) Provisions to determine complete applications are listed at OAC 
252:100-8-5(d) and 5(b)(8). Complete application forms, model permit 
forms, permit reporting forms, and instructions are located in 
Attachments 39, 40, 41, and 42. These application forms may be amended 
without rulemaking to facilitate changes required by new applicable 
requirements. These provisions meet the requirements of 40 CFR 70.5 
(a)(2) and (c).
    (c) Provisions for public participation are found at OAC 252:100-8-
7(i) and review by the EPA and affected States at OAC 252:100-8-8. The 
State regulations provide for adequate public participation and notice 
to affected States for permit issuance, renewals, and reopenings. The 
regulations provide standing only for those who have provided written 
comments during public review. The State must clarify that judicial 
review is available to all affected parties for all final permit 
actions including minor modifications and administrative amendments. As 
a condition of full approval, the provision at OAC 252:100-8-7(j) must 
be clarified to assure that all final permit actions are subject to 
judicial review.
    The regulations at OAC 252:100-8-7(i)(1)(E) and at OAC 252:100-8-
7(j)(2)(A) provide standing for written comments only during public 
review. As a condition of full approval, these provisions in the 
regulations must be revised to delete the word ``written,'' thus 
providing standing for oral comments during the public participation 
process. With these required changes, the provisions meet the 
requirements of 40 CFR 70.7(h).
    (d) The rule at 40 CFR 70.7(e)(2)(i) specifies criteria for minor 
permit modifications. These criteria are adequately incorporated in the 
State regulations at OAC 252:100-8-7(e)(1)(A). These provisions are 
more stringent than the rule at 40 CFR 70.7(e) because they include 
State-only requirements as well as federally enforceable requirements. 
The provisions at OAC 252:100-8-7(e) meet the requirements at 40 CFR 
70.7(e).
    The EPA has noted two deficiencies in the administrative amendments 
procedure at OAC 252:100-8-7(d). This procedure is designed to make 
simple changes to the permit that do not require public, affected 
State, or EPA review. The rule at 40 CFR 70.7(d)(1)(iii) allows 
administrative amendments to be used to require more frequent 
monitoring at the facility. The regulations at OAC 252:100-8-7(d)(1)(C) 
allow ``. . . more or less . . .'' frequent monitoring. Also, OAC 
252:100-8-7(d)(1)(E) allows changes processed under Subchapter 7 using 
enhanced New Source Review (NSR) procedures to be incorporated into the 
operating permit under an administrative amendment.
    The administrative amendment procedure cannot be used to make the 
[[Page 13092]] monitoring requirements less stringent. Therefore, as a 
condition for full approval, the State must revise the administrative 
amendment procedure to delete the words ``. . . or less . . .'' from 
OAC 252:100-8-7(d)(1)(C).
    The regulations do not define or specify the NSR procedures 
mentioned and therefore require clarification. The rule at 40 CFR 
70.7(d)(1)(v) requires that the procedures used for enhanced NSR are 
substantially equivalent to the requirements of 40 CFR 70.7 and 40 CFR 
70.8 that would be applicable to the change if it were subject to 
review as a permit modification, and has compliance requirements 
substantially equivalent to those contained in 40 CFR 70.6. Subchapter 
7 has not been submitted as a SIP revision and the EPA will reserve 
comment on Subchapter 7 until it is submitted. Until the EPA has 
completed its review of the State Implementation Plan (SIP) revision 
and has approved it, the EPA expects that the State will interpret the 
term ``enhanced'' in OAC 252:100-8-7(d)(1)(E) consistent with the EPA's 
definition of that term, so that changes processed under the State's 
NSR program will be eligible for incorporation into the title V permit 
through administrative amendment only if those changes have been 
processed consistent with the requirements of 40 CFR 70.7(d)(1)(v), as 
explained above. Interpreted in this way, the State's program is 
eligible for interim approval.
    Therefore, as a condition for full approval, the State must revise 
the regulations at OAC 252:100-8-7(d)(1)(E) to define or specify 
``Enhanced New Source Review procedures'' and to submit a SIP revision 
for Subchapter 7 that reflects these procedures.
    (e) Provisions for permit content are found at OAC 252:100-8-6. The 
State regulations contain all of the provisions at 40 CFR 70.6. The 
language in the State regulations is often verbatim with the rule. 
Adequate provisions are made for permit duration, permit shield, 
general permits, temporary sources, and emergency situations. The 
regulations at OAC 252:100-8(a)(3)(C)(iii)(I) define ``prompt'' 
reporting of exceedances as 24 hours after the occurrence. The 
provisions at OAC 252:100-8-6(a) include the phrase ``To the extent 
practicable . . .'' This phrase indicates that the State has discretion 
in what constitutes an applicable requirement. In order to receive full 
approval, the State must remove the phrase ``to the extent 
practicable.'' Until this revision is made, the permits issued by the 
State shall meet the requirements of 40 CFR 70.6 and include all 
applicable requirements.
    (f) Provisions for operational flexibility and alternative 
scenarios are listed at OAC 252:100-8-6(h). This section meets the 
requirements of 40 CFR 70.4(b)(12), 70.5(c)(7), and 70.6(a)(10).
    (g) Provisions for compliance tracking and enforcement are 
described in Section VII of the submittal. The State commits to submit 
annual information concerning the State's enforcement activities in 
part A of this section. Attachment 42 contains an Inspection Protocol 
and Point Source Inspection Form. Attachment 48 is the latest 
Enforcement Memorandum of Agreement. Attachment 49 contains the Air 
Quality Program Enforcement Action Report. Attachment 50 contains a 
tracking list for Administrative Orders and Consent Orders. The AG 
Opinion discussed above outlines the State's authority to enforce all 
aspects of the program. These submission elements meet the requirements 
for compliance tracking and reporting at 40 CFR 70.4(b)(4)(ii) and (5). 
These submission elements meet the enforcement authority requirements 
at 40 CFR 70.4(b)(2), 70.4(b)(3)(vii), and 70.4(9).
    The State of Oklahoma has the authority to issue a variance from 
requirements under Title 27A O.S. Supplement. 1993, Section 2-5-109. 
The EPA regards this 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 the procedures allowed by part 70. 
A part 70 permit may be issued or revised (consistent with part 70 
permitting procedures) to incorporate those terms of a variance that 
are consistent with applicable requirements. A part 70 permit may also 
incorporate, via part 70 permit issuance or modification procedures, 
the schedule of compliance set forth in a variance. However, the EPA 
reserves the right to pursue enforcement of applicable requirements 
notwithstanding the existence of a compliance schedule in a permit to 
operate. This is consistent with 40 CFR 70.5(c)(8)(iii)(C), which 
states that a schedule of compliance ``shall be supplemental to, and 
shall not sanction noncompliance with, the applicable requirements on 
which it is based.''
    3. Permit Fee Demonstration
    The regulations at OAC 252:100-8-9 specify an annual fee of $25 per 
ton per year based on actual or allowable emissions at the facility as 
reflected in the emission inventory. This fee is based on 1995 dollars 
for the first year and will be adjusted each year afterward to reflect 
the difference between the Consumer Price Index (CPI) for the previous 
year to the CPI for 1989. The original submittal from the State did not 
contain a detailed fee analysis. Instead, the regulations at OAC 
252:100-8-9(d)(1)(B) specify that the ODEQ must complete a detailed 
workload analysis mandated by State law to be conducted by an 
independent consultant with a review of the fee and adjustment of the 
fee as necessary. The State submitted the workload analysis and fee 
demonstration to the EPA for review on November 7, 1994. The formal 
submission to the program was made in a letter dated January 23, 1995, 
from the Executive Director of the ODEQ to the EPA. The fee 
demonstration recommends a fee of $15.19 per ton in 1995 dollars and 
will be adjusted each year to the 1989 CPI as provided for in the 
regulations.
    Though the fee reflected in the fee demonstration is less than the 
$25 per ton fee listed in the Act, the State has shown that it will 
provide sufficient funding based on the applicable requirements in 
effect at the time of the program submittal. Based on the anticipated 
emissions, the State expects the $15.19 per ton fee to generate over 
$4,250,000 the first year. These funds will adequately pay for the 
anticipated costs of the program as demonstrated in the detailed 
workload analysis.
    Therefore, based on its review, the EPA proposes approval for the 
fee structure and workload analysis of the Oklahoma part 70 program. 
The EPA solicits comment on the fee during the comment period for this 
proposed approval action and will respond to any comments before taking 
final action. The EPA is recommending approval of the $15.19 per ton 
fee and deems the analysis and fee demonstration adequate in accordance 
with 40 CFR part 70.
4. Provisions Implementing the Requirements of Other Titles of the Act
    The State of Oklahoma acknowledges that its request for approval of 
a part 70 program is also a request for approval of a program for 
delegation of unchanged section 112 standards under the authority of 
section 112(l) as they apply to part 70 sources. Upon receiving 
approval under section 112(l), the State may receive delegation of any 
new authority required by section 112 of the Act through the delegation 
process. [[Page 13093]] 
    The State also has the option at any time to request, under section 
112(l) of the Act, delegation of section 112 requirements in the form 
of State regulations which the State demonstrates are equivalent to the 
corresponding section 112 provisions promulgated by the EPA. At this 
time, the State plans to use the mechanism of incorporation by 
reference to adopt unchanged Federal section 112 requirements into its 
regulations.
    The radionuclide National Emission Standard for Hazardous Air 
Pollutants (NESHAP) is a section 112 regulation and therefore, also an 
applicable requirement under the State operating permits program for 
part 70 sources. There is not yet a Federal definition of ``major'' for 
radionuclide sources. Therefore, until a major source definition for 
radionuclides is promulgated, no source would be a major section 112 
source solely due to its radionuclide emissions. However, a 
radionuclide source may, in the interim, be a major source under part 
70 for another reason, thus requiring a part 70 permit. The EPA will 
work with the State in the development of its radionuclide program to 
ensure that permits are issued in a timely manner.
    Section 112(g) of the Act requires that, after the effective date 
of a permits program under title V, no person may construct, 
reconstruct or modify any major source of hazardous air pollutants 
unless the State determines that the maximum achievable control 
technology (MACT) emission limitation under section 112(g) will be met. 
Such determination must be made on a case-by-case basis where no 
applicable limitations have been established by the Administrator. 
During the period from the title V effective date to the date the State 
has taken appropriate action to implement the final section 112(g) rule 
(either adoption of the unchanged Federal rule or approval of an 
existing State rule under 112(l)), Oklahoma intends to implement 
section 112(g) of the Act through the State's preconstruction process.
    The State of Oklahoma commits to appropriately implementing and 
enforcing the existing and future requirements of sections 111, 112 and 
129 of the Act, and all MACT standards promulgated in the future, in a 
timely manner.
    The regulations at OAC 252:100-8-6(i) provide for the permitting of 
acid rain sources. The EPA commented on these regulations on October 1, 
1993, and recommended that the State incorporate by reference the 
Federal acid rain permit requirements. The State has agreed to change 
OAC 252:100-8-6(i) to incorporate by reference the acid rain permit 
requirements and has drafted this revision as an emergency rule. The 
State must submit this regulatory revision for incorporation by 
reference of the acid rain permitting rules before this approval action 
can be published as final in the Federal Register.
5. Enforcement Provisions
    The State describes compliance tracking and enforcement under 
Section VII of the submittal. Oklahoma commits to submit annual 
information concerning the State's enforcement activities in part A of 
this section. As required at 40 CFR 70.4(b)(4)(ii) and 70.4(b)(5), the 
Enforcement Memorandum of Understanding, signed by the State and the 
EPA on July 22, 1993, appears in the submittal as Attachment 48. 
Attachment 42 contains an Inspection Protocol and Point Source 
Inspection Form. Attachment 49 contains the Air Quality Program 
Enforcement Action Report. Attachment 50 contains a tracking list for 
Administrative Orders and Consent Orders. The AG Opinion discussed 
above outlines the State's authority to enforce all aspects of the 
program. This statement of authority is required at 40 CFR 
70.4(b)(3)(vii).
    The compliance tracking and enforcement information in the 
submittal serves to describe the current processes in place to track 
air permits and conduct enforcement actions. These elements meet the 
requirements for compliance tracking and reporting at 40 CFR 70.4(b) 
(4)(ii) and (5). Further, these elements meet the enforcement authority 
requirements at 40 CFR 70.4(b)(2), 70.4(b)(3)(vii), and 70.4(9).
6. Technical Support Document
    The results of this review will be shown in a document entitled 
``Technical Support Document,'' which will be available in the docket 
at the locations noted above. The technical support documentation shows 
that all operating permits program requirements of 40 CFR part 70 and 
relevant guidance were met by the submittal with the exception of those 
requirements described below.
7. Summary
    The State of Oklahoma submitted to the EPA, under a cover letter 
from the Governor, the State's operating permits program on January 7, 
1994. The submittal has adequately addressed all sixteen elements 
required for full approval as discussed in part 70 with the exception 
of the issues described in section B below. The State of Oklahoma 
addressed appropriately all requirements necessary to receive source 
category-limited interim approval of the State operating permits 
program pursuant to title V of the Act, 1990 Amendments and 40 CFR part 
70. The EPA is proposing source category-limited interim approval for 
the part 70 program submittal for the State of Oklahoma.

B. Options for Approval/Disapproval and Implications

    The EPA is proposing to grant source category-limited interim 
approval to the operating permits program submitted by the State of 
Oklahoma on January 7, 1994. Interim approvals under section 502(g) of 
the Act do not create any new requirements, but simply approve 
requirements that the State is already imposing.
    If promulgated, the State must make the following changes to 
receive full approval:
(1) Criminal Penalty Cap
    As discussed in section A.1 above, the State must provide a 
supplemental Attorney General's Opinion to clarify the implementation 
of the criminal penalty statute in such a way that preserves the 
integrity of the Act. This supplement must be submitted to the EPA 
before final action on this proposal is taken.
(2) Definition of ``Major Source''
    As discussed in section A.2.a above, the State must revise OAC 
252:100-8-2, ``major source'' by deleting paragraph (4). This revision 
will make the definition consistent with the rule at part 70. Also, the 
State must revise the regulations to reflect the transition schedule 
proposed for source category-limited interim approval.
(3) Revision of Insignificant Activities
    As discussed in section A.2.a above, the State must amend the 
language at OAC 252:100-8-3(e) so that the insignificant emissions rate 
of 1 lb/hr for criteria pollutants will be based on potential to emit 
instead of actual emissions. Further, the language at OAC 252:100-8-
3(e)(3) must be revised to delete the allowance of any percentage of a 
permit limit or change in the potential to emit as an insignificant 
emission level. Also, an application may not omit information needed to 
determine the applicability of, or to impose, any applicable 
requirement, or to evaluate the fee amount required. Further, any list 
of insignificant activities or trivial activities must be approved by 
the EPA prior to its use, as required at 40 CFR 70.5(c). 
[[Page 13094]] 
(4) Revision of Permit Content
    The regulations at OAC 252:100-8-6(a) must be revised to remove the 
phrase ``To the extent practicable. . .'' Until this revision is made, 
the permits issued by the State shall meet the requirements of 40 CFR 
70.6 and include all applicable requirements.
(5) Revision to Provide Standing
    As discussed in section A.2.c above, the State must revise OAC 
252:100-8-7(i)(1)(E) and OAC 252:100-8-7(j)(2)(A) to delete the word 
``written'' so that oral comments have standing with judicial review of 
the permitting process. Also, the State must clarify OAC 252:100-8-7(j) 
so that judicial review is available to all affected parties for all 
final permit actions including minor modifications and administrative 
amendments.
(6) Administrative Amendment Procedure
    As discussed in section A.2.d above, the State must revise OAC 
252:100-8-7(d)(1)(C) to delete the words, ``. . . or less . . .''. 
Further, the provisions at OAC 252:100-8-7(d)(1)(E) must be clarified 
to require enhanced NSR procedures that are substantially equivalent to 
the requirements of 40 CFR 70.7 and 40 CFR 70.8 for a change subject to 
review as a permit modification and compliance requirements 
substantially equivalent to those contained in 40 CFR 70.6. The State 
must submit a SIP revision for Subchapter 7 that incorporates enhanced 
NSR procedures that meet the requirements listed at 40 CFR 70.7 and 40 
CFR 70.8 for a change subject to review as a permit modification, and 
has compliance requirements substantially equivalent to those contained 
in 40 CFR 70.6.
(7) Review of the Fee
    As discussed in section A.3 above, the EPA has reviewed the 
workload analysis and fee demonstration submitted November 7, 1994, and 
is recommending approval of the proposed fee of $15.19 per ton. The EPA 
will consider comments made during the comment period for this approval 
action and will reserve final action on the fee for the final interim 
approval notice.
(8) Acid Rain Incorporation by Reference
    As discussed in section A.4 above, the State must revise OAC 
252:100-8 to incorporate the acid rain requirements and submit this 
revision to the EPA before final action on this proposal is taken.
    Evidence of these regulatory revisions and their procedurally 
correct adoption must be submitted to the EPA within 18 months of the 
EPA's approval of the Oklahoma part 70 program. This interim approval, 
which may not be renewed, extends for a period of up to two years. 
During the interim approval period, the State is protected from 
sanctions for failure to have a program, and the EPA is not obligated 
to promulgate a Federal permits program in the State. Permits issued 
under a program with interim approval have full standing with respect 
to 40 CFR part 70, and the State will permit sources based on the 
transition schedule submitted with the source category-limited approval 
request. This schedule may extend for no more than five years beyond 
the interim approval date.
    If the interim approval is converted to a disapproval, it will not 
affect any existing State requirements applicable to small entities. 
Federal disapproval of the State submittal does not affect its State-
enforceability. Moreover, the EPA's disapproval of the submittal does 
not impose a new Federal requirement.
    The scope of Oklahoma's part 70 program that the EPA proposes to 
approve in this notice would apply to all part 70 sources (as defined 
in the approved program) within the State of Oklahoma, except any 
sources of air pollution over which an Indian Tribe has jurisdiction. 
See, e.g., 59 FR 55813, 55815-18 (November 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 Act; see also 
59 FR 43956, 43962 (August 25, 1994); 58 FR 54364 (October 21, 1993).
    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 the 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) and 40 CFR part 63.

III. Proposed Rulemaking Action

    In this action, the EPA is proposing source category-limited 
interim approval of the part 70 program submitted by the State of 
Oklahoma. The program was submitted by the State to the EPA for the 
purpose of complying with Federal requirements found at the 1990 
Amendments, title V and at part 70, which mandates that States develop, 
and submit to the EPA, programs for issuing operating permits to all 
major stationary sources and certain other sources, with the exception 
of Indian country. 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.
    The EPA has reviewed this submittal of the Oklahoma part 70 program 
and is proposing source category-limited interim approval. Certain 
defects in the State's regulations preclude the EPA from granting full 
approval of the State's part 70 program at this time. The EPA is 
proposing to grant interim approval, subject to the State obtaining the 
needed regulatory revisions within 18 months after the Administrator's 
approval of the Oklahoma title V program pursuant to 40 CFR 70.4.

IV. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
rule. 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, 
the 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 so that they can effectively participate 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 10, 1995.

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et. seq., the 
EPA must prepare a regulatory flexibility analysis assessing the impact 
of any proposed or final rule on small entities, (5 U.S.C. 603 and 
604). Alternatively, the EPA may certify that the rule will not have a 
significant impact on a substantial [[Page 13095]] number of small 
entities. Small entities include small businesses, small not-for-profit 
enterprises, and government entities with jurisdiction over populations 
of less than 50,000.
    Part 70 program approvals under section 502 of the Act do not 
create any new requirements, but simply approve requirements that the 
State is already imposing. Therefore, because the Federal part 70 
program approval does not impose any new requirements, I certify that 
it does not have a significant impact on any small entities affected. 
Moreover, due to the nature of the Federal-State relationship under the 
Act, preparation of a regulatory flexibility analysis would constitute 
Federal inquiry into the economic reasonableness of State action. The 
Act forbids the EPA to base its actions concerning part 70 programs on 
such grounds, (Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 
(S.Ct 1976); 42 U.S.C. section 7410(a)(2)).

List of Subjects in 40 CFR Part 70

    Administrative practice and procedure, Air pollution control, 
Checklist, Environmental protection, Intergovernmental relations, 
Memorandum of understanding, Operating permits, Options for approval/
disapproval and implications, Permit fee demonstration.

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

    Dated: February 22, 1995.
William B. Hathaway,
Acting Regional Administrator (6M).
[FR Doc. 95-5981 Filed 3-9-95; 8:45 am]
BILLING CODE 6560-50-P