[Federal Register Volume 60, Number 67 (Friday, April 7, 1995)]
[Proposed Rules]
[Pages 17750-17756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8608]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[LA-001; FRL-5185-4]


Clean Air Act Proposed Full Approval of Operating Permits 
Program; Louisiana Department of Environmental Quality

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed full approval.

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SUMMARY: The EPA proposes to rescind the proposed interim approval of 
the Louisiana Operating Permits Program published in the Federal 
Register (see 59 FR 43797, August 25, 1994) (hereafter Interim Approval 
Notice) and propose full approval of the Operating Permits Program as 
revised by the State's November 16, 1994, submittal. The proposed 
interim approval in the Interim Approval Notice was based upon the 
Operating Permits Program submitted by the Governor of Louisiana for 
the Louisiana Department of Environmental Quality (LDEQ) and received 
by the EPA on November 15, 1993. On November 16, 1994, the State 
submitted material revisions adequately addressing the issues raised by 
the EPA in the Interim Approval Notice and adding insignificant 
activities criteria to the Louisiana Operating Permits Program. This 
revised Operating Permits Program will provide for the issuance of 
operating permits to all major stationary sources and to certain other 
sources with the exception of sources on Indian Lands, in compliance 
with the Federal requirements.

DATES: Comments on this proposed action must be received in writing by 
May 8, 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 full approval 
are available for inspection during normal business hours at the 
following locations. Interested persons wanting to examine these 
documents should make an appointment with the appropriate office at 
least 24 hours before visiting day.
    Environmental Protection Agency, Region 6, Air Programs Branch (6T-
AN), 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733. Louisiana 
Department of Environmental Quality, Office of Air Quality, 7290 
Bluebonnet Boulevard, P.O. Box 82135, Baton Rouge, Louisiana 70884-
2135.

FOR FURTHER INFORMATION CONTACT: Joyce P. Stanton, New Source Review 
Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733, telephone 214-665-7218.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the Clean Air Act as amended on 
November 15, 1990 (``the Act''), the 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 a State Operating 
Permits Program (see 57 Federal Register 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.
    The Act requires that States develop and submit these Operating 
Permits Programs to the EPA by November 15, 1993, and that the EPA act 
to approve or disapprove each Operating Permits Program within one year 
after receiving the submittal. The EPA's Operating Permits Program 
review occurs pursuant to section 502 of the Act and the part 70 
regulations, which together outline criteria for approval and 
disapproval. The EPA proposed interim approval in the Interim Approval 
Notice on August 25, 1994, for the Operating Permits Program submitted 
by the LDEQ on November 15, 1993. However, 40 CFR 70.4(e)(2) allows the 
Administrator to extend the review period of a State's submittal if the 
State's submission is materially altered during the one-year review 
period. This additional review period may not extend beyond one year 
following receipt of the revised submission. On November 16, 1994, the 
EPA received material changes to Louisiana's Operating Permits Program 
from the Governor of Louisiana on behalf of the LDEQ. These changes 
included regulations adopted to add insignificant activities criteria, 
and to address issues raised in the Interim Approval Notice. The EPA 
will act expeditiously to promulgate a final notice on the State's 
revised Operating Permits Program within one year of the November 16, 
1994, revised submittal. The publication of this proposal allows the 
public the opportunity to review and comment on the changes contained 
in the revised submittal.
    At this time, the EPA proposes to rescind the interim approval 
proposed [[Page 17751]] in the Interim Approval Notice and instead 
proposes full approval of the Operating Permits Program as revised by 
the November 16, 1994, submittal. The Interim Approval Notice had a 30-
day comment period which was extended an additional 30 days to October 
26, 1994 (see 59 FR 50537, October 4, 1994). The comments received on 
issues discussed in the Interim Approval Notice during that comment 
period are discussed in this notice together with a discussion of the 
revisions to the State's Operating Permits Program received on November 
16, 1994.
II. Proposed Action and Implications

A. Analysis of State Submission

    1. Confidentiality Provisions. In the Interim Approval Notice, the 
EPA stated that, while the State statute provided that certain 
environmental information such as air emissions data may not be held 
confidential, it was not clear whether these confidentiality provisions 
could be interpreted to protect the contents of the permit itself from 
disclosure. The Interim Approval Notice stated that the LDEQ must 
either submit an Attorney General's Opinion demonstrating that the 
State's statute is interpreted not to allow any portion of a permit to 
be held confidential, consistent with section 503(e) of the Act, or 
revise Louisiana Administrative Code (LAC) 33:III.Chapter 5, section 
517.F (permit regulations) to clarify that no portion of the permit may 
be held confidential. In response to this statement in the Interim 
Approval Notice, the LDEQ commented that it did not currently protect 
from disclosure as confidential any permit issued under LAC 
33.III.Chapter 5, and that the LDEQ has adopted a conservative policy 
in interpreting the reference to ``emissions data'' in a manner which 
limits the grant of confidentiality under the Louisiana statute. The 
LDEQ stated, however, that in the interest of cooperation, it would 
revise its regulations. The November 16, 1994, submittal contained a 
revision to LAC 33:III.517.F which requires that no permit or portion 
of a permit issued to a source in accordance with Louisiana's Operating 
Permits Program shall be held confidential. This regulatory revision 
has adequately addressed the EPA's concern regarding confidentiality 
and is no longer an interim approval issue.
    2. Requirement that No Major Source be Exempt from Part 70 
Requirements Because a Research and Development (R&D) Facility is Co-
located with the Source. In the Interim Approval Notice, the EPA 
explained that LAC 33:III.501.B.7 allows the permitting authority to 
consider a certain complex within a facility as a source separate from 
the facility with which it is co-located, provided that the complex is 
used solely for R&D of new processes and/or products, and is not 
engaged in the manufacture of products for commercial sale. The EPA 
noted that this regulation was inconsistent with 40 CFR 70.3 which 
requires that a State's Operating Permits Program provide for the 
permitting of all major sources, and 40 CFR 70.4(b)(3)(i) which 
requires that the State demonstrate adequate legal authority to issue 
permits and assure compliance with each applicable requirement by all 
part 70 sources.
    The Interim Approval Notice explained that 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 EPA concluded that the Louisiana 
permit regulations could cause certain part 70 major sources, as 
defined in 40 CFR 70.2, or portions of such sources with the same 
Standard Industrial Classification (SIC) code, 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 that all part 70 
requirements for those sources are met.
    The Interim Approval Notice went on to state that for full part 70 
approval, the LDEQ would be required to revise its permit regulations 
and demonstrate that no source, or portion of a source, which would be 
defined as major under 40 CFR 70.2 would be exempted from part 70 
requirements because an R&D facility is co-located with the source.
    One commenter objected to the EPA's proposed action related to the 
R&D issue and stated that by limiting the scope of the exemption to R&D 
facilities with different SIC codes, the EPA has virtually eliminated 
any relief for R&D facilities. The commenter stated that, since R&D 
activities are so limited in time, scale, and actual production, 
subjecting these activities to the Operating Permits Program 
requirements unnecessarily burdened research by companies as well as 
the State's Operating Permits Programs. This commenter also requested 
that any guidance concerning R&D facilities be published for public 
comment as part of future part 70 rulemakings. The EPA's position 
continues to be that 40 CFR part 70 allows R&D facilities to be treated 
separately in cases where the R&D facility has a different two-digit 
SIC code and is not a support facility.
    The LDEQ commented that its regulatory provision cited as deficient 
on this point had been incorporated into the State's Operating Permits 
Program based on the State's understanding of guidance provided by the 
EPA in the preamble to the part 70 regulations. In the Interim Approval 
Notice, the EPA explained that the preamble language was intended to 
clarify the flexibility in 40 CFR part 70 for allowing R&D facilities 
to be treated separately from the manufacturing facilities with which 
they are co-located where the R&D facility has a different two-digit 
SIC code and is not a support facility. This approach is consistent 
with the treatment of R&D facilities in the New Source Review program. 
In response to the Interim Approval Notice and in an effort to receive 
full approval of Louisiana's Operating Permits Program, the LDEQ has 
revised LAC 33:III.501.B.7 to include a provision that an R&D facility 
may be considered separately provided the facility has a different two-
digit SIC code from, and is not a support facility of, the source with 
which it is co-located. This revision was included in the November 16, 
1994, submittal. This change adequately addresses the EPA's concern and 
the State's treatment of R&D facilities is no longer an interim 
approval issue.
    3. Acid Rain Application Deadlines. In the Interim Approval Notice, 
the EPA discussed LAC 33.III.507.C.1.b which contained the deadlines 
for submittal of acid rain permit applications. Although this section 
purported to cover all relevant dates for submittal of acid rain permit 
applications, this section did not contain the deadlines required by 40 
CFR 72.30(b)(2)(iii) for new units and for units that did not serve a 
generator with a name plate capacity greater than 25 Megawatts 
electrical on November 15, 1990, but which served such a generator 
after November 15, 1990. In the Interim Approval Notice, the EPA noted 
that LAC 33:III.505.D.2 contains the deadlines for submittal of acid 
rain permit applications consistent with those required by title IV of 
the Act, but that it contradicted LAC 33.III.507.C.1.b. The Interim 
Approval Notice explained that, even though LAC 33.III.505.A.4 provides 
that Federal acid rain requirements applicable to an affected source 
shall supersede LAC 33:III.Chapter 5 of the Louisiana Regulations where 
the two are inconsistent, the inconsistency between LAC 33.III.505.D.2, 
507.C.1.b and the Federal acid rain regulations created a lack of 
clarity and should be eliminated. The Interim Approval Notice required 
that, for full part 70 approval, LAC 33.III.507.C.1.b be revised to 
require the [[Page 17752]] affected sources to conform with the 
deadlines in LAC 33.III.505.D.2.
    The LDEQ commented that the provisions of LAC 33.III.507.C.1.b 
cited by the EPA in the Interim Approval Notice as creating an interim 
approval issue were incorporated by the LDEQ in response to an earlier 
EPA comment on the LDEQ's proposed Air Quality regulations. The State 
responded by stating that, despite the error in LAC 33.III.507.C.1.b, 
LAC 33.III.505.A.4 and 505.D.2 would still require sources to comply 
with all Federal acid rain deadlines. However, the November 16, 1994, 
Operating Permits Program submittal included a revision to LAC 
33.III.507.C.1.b to clarify the acid rain permit application submittal 
deadlines as requested by the EPA. This revision adequately addresses 
the EPA's concern and, therefore, this is no longer an interim approval 
issue.
    4. Provision for Administrative Amendments. In the Interim Approval 
Notice, the EPA stated its concern that LAC 33.III.521.A.6 could be 
interpreted to allow administrative amendments to permits to 
incorporate changes authorized by 40 CFR 70.4(b)(14). These ``off-
permit'' changes, which are not addressed or prohibited by the permit, 
may be made under part 70 without permit revisions. However, the 
Interim Approval Notice explained that the part 70 rule contains no 
authority for such changes to be incorporated into operating permits 
except through the appropriate part 70 permit procedures for minor or 
significant modifications. In the Interim Approval Notice, the EPA 
stated that, for full part 70 approval, section 521.A.6 of the permit 
regulations must be revised to eliminate administrative amendments for 
this type of change.
    LAC 33.III.521.A.6 also allows changes to be made to operating 
permits by administrative amendment where the State's permitting 
authority has determined they are similar to the changes listed in LAC 
33.III.521.A. The Interim Approval Notice explained that part 70 allows 
changes submitted as part of a State's part 70 program, in addition to 
those specified in 40 CFR 70.7(d)(1), to be made as administrative 
amendments where the EPA Administrator determines those changes to be 
similar to the changes listed in 40 CFR 70.7(d)(1)(i)-(iv). However, no 
such proposed changes were submitted by the State as part of its 
Operating Permits 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 70.7(d)(1)(vi). 
The Interim Approval Notice required that, for full part 70 approval, 
this defect in LAC 33.III.521.A.6 of the permit regulations must be 
corrected.
    The LDEQ commented that the cited provision was intended by the 
State to allow the LDEQ discretion in revising permits for terms and 
conditions altogether outside the scope of 40 CFR part 70 and would not 
circumscribe 40 CFR part 70. However, to receive full approval, LAC 
33.III.521.A.6 has been revised to clarify that this provision can be 
used solely for State-only changes involving terms and conditions which 
are not federally enforceable. These revisions were included in the 
November 16, 1994, submittal and adequately address the EPA's concerns. 
Therefore, this is no longer an interim approval issue.
    5. Requirement to Keep Records for Five Years. In the Interim 
Approval Notice, the EPA cited the 40 CFR 70.8(a)(3) requirement that 
each State permitting authority keep for five years such records as the 
Administrator may reasonably require to ascertain whether the State 
program complies with the requirements of the Act and 40 CFR part 70. 
While 44 Louisiana Revised Statute (L.R.S.) section 1 contains a very 
broad definition of ``public records,'' 44 L.R.S. section 36 requires 
the records to be kept for only three years unless a longer formal 
retention schedule has been developed. The Interim Approval Notice 
required as a condition of full part 70 approval, a statutory change or 
a supplemental Attorney General's Opinion demonstrating how the current 
statute ensures that the required records will be kept for at least 
five years.
    The LDEQ commented that it intended to keep records for five years, 
and that it believed that 40 CFR part 70 did not require a permit rule 
ensuring that records be retained for five years. It remains the EPA's 
position that because the language in the Louisiana Statute does not 
appear to ensure that records be retained for five years, 40 CFR 
70.8(a)(3) requires either an Attorney General's Opinion demonstrating 
how this statute ensures a five-year retention of these records or a 
statutory or regulatory change. In the interest of obtaining full 
approval, the LDEQ revised LAC 33.III.533.B.5. As revised, LAC 
33.III.533.B.5 provides that the permitting authority shall keep for 
five years such records and submit to the EPA such information as the 
Administrator may reasonably require to ascertain whether the State 
Operating Permits Program complies with the requirements of part 70 and 
the Act. This revision, which was included in the November 16, 1994, 
submittal, adequately addresses the EPA's concern, and records 
retention is no longer an interim approval issue.
    6. Significant Modification Procedures. In the Interim Approval 
Notice the EPA stated its concern about the lack of clarity of LAC 
33.III.527.A.3. This provision allowed certain changes that rendered 
existing compliance terms irrelevant to be incorporated through minor 
modification procedures. The changes cited appeared to be of the type 
described in 40 CFR 70.4(b)(14), ``off-permit'' changes. However, the 
State's provision was unclear, and the Interim Approval Notice 
explained that, to remedy this ambiguity, the State should add language 
clarifying that the modification is one which would qualify as a change 
under 40 CFR 70.4(b)(14), because it is not addressed or prohibited by 
the permit and would otherwise qualify for treatment as a minor 
modification under 40 CFR 70.7(e)(2)(i)(A).
    The LDEQ commented that the cited State provision was meant only to 
clarify that obsolete compliance measures could be removed from the 
permit without requiring a significant permit modification. In the 
interest of obtaining full approval, however, the LDEQ deleted LAC 
33.III.527.A.3 in its entirety. This revision, which was included in 
the November 16, 1994, submittal, has adequately addressed the EPA's 
concern, and the previously noted ambiguity is no longer an interim 
approval issue.
    7. Permit Conditions. In the Interim Approval Notice, the EPA 
explained that even though the permit content requirements of 40 CFR 
70.6(a) are met by the model permit submitted in Volume III of the 
State's original part 70 submittal, 40 CFR 70.4(b)(16) also requires 
regulatory provisions in the State's program to implement the 
requirements of 40 CFR 70.6 and 70.7. The EPA noted that LAC 
33.III.501.C.5 and 6 speak generally to permit terms and conditions, 
but do not set out all requirements for each operating permit as 
required.
    Specifically, the EPA noted that these State provisions did not 
include a requirement that the permit specify the origin of and 
reference the authority for each term or condition, nor did they 
identify differences in form from the applicable requirements upon 
which the terms were based or contain various other elements required 
by 40 CFR 70.6. The Interim Approval Notice explained that 40 CFR 
70.6(a) includes requirements for emission limitations, monitoring, and 
recordkeeping, and specifies that the regulation must state that no 
permit revision shall be required under any approved economic 
[[Page 17753]] incentive, marketable permits, or similar program. The 
Interim Approval Notice stated that a severability clause is also 
required to ensure the continued validity of the various permit 
requirements in the event of a challenge to any portion of the permit. 
The EPA stated that these elements must be addressed in the permit 
regulations in order to afford citizens the opportunity to legally 
challenge permits. The Interim Approval Notice stated that, although 
some of these elements are contained in the State's model operating 
permit, one condition of full part 70 approval would be that the permit 
regulations be revised to require that all permit elements of 40 CFR 
70.6(a) be included in each permit.
    In its comments, the LDEQ stated its belief that the model permit 
forms and applications submitted with the original Operating Permits 
Program submittal adequately addressed this issue. However, in an 
effort to obtain full approval, the LDEQ has revised LAC 33.III.507.B.2 
to incorporate by reference the provisions of 40 CFR 70.6 as in effect 
on July 21, 1992. This revision was submitted with the November 16, 
1994, submittal and adequately addresses the EPA's concern. Therefore, 
this is no longer an interim approval issue.
    8. Title I Modifications and Case-by-case Determinations. In the 
Interim Approval Notice, the EPA discussed the State's definition of 
the phrase ``title I modification.'' At the time of the Interim 
Approval Notice, the EPA believed that for a State's program to be 
fully approvable, it would be necessary for the State's definition of 
``title I modification'' to be interpreted to include literally any 
change at a source that would trigger permitting authority review under 
regulations approved or promulgated under title I of the Act. This 
would include State preconstruction review programs approved into the 
State Implementation Plan under section 110(a)(2)(C) of the Act and 
regulations addressing source changes that trigger National Emission 
Standards for Hazardous Air Pollutants established pursuant to section 
112 of the Act prior to the 1990 amendments. LAC 33.III.502 defines 
``title I modification'' as a change at a site that qualifies as a 
modification under section 111 of the Act or section 112(g) of the Act, 
or that results in a significant net emissions increase under part C or 
part D of the Act. In the Interim Approval Notice, the EPA required 
that the LDEQ revise the definition of ``title I modification'' in 
order to receive full approval.
    The LDEQ commented that it believed the part 70 regulations clearly 
allowed ``minor'' preconstruction changes to be processed as minor 
permit modifications under part 70. The LDEQ further stated its belief 
that States which allowed minor preconstruction changes to be processed 
as minor operating permit modifications should be approved, and to do 
otherwise, would cause the States to suffer significant negative 
impact.
    The American Forest and Paper Association (AF & PA) stated that the 
EPA's interpretation set out in the Interim Approval Notice was without 
legal basis, and that such an interpretation failed to take into 
account the numbers of additional source modifications which would be 
required to be processed under the significant modification procedures 
of title V of the Act. The AF & PA stated its belief that such an 
interpretation would further have potentially devastating consequences 
on the AF & PA's members doing business in Louisiana.
    The Louisiana Chemical Association disagreed with the EPA's 
position that Louisiana's definition of ``title I modification'' must 
be revised for full approval, and provided legislative history excerpts 
in support of its interpretation of the term ``title I modification.''
    On August 29, 1994, the EPA proposed revisions to the interim 
approval criteria in 40 CFR 70.4(d) to allow State Operating Permits 
Programs with a narrower definition of ``title I modification'' to 
receive interim approval (See 59 FR 44572, August 29, 1994). Following 
is a discussion of points noted in that publication.
    The EPA intended to finalize its revisions to the interim approval 
criteria under 40 CFR 70.4(d) before taking action on part 70 Operating 
Permits Programs submitted by the States. However, publication of the 
proposed revision was delayed until August 29, 1994, and several 
requests to the EPA to extend the public comment period further delayed 
final action on the revisions. Given the importance of the issues in 
that rulemaking to States, sources, and the public, but mindful of the 
need to take action quickly, the EPA agreed to extend the comment 
period until October 28, 1994 (see 59 FR 52122, October 14, 1994). 
Consequently, final action to revise the interim approval criteria will 
not occur before the deadline for EPA action on State programs that 
were submitted on or before November 15, 1993. The EPA believes it 
would be inappropriate to delay action on these States' Operating 
Permits Programs until final action is taken on the interim approval 
revisions. The EPA also believes it would be inappropriate to grant 
interim approval to Louisiana's Operating Permits Program on this issue 
before final action is taken to revise the current interim approval 
criteria of 40 CFR 70.4(d) in a manner which would provide a legal 
basis for such an interim approval. Prior to the EPA's final 
promulgation of interim approval criteria, Louisiana may maintain and 
implement the narrower definition of ``title I modification.'' Upon the 
EPA's final decision of what constitutes a ``title I modification,'' if 
the EPA's definition differs from Louisiana's current definition, the 
State will be required to revise its definition in accordance with the 
EPA's final definition.
    The EPA is allowing this approach to ``title I modification'' for a 
number of reasons. First, the EPA has not yet conclusively determined 
that a narrower definition of ``title I modification'' is incorrect and 
thus a basis for disapproval (or even interim approval). The EPA has 
received numerous comments on this issue as a result of the August 29, 
1994, FR notice, and the EPA cannot and will not make a final decision 
on this issue until it has evaluated all of the comments. Second, the 
EPA believes that the Louisiana Operating Permits Program should not be 
disapproved because the EPA itself has not yet been able to resolve 
this issue through rulemaking. Moreover, disapproving Operating Permits 
Programs from States such as Louisiana that submitted their Operating 
Permits Program to the EPA on or before the November 15, 1993, 
statutory deadline could lead to the unfair result that States which 
were late in submitting Operating Permits Programs could take advantage 
of revised interim approval criteria if and when these criteria become 
final. In effect, States would be severely penalized for having made 
timely program submissions to the EPA. Finally, disapproval for a 
State's Operating Permits Program for a potential problem that 
primarily affects permit revision procedures would delay the issuance 
of part 70 permits, hampering State/Federal efforts to improve 
environmental protection through the operating permits system.
    For the reasons mentioned above, the EPA is approving the Louisiana 
Operating Permits Program's use of a narrower definition of ``title I 
modification'' at this time. However, should the EPA in the interim 
approval criteria rulemaking make the final determination that such a 
narrow definition of ``title I modification'' is incorrect and that a 
revision of the interim approval criteria is warranted, the EPA will 
propose further action on [[Page 17754]] Louisiana's Operating Permits 
Program so that the State's definition of ``title I modification'' 
could become grounds for interim approval. A State Operating Permits 
Program like the one in Louisiana, which receives full approval of its 
narrower definition pending completion of the EPA's rulemaking, must 
ultimately be placed on an equal footing with States which receive 
interim approval in later months under revised interim approval 
criteria based on the same issue. Converting the full approval on this 
issue to an interim approval after the EPA completes its rulemaking 
will avoid this inequity. The EPA anticipates that an action to convert 
the full approval on the ``title I modification'' issue to an interim 
approval would be effected through an additional rulemaking, so as to 
ensure that there is adequate notice of the change in approval status.
    Questions have been raised on a national level concerning whether 
the 40 CFR 70.7(e)(2)(i)(A)(3) provisions prohibiting minor 
modifications for changes in ``case-by-case'' determinations would 
apply in the instance of a preconstruction permit in which the 
permitting authority, through a minor modification procedure, changes a 
source-specific control technology requirement not required under part 
C or D or section 111 or 112 of the Act, or an emission limitation 
determination established on a source-specific basis. At the time of 
the Interim Approval Notice, the EPA believed the better interpretation 
of 40 CFR 70.7(e)(2)(i)(A)(3) required that any requirement imposed on 
a source-specific basis, such as one in which the permitting authority 
has discretion in setting the requirement for the particular source, 
must be considered to be a ``case-by-case'' determination. Therefore, 
the EPA believed that a change involving a source-specific requirement 
in a preconstruction permit would be considered a ``case-by-case 
determination of an emission limitation'' under 40 CFR 
70.7(e)(2)(i)(A)(3), ineligible for processing as a minor permit 
modification.
    LAC 33.III.525.A.2.d allows the use of minor modification 
procedures for some changes which would be considered ``case-by-case'' 
emission limits under the EPA's narrower interpretation. The EPA is 
taking comment on whether a less narrow interpretation of ``case-by-
case'' is acceptable.
    Therefore, the EPA will not at this time construe 40 CFR 
70.7(e)(2)(i)(A)(3) to prohibit Louisiana from allowing minor 
preconstruction changes to be processed as minor permit modifications. 
Should the EPA's final interpretation be inconsistent with Louisiana's 
current regulations, the definition of ``case-by-case'' will also be an 
interim approval issue. The EPA anticipates that an action to convert 
the full approval on the ``case-by-case'' issue to an interim approval 
would be effected through an additional rulemaking, so as to ensure 
that there is adequate notice of the change in approval status.
    9. Insignificant Activities. As the Interim Approval Notice 
indicated, provisions to determine insignificant activities were not 
included with the State's original submittal. The State's later, 
November 16, 1994, submittal contained a list of insignificant 
activities and criteria for determining which activities were 
sufficiently insignificant to be exempt from the requirement to obtain 
a permit, or from inclusion in a permit (for a part 70 source engaged 
in other activities which must appear in permits), unless the LDEQ 
determines on a site-specific basis that such exemption is not 
appropriate. These insignificant activities were divided into four 
categories. The first category consisted of activities based on size or 
production rate that were required to be included in the application 
but not the permit. This is consistent with 40 CFR 70.5(c) which 
provides that, if approved by the EPA, a list of insignificant 
activities based on size or production rate may be exempted from 
inclusion in a part 70 permit, although they must still be included in 
the application. LAC 33.III.501.B.5 provides that any activity to which 
a State or Federal applicable requirement applies is not insignificant 
even if the activity meets the criteria of the ``Insignificant 
Activities List.'' Therefore such an activity must be included in the 
permit. The LDEQ has clarified in a letter that insignificant 
activities may not be exempted from major source applicability 
determinations. This is consistent with 40 CFR 70.3(c) and 70.5(c) 
which requires that the permitting authority include in the permit all 
applicable requirements for all relevant emissions units.
    As allowed by 40 CFR 70.5(c), LAC 33.III.501.B.5 contains a second 
category based on activities that do not need to be included in a 
permit application. This list includes activities such as maintenance 
of grounds, general repairs, lawn care, steam cleaning, certain 
painting activities, use of adhesives, office activities, vehicle 
emissions, etc. The third category of insignificant activities is based 
on type of pollutant. LAC 33.III.501.B.5 allows water vapor, oxygen, 
carbon dioxide, nitrogen, and hydrogen to be exempt from the permit 
application.
    The last category of insignificant activities is based on emissions 
levels. In order to use this category, the source must receive prior 
approval from the LDEQ, and all of the criteria must be met. These 
criteria include: (a) The emissions unit emits and has the potential to 
emit no more than five tons per year of any regulated air pollutant; 
(b) the emissions unit emits and has the potential to emit less than 
the minimum emission rate listed in Table 51.1, LAC 33.III.Chapter 51, 
for each Louisiana toxic air pollutant; (c) the emissions unit emits 
and has the potential to emit less than the de minimis rate established 
pursuant to section 112(g) of the Federal Act for each hazardous air 
pollutant; and (d) no enforceable permit conditions are necessary to 
ensure compliance with any applicable requirement.
    The EPA believes that these insignificant criteria are sufficient 
to ensure that every application contains the information needed to 
determine the applicability of, and to impose, any applicable 
requirement, or to evaluate the fee amount as required by 40 CFR 
70.5(c). The list and its criteria meet the requirements of 40 CFR part 
70 and therefore are approvable. The EPA will accept comments on the 
insignificant activities discussed herein, as well as other provisions 
of the State's revised submittal.

B. Discussion of Other Comments

    1. Section 112(g) Comments. Louisiana Mid-Continent Oil and Gas 
Association (LAMOGA) was concerned that the Louisiana Operating Permits 
Program was being approved prior to the finalization of Federal 
requirements regarding section 112(g) of the Act on modification of 
sources of hazardous air pollutants. The AF & PA commented that it 
believes the EPA's delegation to Louisiana of section 112(g) authority 
is unlawful and confusing to the regulated community, because the EPA 
has not issued any regulation to implement this statutory language and 
does not expect to finally adopt such a regulation for many months. The 
AF & PA opposes the approval of the Louisiana preconstruction permit 
rules for the implementation of section 112(g), because it believes 
that these rules were never intended to define or otherwise address 
issues such as ``de minimis'' and offsets. The AF & PA is concerned 
that sources would have no way to determine whether and when they are 
subject to the program until a final [[Page 17755]] Federal section 
112(g) rule is promulgated.
    In the Interim Approval Notice, the EPA also proposed to approve 
Louisiana's preconstruction program for the purpose of implementing 
section 112(g) during the transition period before a Federal rule had 
been promulgated implementing section 112(g). This proposal was based 
in part on an interpretation of the Act that would require sources to 
comply with section 112(g) beginning on the date of approval of the 
Operating Permits Program, regardless whether the EPA had completed its 
section 112(g) rulemaking. The EPA has since revised this 
interpretation of the Act in the Federal Register (see 60 FR 8333, 
February 14, 1995) (hereafter Interpretive Notice). The Interpretive 
Notice postpones the effective date of section 112(g) until after the 
EPA has promulgated a final rule addressing that provision. The 
rationale for the revised interpretation was explained in detail in the 
Interpretive Notice. The EPA's new position of not requiring the 
implementation of section 112(g) until the Federal 112(g) rule is 
promulgated renders moot the AF & PA comment regarding section 112(g).
    The Interpretive Notice explains that the EPA is still considering 
whether the effective date of section 112(g) should be delayed beyond 
the date of promulgation of the Federal rule to allow States time to 
adopt rules implementing the Federal rule. If a decision is made to 
allow such additional delay in the implementation of section 112(g), 
the EPA will announce that decision in the final section 112(g) 
rulemaking.
    2. Natural Resources Defense Council (NRDC) Comments. The NRDC 
objected to the approval of the Louisiana Operating Permits Program for 
the same reasons the NRDC objected to the EPA's part 70 regulation upon 
which the approval was based. The NRDC's earlier comments on the 
national proposed part 70 rulemaking were attached to its comments on 
the proposed approval of the Louisiana Operating Permits Program. The 
EPA believes the appropriate forum for pursuing objections to the legal 
validity of the part 70 rule is through a petition for review of the 
rule in the D.C. Circuit Court of Appeals; therefore, those part 70 
comments will not be addressed in this notice. Unless and until the 
part 70 rule is revised, the EPA must evaluate proposed part 70 
programs according to the rule currently in effect.
    3. Enhanced Monitoring. The LAMOGA expressed concern that the 
Louisiana Operating Permits Program was being approved prior to the 
finalization of Federal enhanced monitoring requirements. The LDEQ will 
implement the enhanced monitoring requirements of the Act and provide 
appropriate permit conditions after the Federal enhanced monitoring 
rules are finalized. The EPA will not delay approval of Louisiana's 
Operating Permits Program based on the fact that the Federal enhanced 
monitoring rule is not yet finalized.
    4. General Comments. The EPA received comments from Citizens for a 
Clean Environment and some comments from LAMOGA favorable to the 
Louisiana Operating Permits Program and requesting full approval for 
the program.

C. Provisions Implementing the Requirements of Other Titles of the Act

    By submitting the State's Operating Permits Program for approval, 
Louisiana commits to appropriately implementing and enforcing the 
existing and future requirements of sections 111, 112, and 129 of the 
Act, and all maximum achievable control technology (MACT) standards 
promulgated in the future, in a timely manner.
    Requirements for title V approval, specified in 40 CFR 70.4(b), 
encompass section 112(l)(5) requirements for approval of a program for 
delegation of Federal section 112 standards as they apply to part 70 
sources. The State of Louisiana 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.
    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 40 
CFR part 70. Therefore, as part of this proposal for full approval, 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 Federal standards as promulgated. 
At this time, the State plans to use the mechanism of incorporation by 
reference to adopt unchanged Federal section 112 requirements into its 
regulations. After this approval is made final, in cases where the 
State utilizes the mechanism of incorporation by reference, no 
additional Federal public comment period will occur prior to the 
transfer of authority for unchanged section 112 standards to the State. 
This approval for delegation of unchanged Federal section 112 standards 
applies to existing and future standards as they apply to sources 
covered by the part 70 program. The State retains the option at any 
time to promulgate the full text of the Federal standard unchanged or 
to request delegation of section 112 standards in the form of State 
regulations which the State demonstrates are equivalent to the 
corresponding section 112 provisions promulgated by the EPA instead of 
using the mechanism of incorporation by reference. If the State chooses 
either of these options, an approval under 40 CFR part 63 subpart E 
will be required.

D. Summary

    The State of Louisiana submitted to the EPA, under cover letters 
from the Governor dated November 4, 1993, and November 10, 1994, the 
State's Operating Permits Program and the State's revised Operating 
Permits Program, respectively. The original and revised submittals have 
been reviewed for adequacy under the requirements of title V of the Act 
and the 40 CFR part 70 regulations which together outline criteria for 
approval and disapproval. The results of this review are included in 
the technical support document. The EPA believes that the LDEQ, in its 
revised submittal, has adequately addressed all issues discussed in the 
Interim Approval Notice which proposed interim approval. The EPA 
believes the insignificant activities list and criteria are fully 
approvable. Therefore, at this time the EPA is proposing to grant full 
approval to the Louisiana Operating Permits Program. The EPA is 
soliciting comments on all aspects of this proposed full approval.

E. Options for Approval/Disapproval

    The EPA proposes to withdraw the proposed interim approval 
announced in the Interim Approval Notice and to fully approve the 
Operating Permits Program submitted to the EPA from the State of 
Louisiana on November 15, 1993, and revised on November 16, 1994. 
Louisiana has demonstrated that the program meets the minimum elements 
of a State Operating Permits Program as specified in 40 CFR part 70.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on Louisiana's revised submittal as 
discussed in this proposed full approval. Copies of the State's 
submittal and other information relied upon for the proposed full 
approval are contained in a docket maintained at the EPA Regional 
Office. The docket is an organized and complete file of all the 
[[Page 17756]] information submitted to, or otherwise considered by, 
the EPA in the development 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 May 8, 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

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

V. Miscellaneous

A. Proposed Full Approval

    Proposed full approval of the part 70 Operating Permits Program for 
the State of Louisiana.

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

    Dated: March 30, 1995.
Jane N. Saginaw,
Regional Administrator (6A).
[FR Doc. 95-8608 Filed 4-6-95; 8:45 am]
BILLING CODE 6560-50-P