[Federal Register Volume 60, Number 109 (Wednesday, June 7, 1995)]
[Proposed Rules]
[Pages 30037-30046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13926]



=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[TX-001; FRL-5217-7]


Clean Air Act Proposed Interim Approval Operating Permits Program 
for the State of Texas

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 Governor of Texas for 
the State of Texas for the purpose of complying with Federal 
requirements which mandate that States develop and submit to EPA 
programs for issuing operating permits to all major stationary sources, 
with the exception of sources on Indian Lands. Source category-limited 
interim approval was specifically requested by the Governor for this 
submission.

DATES: Comments on this proposed action must be received in writing by 
July 7, 1995.

ADDRESSES: Written comments on this action should be addressed to Ms. 
Jole C. Luehrs, Chief, New Source Review (NSR) 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 
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.
Texas Natural Resource Conservation Commission, Office of Air Quality, 
12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: David F. Garcia, New Source Review 
Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733, telephone 214-665-7217.

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 
(``the part 70 regulation''). 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 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 regulation which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, the EPA may grant the program interim approval 
for a period of up to two years. Where a State requests source 
category-limited interim approval and demonstrates compelling reasons 
in support thereof, the EPA may also grant such an interim approval. If 
the EPA has not fully approved a program by two years after the date of 
November 15, 1993 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 grant that approval for a period of two 
years following the effective date of final interim approval, and the 
interim approval could not be renewed. During the interim approval 
period, the State of Texas 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 Texas. 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 
provided in Regulation XII, Title 31 of the Texas Administrative Code 
(TAC).
    Following final interim approval, if Texas 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 Texas then failed to submit a 
corrective program that the EPA found complete before the expiration of 
that 18-month period, the EPA would be required to apply one of the 
sanctions [[Page 30038]] in section 179(b) of the Act, which would 
remain in effect until the EPA determined that Texas had corrected the 
deficiency by submitting a complete corrective program. Moreover, if 
the Administrator found a lack of good faith on the part of Texas, both 
sanctions under section 179(b) would apply after the expiration of the 
18-month period until the Administrator determined that Texas had come 
into compliance. In any case, if six months after application of the 
first sanction, Texas still had not submitted a corrective program that 
the EPA found complete, a second sanction would be required.
    If following final interim approval, the EPA were to disapprove 
Texas' complete corrective program, the EPA would be required to apply 
one of the section 179(b) sanctions on the date 18 months after the 
effective date of the disapproval, unless prior to that date Texas had 
submitted a revised program and the EPA had determined that it 
corrected the deficiencies that prompted the disapproval. Moreover, if 
the Administrator found a lack of good faith on the part of Texas, both 
sanctions under section 179(b) would apply after the expiration of the 
18-month period until the Administrator determined that Texas had come 
into compliance. In any case, if six months after application of the 
first sanction, Texas still had not submitted a corrective program that 
the EPA found complete, a second sanction would be required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the end of an interim approval period if Texas 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 Texas' 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 Texas 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 an operating 
permits program under State or local law or under an interstate compact 
meeting the requirements of title V of the Act. Texas submitted, under 
the signature of former Governor Ann W. Richards, the operating permits 
program submittal to be implemented in all areas of the State of Texas 
with the exception of Indian Lands. The State of Texas requested that 
the EPA approve its operating permit program as a source category-
limited interim program for a period of two years.
    In the State's operating permits program submittal, Texas does not 
assert jurisdiction over Indian lands or reservations. To date, no 
tribal government in Texas has authority to administer an independent 
air program in the State. Upon promulgation of regulations under 
section 301(d) of the Act, Indian tribes will be able to apply for 
treatment as States under the Act, and receive the authority from the 
EPA to implement an operating permits program under title V of the Act. 
The EPA will, where appropriate, conduct a Federal title V operating 
permits program in accordance with forthcoming EPA regulations, for 
those Indian tribes which do not apply for treatment as States under 
the Act.
    The Texas Air Control Board (TACB) was the traditional implementing 
authority for the Act and all of its amendments. The submittal, 
including the rules, were adopted by the TACB. The TACB's operations 
and legal responsibilities were consolidated with operations of other 
Texas environmental agencies. Therefore, effective September 1, 1993, 
the Texas Air Control Board became part of a new State of Texas 
environmental agency, the Texas Natural Resource Conservation 
Commission (TNRCC). All rules, permits, orders, and any other final 
actions of the TACB remain in full legal effect unless and until 
revised by the TNRCC.
    40 CFR 70.4(b)(1) requires that the submittal contain a program 
description of the State's operating permits program describing how it 
intends to carry out its responsibilities under the part 70 
regulations. The Texas Federal Operating Permits program description, 
volume 1 of the submittal, explains that the Texas operating permits 
program was developed to satisfy all of the requirements of the part 70 
regulation. The operating permit in Texas will be used to consolidate 
relevant applicable requirements into one permit document.
    The program description provides a broad overview of the State's 
program, a broad description of how the Federal operating permits 
program in Texas will be implemented in accordance with part 70, and a 
description of how the program will implement the applicable 
requirements set forth in other titles of the Act, specifically title 
I, title III, title IV, and title VII. The State projects over 3,000 
sites will be subject to the operating permits program.
    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 a State 
air pollution control agency that has independent legal counsel), 
demonstrating adequate authority to carry out all aspects of a title V 
operating permits program. The Texas Attorney General submitted such an 
opinion in Volume 5 (the submittal supplement), demonstrating adequate 
legal authority as required by Federal law and regulation for interim 
approval.
    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 permits program. The State addresses this requirement in the Texas 
Federal Operating Permits Program Submittal Supplement in Volume 5 (the 
submittal supplement). The supplemental volume contains a model permit, 
application forms (including the standard phase II acid rain forms), 
monitoring, recordkeeping and reporting forms, public notice examples 
and guidance to implement the operating permits program. The detailed 
guidance addresses many part 70 requirements including documentation on 
permit applicability, permit application procedures, permit issuance, 
permit revisions and reopenings, permit renewals, compliance plan and 
certifications, and monitoring, reporting and recordkeeping.
2. Regulations and Program Implementation
    The State of Texas has submitted TACB Regulation XII, Title 31 of 
TAC, Chapter 122--``Federal Operating Permits'' (``the Texas permit 
regulation'') and TACB General Rules, Title 31 of TAC, section 101.27 
(``the Texas fee regulation''), for implementing the State's operating 
permits program as required by 40 CFR 70.4(b)(2). Sufficient evidence 
of their procedurally correct adoption was submitted in the Texas 
Federal Operating Permits Program Volumes 1 and 2 of the 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 in 
Volumes 3 and 4.
    The following discusses how the Texas permit regulation meets or 
does not meet the existing part 70 regulation. However, due to pending 
litigation involving sections of the part 70 regulation, revisions have 
been proposed, and more proposed revisions may be forthcoming. Any 
revisions to [[Page 30039]] the part 70 regulation may alter or obviate 
the need for the State to make the regulatory changes identified in 
this notice. During the State's rulemaking process proposing to make 
changes necessary for full title V approval, the EPA will comment on 
the State's proposal using the criteria in whatever regulation is in 
place at that time. In the Federal Register notice proposing action on 
the State's submittal for full approval, the EPA will use the criteria 
in whatever is the final part 70 regulation, whether it be the existing 
July 21, 1992, regulation or a later version (``part 70'').
    The following requirements, set out in the part 70 regulation, are 
addressed in the State's submittal: (1) Provisions to determine 
applicability (40 CFR 70.3(a)): 31 TAC section 122.120; (2) Provisions 
to determine complete applications (40 CFR 70.5(a)(2)): 31 TAC section 
122.134 and the forms (40 CFR 70.4(b)(4)): Supplemental Volume, 
Operating Permits Guidance; (3) Public Participation (40 CFR 70.7(h)): 
31 TAC sections 122.150-122.155; (4) Provisions for minor permit 
modifications (40 CFR 70.7(e)(2)): 31 TAC sections 122.215-122.217; (5) 
Provisions for permit content (40 CFR 70.6(a)): 31 TAC sections 
122.141-122.145; (6) Provisions for operational flexibility (40 CFR 
70.4(b)(12)): 31 TAC section 122.221; (7) Provisions to determine 
insignificant activities (40 CFR 70.5(c)): 31 TAC section 122.010 
(definition of applicable requirement) and sections 122.215-122.217; 
(8) Enforcement provisions (40 CFR 70.4(b)(5) and 70.4(b)(4)(ii)): 
Supplemental Volume ``State of Texas Office of the Attorney General'' 
and Volume 3, ``Texas Health and Safety Code'', section 382.082(b).
    The following requirements of 40 CFR part 70 are addressed in the 
Texas permit regulation:
    (a) Applicability criteria, including any criteria used to 
determine insignificant activities or emissions levels (40 CFR 
70.4(b)(2)). These provisions require all sources subject to the 
operating permits regulations to have a permit to operate that assures 
compliance by the source with all applicable requirements. The State is 
to submit a program that, at a minimum, assures adequate authority to 
issue permits in compliance with all the applicable requirements of 
title V of the Act and the part 70 regulation. 40 CFR 70.2 defines the 
term ``applicable requirement'' to include: any standard or other 
requirement provided for in the applicable implementation plan approved 
or promulgated by the EPA through rulemaking under title I of the Act 
that implements the relevant requirements of the Act; any term or 
condition of any preconstruction permit issued pursuant to regulation 
approved or promulgated through rulemaking under title I including Part 
C or D, of the Act; and additional requirements listed in 40 CFR 70.2. 
40 CFR part 70 requires all applicable requirements to be adequately 
addressed in the permit application and the operating permit.
    Section 122.010 of the Texas permit regulation defines the term 
``applicable requirement.'' Paragraph A of the definition makes 
specific reference to the Texas State Implementation Plan (SIP) 
approved chapters which the State considers relevant requirements of 
title I of the Act. Paragraph B uses the qualifier ``Part C (Prevention 
of Significant Deterioration) or Part D (Nonattainment Review)'' to 
further specify what constitute applicable requirements. This 
definition excludes certain minor NSR permitting activities as 
applicable requirements. Under the Texas permitting structure, any 
reasonably available control technology (RACT), maximum achievable 
control technology (MACT), section 112, or section 111 requirements 
applicable to minor units at major sources (whether reflected in a 
minor source permit or not) will be included as part of major source's 
original title V permit. Any non-RACT, non-111, and non-112 minor NSR 
permitting requirement will not be included in the major source's title 
V permit. For this reason, the proposed definition is inconsistent with 
the definition contained in the part 70 regulation. The EPA interprets 
the Federal definition of ``applicable requirement'' to include terms 
and conditions of ``any preconstruction permits issued pursuant to 
regulations approved or promulgated through rulemaking under title I'', 
including all minor new source review permits.
    However, on August 29, 1994, (see 59 FR 44574, Operating Permits 
Program Interim Approval Criteria), the EPA proposed revisions to 40 
CFR part 70 to allow interim approval for States such as Texas whose 
programs do not provide for incorporating into permits all requirements 
established through EPA-approved minor NSR programs, and that can show 
compelling reasons for receiving interim approval. The State of Texas 
has argued that the State's existing minor NSR program is so stringent 
as to make the integration of a minor NSR permit into part 70 permits 
infeasible, and from the standpoint of environmental protection, 
unnecessary. The EPA acknowledges that Texas' minor NSR program is a 
very stringent one. The Texas program requires authorization prior to 
the construction of any new facility or the modification of an existing 
facility. The term ``facility'' is broadly defined to include any 
``point of origin'' of air contaminants, so there is no opportunity for 
a source to ``net out'' of minor NSR. Moreover, Texas mandates best 
available control technology (BACT) as the emission control technology 
which applies to all minor NSR changes. Texas further subjects each 
minor NSR permit and permit amendment to a health effects evaluation 
which considers the cumulative effect of the proposed action, together 
with other air contaminant sources, on ambient air quality. Finally, 
where the Texas minor NSR program provides for public notice of a 
permit action, the program provides citizens the right to request a 
full evidentiary hearing on the action. Texas has also pointed to the 
exceptionally large number of part 70 sources which are located in the 
State and which are candidates for minor NSR. On the basis of the 
showing of compelling reasons described above, the EPA believes that a 
State or local permitting authority with minor NSR/part 70 integration 
difficulties such as Texas would warrant interim approval.
    The following sections of the permit regulation are directly 
related and are considered part of the minor NSR/part 70 integration 
issue: permit application (sections 122.130-122.139), permit revisions 
(sections 122.210-122.221), and permit content (section 122.141-
122.145). For full approval, these sections must be revised to be 
consistent with part 70.
    The August 29, 1994, proposal for Operating Permits Program Interim 
Approval Criteria requires that, in such interim approval situations, a 
State: (1) Include a statement in permits that certain minor NSR 
requirements are not included in permits issued during the interim 
period; (2) include a cross-reference in each operating permit to the 
minor NSR permit for that source; and (3) require reopening of permits 
for incorporation of minor NSR permit conditions upon completion of the 
interim approval period. If the August proposal is finalized, it is the 
EPA's position that the Texas program can be granted interim 
authorization as long as the State complies with the three conditions 
discussed above.
    Section 122.120 of the Texas permit regulation addresses 40 CFR 
70.3(a), regarding applicability of part 70. Section 122.120 requires 
the owner or operator of a site to submit an application for a Federal 
operating permit if the site contains one or more of the following: (1) 
Any major source as defined in section 122.010 (relating to 
[[Page 30040]] general definitions); (2) any affected source as defined 
in section 122.012 (relating to acid rain definitions); (3) any solid 
waste incineration unit required to obtain a Federal operating permit 
pursuant to section 129(e) of title I of the Act; and (4) any non-major 
source which the EPA, through further rulemaking, has designated as no 
longer exempt from the obligation to obtain a Federal operating permit. 
The State further identifies in sections 122.120(4) (A)-(C) any non-
major source subject to section 111, any non-major source subject to 
section 112 or ``any source in a source category designated by the 
Administrator pursuant to title III of the Act''. The State's provision 
regarding applicability is inconsistent with the Federal definition. 
Sections (4) (A) and (B) each appear to define non-major source as 
``any source, including an area source,'' subject to standards under 
section 111 or 112 of the Act. Section 122.120(4) could potentially be 
interpreted as exempting any source, even a major source, from the 
requirement to obtain a part 70 permit. For full approval, the State 
must revise sections 122.120(4) (A) and (B) to clarify source 
applicability. Additionally, section 122.120(4)(C) of the permit 
regulation defines non-major source as ``any source in a source 
category designated by the Administrator pursuant to Title III of the 
Act.'' 40 CFR 70.3(a) includes a number of different types of sources 
other than section 112 sources. For full approval, section 
122.120(4)(C) of the permit regulation must be modified to be 
consistent with 40 CFR 70.3(a).
    Section 122.010 of the Texas permit regulation defines major source 
as ``any site which emits or has the potential to emit air pollutants 
as described in subparagraphs (A), (B), and (C) of this definition.'' 
The permit regulation defines ``site'' to allow research and 
development (R & D) operations to be treated as a separate site from 
any manufacturing facility with which they are co-located. The State's 
permit regulation is 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.
    Confusion over this issue has occurred as a result of language in 
the preamble to the final July 21, 1992, 40 CFR part 70 rulemaking (57 
FR 32264). The preamble language indicates that States would have the 
flexibility in many cases to treat R & D facilities separately from the 
manufacturing facilities with which they are co-located. The EPA 
intended for this language to clarify the flexibility in part 70 for 
allowing R & D facilities to be treated separately in cases where the R 
& D facility has a different two-digit Standard Industrial 
Classification (``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.
    The Texas permit regulation could cause certain part 70 major 
sources, as defined in 40 CFR 70.2, or portions of such sources with 
the same 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 all part 70 requirements for these sources are met. 
For full part 70 approval, the Texas permit regulations must treat 
research and development activities consistent with part 70.
    Pursuant to 40 CFR 70.5(c), a permit application must describe all 
emissions of regulated air pollutants emitted from any emission unit. 
However, the Administrator may approve, as part of a State program, a 
list of insignificant activities and emission levels which need not be 
included in the permit application. The Texas operating permit program 
is designed to require the applicant to certify all emission units 
subject to an applicable or potential applicable requirement be 
described in the permit application.
    Section 122.132 of the Texas permit regulation discusses the 
required information the permittee is to include in the operating 
permit application. The permit application shall include for each 
emission unit, or group of similar emission units: (1) Information 
identifying each applicable requirement, any corresponding emission 
limitation and any corresponding monitoring, reporting, and 
recordkeeping requirements; and (2) information identifying potentially 
applicable requirements for that particular type of emission unit and 
the basis for the determination that those applicable requirements do 
not apply.
    Therefore, it is necessary for the applicant to identify all 
potential applicable requirements for each unit and give a basis for 
all negative applicable determinations. In other words, where a unit 
has a limitation or a specific characteristic of an emission unit that 
is limited by a regulation, but the applicant claims the unit is not 
subject to that regulation, the applicant is required to justify why. 
The applicant is responsible and is liable for including all applicable 
and potentially applicable requirements in the permit application. The 
potential applicable requirement language as a practical manner will 
require the source to characterize operations and emissions in a manner 
that is comprehensive enough to allow the State to independently verify 
which requirements are applicable. This process is subject to audits by 
State field inspectors, and action could be taken if violations of the 
Texas Permit Regulation exist.
    Pursuant to section 122.120(1) of the Texas permit regulation, the 
owner or operator of a site shall submit an application to the TNRCC if 
the source is a major source. Major source applicability is calculated 
on a site's potential to emit air pollutants. When the applicant is 
calculating major source applicability, all emissions at each unit will 
be accounted for at the site, regardless if a unit is potentially 
subject to an applicable requirement. The operating permit application 
requires the applicant to indicate all air pollutants that are major at 
the site. The operating permit will reference pre-construction permits 
in which specific emission data for each emission unit will reside. 
Additionally, more detail of specific emission data is contained in an 
emission inventory database.
    The design and approach the State uses to keep activities out of 
the operating permit application is considered practical and equivalent 
to part 70. This design attains the same results as a list of 
insignificant activities or emissions thresholds for units. The EPA 
believes the procedure set forth in the Texas permit regulation to 
identify insignificant activities achieves the goal and intent of the 
part 70 regulation and therefore is consistent and acceptable.
    The part 70 regulation requires the permit application to describe 
all emissions of regulated air pollutants emitted from any emissions 
unit. A regulated air pollutant includes any pollutant subject to a 
standard promulgated under section 112 or other requirement established 
under section 112 of the Act, including sections 112(g), (j), and (r). 
The Texas permit regulation defines the term ``air pollutant'' and does 
not define ``regulated air pollutant.'' It defines air pollutant to 
include ``any pollutant listed in section 112(b) or section 112(r) of 
the Act and subject to a standard promulgated under section 112 of the 
Act.'' The term ``air pollutant'' is also used in the Texas definitions 
for ``potential to emit'' and ``major source.'' This creates an 
inconsistency with the part 70 regulation, in which applicability is 
based on a source's potential to emit any air pollutant, 
[[Page 30041]] including those listed pursuant to section 112, rather 
than on pollutants which are subject to a promulgated standard. For 
full approval, the definition of ``air pollutant'' must be modified to 
be consistent with the part 70 regulation.
    Section 122.010 of the Texas permit regulation defines ``major 
source'' and further identifies the twenty-seven stationary source 
categories required to include a source's fugitive emissions in 
determining when a source is major. Category xxvii states that, for 
``any other stationary source category which, as of August 7, 1980, is 
being regulated under sections 111 or 112 of the Act,'' fugitives must 
be counted in determining if the source is major. This is inconsistent 
with the current 40 CFR 70.2 which requires fugitive emissions to be 
counted for all section 111 and 112 standards, and which does not limit 
the stationary source categories to those which existed as of August 7, 
1980. For full approval, the State must be consistent with part 70.
    Section 122.010 of the Texas permit regulation defines ``title I 
modification'' as a change at a site that qualifies as a modification 
under section 111 of title I of the Act or section 112(g) of title I of 
the Act, or as a major modification under part C or part D of title I 
of the Act. The State's definition of ``title I modification'' does not 
include changes reviewed under a minor source preconstruction review 
program (``minor NSR changes''), nor does it include changes that 
trigger the application of National Emission Standards for Hazardous 
Air Pollutants (NESHAP) established pursuant to section 112 of the Act 
prior to the 1990 Amendments. The EPA is currently in the process of 
determining the appropriate interpretation of ``title I modification''. 
As further explained below, the EPA has solicited public comment on 
whether the phrase ``modification under any provision of title I of the 
Act'' in 40 CFR 70.7(e)(2)(i)(A)(5) should be interpreted to mean 
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 minor State preconstruction review 
programs approved by the EPA as part of the State Implementation Plan 
under section 110(a)(2)(C) of the Clean Air Act and regulations 
addressing source changes that trigger the application of NESHAP 
established pursuant to section 112 of the Act prior to the 1990 
Amendments.
    In the August 29, 1994, proposed revisions to the interim approval 
criteria at 40 CFR section 70.4(d) the EPA proposes to allow State 
programs with a narrower definition of ``title I modification'' to 
receive interim approval (59 FR 44572). The EPA in that notice states 
its belief that the better reading of ``title I modification'' would 
include minor NSR and pre-1990 NESHAP requirements, but solicited 
public comment on the appropriate interpretation of the term (59 FR 
44573). If the definition of ``title I modification'' is finalized to 
include minor NSR changes, States such as Texas which have a narrower 
definition are eligible for interim but not final approval. If the 
final definition excludes changes reviewed under minor NSR and changes 
that trigger a pre-1990 NESHAP requirement, the State's definition of 
``title I modification'' would be consistent with part 70.
    For similar reasons, the EPA will not construe 40 CFR section 
70.7(e)(2)(i)(A)(3) to prohibit the State from receiving interim 
approval because it allows minor NSR case-by-case determination changes 
to be processed as minor permit modifications. Again, although the EPA 
has reasons for believing that the better interpretation of ``title I 
modification'' is the broader one, the EPA does not believe that it is 
appropriate to deny interim approval to a State such as Texas on such 
grounds.
    (b) Permit application requirements (40 CFR 70.5(c)). These 
requirements are addressed in sections 122.130-122.139 of the Texas 
permit regulation. A transition plan is included in the permit 
regulation which accounts for six SIC codes subject to the Texas 
interim approval program. The Texas permit regulation requires the 
owner or operator to submit a timely and complete application for each 
site subject to the requirements of the permit regulations.
    Pursuant to 40 CFR 70.5(c)(8)(iii)(C), a compliance schedule is 
required for sources out of compliance at the time of permit issuance. 
Section 122.132(b)(3)(B) of the Texas permit regulation addresses 
compliance schedules but appears to not require that schedules be at 
least as stringent as any consent decree or administrative order to 
which the source is subject. For full part 70 approval, the State must 
revise the permit regulation to be consistent with the part 70 
regulation.
    (c) Permit issuance and revision procedures (40 CFR 70.7). These 
requirements are provided for in subchapter C of the permit regulation. 
The State has requested that the EPA approve the proposed operating 
permits program as a source category-limited interim program for a 
period of two years. Section (II)(B) of this notice (referring to 
options for approval/disapproval and implications) further discusses 
the sites subject to the interim approval program and the Texas 
rationale for requesting interim approval.
    Section 122.241 of the Texas permit regulation requires permit 
applications for renewal at least six months prior to the date of 
permit expiration, but not more than eighteen months prior to the date 
of permit expiration. The permit regulation contains criteria for 
determining completeness of applications consistent with 40 CFR 
70.5(a)(2).
    Pursuant to 40 CFR 70.7, the State's program must prohibit a source 
from operating after the time that the source is required to submit a 
timely and complete application, except in compliance with a permit 
issued under a part 70 program. Section 122.138 of the Texas permit 
regulation allows an application shield if there is a timely and 
complete application for permit issuance, significant permit 
modification to a permit, or renewal. The site's failure to have a 
Federal operating permit is not a violation until the State takes final 
action on the permit. The application shield provided for in 40 CFR 
70.7(b) does not apply to significant modifications, but only applies 
to a ``complete application for permit issuance (including for 
renewal)''. For this reason, section 122.138 of the Texas permit 
regulation is inconsistent with 40 CFR 70.7. For full approval, the 
Texas permit regulation must be made consistent with the part 70 
regulation by deleting the reference in section 122.138 to 
``significant permit modification to a permit.''
    Sections 122.211-122.213 of the Texas permit regulation contain the 
requirements of 40 CFR 70.7(d) for administrative amendments, but do 
not require the Administrator's approval for similar changes allowed by 
section 122.211. This is inconsistent with 40 CFR 70.7(d)(1)(vi) which 
requires that, in order for changes other than those specified in 40 
CFR 70.7(d) (i) through (v) to be made as administrative amendments, 
they must first be determined by the Administrator, as part of the 
approved part 70 program, to be similar to those specified in 
70.7(d)(1) (i) through (iv). For full approval, section 122.211 must be 
revised to specifically list the types of changes that the State 
proposes to be eligible for processing as administrative amendments, 
for the Administrator's approval as part of the State's part 70 
program. [[Page 30042]] 
    Sections 122.215-122.217 of the Texas permit regulation requires 
certain permit revisions to be processed as ``permit additions''. The 
criteria for ``permit additions'' appear to be the same as the Federal 
criteria for some types of changes noted under minor permit 
modification provisions (40 CFR 70.7) and for some changes allowed as 
``off permit'' changes under 40 CFR 70.4(b)(14). The State proposes to 
implement the ``permit addition'' criteria in the interest of providing 
adequate, streamlined, and reasonable procedures for processing permit 
revisions. However, the EPA does not consider the streamlined 
procedures set out in sections 122.215-122.217 of the Texas permit 
regulation to be equivalent to the minor permit modification procedures 
found in the part 70 regulation. For full approval, the permit 
additions rule and all other Texas permit revisions rules must be 
modified to be consistent with part 70.
    The criteria to qualify for permit additions in section 122.215 
include the following: A change at a site may qualify as a permit 
addition if the change is not addressed or prohibited by the Federal 
operating permit, does not violate any existing term or condition of 
the Federal operating permit, does not violate any applicable 
requirement, and is not a title I modification.
    Section 122.215(c) also allows a change at a site to be processed 
as a permit addition if the change ``does not require or change a 
determination of an emission limitation under section 112(g) or section 
112(j) of title I of the Act * * *''. The Federal part 70 regulation 
contains a similar provision at 40 CFR 70.7(e)(2)(i)(A)(3) with respect 
to minor permit modification procedures, but the Federal provision is 
written in general terms to prohibit modifications that change a 
``case-by-case'' determination of an emission limitation or standard. 
Section 122.215(c) of the Texas permit regulation does not require 
case-by-case reasonably available control technology (RACT) changes to 
be processed as significant permit modifications. The EPA interprets 40 
CFR 70.7(e)(2)(i)(A)(3) provisions prohibiting changes in ``case-by-
case'' determinations to apply to RACT equivalency determinations. 
Therefore, the EPA does not consider the Texas provision to be 
equivalent to the part 70 regulation. For full approval, the permit 
regulation must be modified consistent with part 70.
    Section 122.215(c)(2) of the Texas permit regulation defines 
``significant changes to monitoring, reporting or recordkeeping 
requirements in the permit.'' The definition includes the ``removal of 
monitoring, recordkeeping, or reporting terms and conditions, or a 
substitution in those terms and conditions promulgated pursuant to 
Federal New Source Performance Standards or National Emission Standards 
for Hazardous Air Pollutants.'' This definition of significant changes 
to monitoring, reporting or recordkeeping requirements is acceptable 
under the current part 70 rule. If any additional rulemaking is 
promulgated by the EPA on this subject, the State must change its 
definition consistent with the new rulemaking.
    Section 122.216 of the Texas permit regulation allows applications 
for permit additions to be submitted to the State no later than 90 days 
after the owner or operator has obtained or qualified for a 
preconstruction authorization. However, under this rule after the 
source receives its preconstruction permit, it may make the requested 
operating change before submitting the operating permit application 
within the 90-day timeframe. 40 CFR 70.7(e)(2)(v) requires that no 
operating change be made if a source is changing a term in its original 
part 70 permit until the source has submitted the operating permit 
revision application. For full approval, the Texas permit regulation 
must be revised to be consistent with part 70.
    Section 122.217 addresses the procedures used to process permit 
additions and states ``the permit addition shall not become final until 
after the EPA's 45-day review period at renewal.'' For the EPA to 
consider permit additions equivalent to the procedures in 40 CFR 
70.7(e)(2), the EPA must have the opportunity to review and object to 
the issuance in writing within 45 days of receipt of the proposed 
permit. For full approval, the Texas permit regulation must be 
consistent with part 70 and allow for timely EPA review.
    The Texas permit addition procedures addressed in section 122.217 
provide that, within 90 days after receipt of a complete application, 
the agency is to determine that the requested modification does not 
meet the permit addition criteria and that it should therefore be 
reviewed under the significant modification procedure, or the agency is 
to revise the draft permit addition and transmit to the EPA the new 
proposed permit addition. This section does not include a deadline for 
the TNRCC to issue or deny a permit addition modification. The minor 
permit modification procedures contained in 40 CFR 70.7(e)(2) require a 
State to issue or deny the permit modification within 90 days or 15 
days after the end of the Administrator's 45 day review period, 
whichever is later. For full approval, the Texas permit regulation must 
be consistent with part 70.
    Subchapter E of the Texas permit regulation contains the acid rain 
provisions, as well as the deadlines for submitting acid rain permit 
applications. The provisions and timelines are consistent with those 
required by title IV of the Act. Section 122.139 of the Texas permit 
regulation regarding action on permit applications and section 122.136 
regarding additional information are consistent with 40 CFR 70.4(b)(6) 
and 70.7(a)(4).
    Pursuant to the part 70 regulation, a permit must be reopened and 
revised for cause when an additional applicable requirement becomes 
applicable to a permitted site with a remaining permit term of three or 
more years. Sections 122.231 and 122.233 of the Texas permit regulation 
discuss the criteria and procedures for permit reopenings and meet the 
requirements of 40 CFR 70.7(f).
    Provisions for public notice have been contained in section 122.153 
of the Texas permit regulation and in section 122.202(a)(3) for general 
permits. Those sections provide for procedures for public notice and an 
opportunity for public comment for all permit issuance proceedings, 
including initial permit issuance, significant modifications, renewals, 
and initial general permits. 40 CFR 70.7(h) requires the public notice 
to include the emissions change involved in any permit modification. 
For full approval, the State must revise its permit regulation to be 
consistent with part 70.
    Provisions for the EPA and affected State review to be accomplished 
in an expeditious manner as required by 40 CFR 70.8 have been provided 
for in sections 122.310 and 122.311 of the Texas permit regulation. 
Section 122.132 of the Texas permit regulation requires the applicant, 
rather than the permitting authority, to submit the permit application 
directly to the Administrator. This is acceptable and meets the 
requirements of 40 CFR 70.8.
    40 CFR 70.8(a)(3) requires each State permitting authority to keep 
records for five years. The State did not address this requirement in 
the Texas permit regulation. However, the TNRCC is subject to, and must 
comply with, the State of Texas Records Retention Schedule that is 
approved by the State Auditor's Office and the Texas State Library and 
Archives Commission (signed and dated April 7, 1993) requiring permit 
files to be maintained for three years after a file is closed. A closed 
file is one that is closed, terminated, expired, or settled. 
[[Page 30043]] Therefore, records will be maintained for the life of 
the permitted facility plus an additional three years. This is 
consistent with and meets the requirements of 40 CFR 70.8(a)(3).
    (d) Permit Content (40 CFR 70.6(a)). The permit content 
requirements are contained in sections 122.141-122.145 of the Texas 
permit regulation. 40 CFR 70.3(d) requires fugitive emissions from a 
part 70 source to be included in the operating permit in the same 
manner as stack emissions. The definition of an ``emission unit'' in 
section 122.010 of the Texas permit regulation includes fugitive 
emissions to be collectively considered as an emission unit. The 
operating permit will consolidate already existing federally 
enforceable requirements at relevant emission units. This raises the 
minor NSR/part 70 integration issue as discussed in section II(A)(2)(a) 
above because of the manner in which Texas has defined ``applicable 
requirement''. Under 40 CFR 70.3, a permit application must describe 
all emissions of regulated air pollutants emitted from any emission 
unit, including fugitive emissions from emission units not subject to 
an applicable requirement. Because of the issue discussed in section 
II(A)(2)(a) of this notice regarding the State's definition of 
applicable requirement, the State's operating permit program does not 
ensure that this part 70 requirement will be met. For full approval, 
Texas must revise the Texas permitting regulation to be consistent with 
part 70.
    The Texas permit regulation allows for such changes as emission 
trading and anticipated operating scenarios provided the permittee 
meets the requirements set forth in section 122.221 (operational 
flexibility), that the permittee comply with Regulation VI (Control of 
Air Pollution by Permits for New Construction or Modification), and 
provided the Texas SIP allows it. Regulation VI does not allow for a 
facility to ``trade emissions'' without best available control 
technology and an impacts review, nor does Regulation VI allow a source 
to vary its operating scenario, unless expressly allowed under an 
existing preconstruction authorization. The Texas permit regulation has 
adequately addressed emission trading and operating scenarios.
    40 CFR 70.6(b) requires all terms and conditions of a permit, 
including any provisions designed to limit a source's potential to 
emit, to be enforceable by the EPA and citizens, unless such terms and 
conditions are specifically designated as not federally enforceable. 
The State submitted section 122.122 (relating to establishment of 
federally enforceable restrictions on potential to emit) as a SIP 
revision on September 17, 1993. Section 122.122 establishes a procedure 
for grandfathered sources, (i.e. sources exempted from having a State 
NSR permit because they were constructed or operated prior to 1971), to 
submit a certification to the State that establishes a limit on 
potential to emit that is enforceable as a matter of State law. If 
section 122.122 is approved by the EPA into the SIP, these limits would 
be federally enforceable as well. The EPA is taking no action on 
section 122.122 in this notice. A separate action will be taken on the 
State's proposed SIP revision at a later date.
    On January 25, 1995, the EPA's Office of Air Quality Planning and 
Standards issued guidance which, among other things, announced the 
availability of a two-year transition period during which a State could 
give sources additional options for seeking federally enforceable 
limitations on potential to emit. These options allow a source with a 
practicably enforceable limit on potential to emit in a State 
enforceable permit and/or limitations established by State rule (such 
as by certificates of registration issued pursuant to section 122.122), 
to certify to the EPA that it accepts the Federal enforceability of 
that limit for the duration of the transition period. Certifications 
developed pursuant to section 122.122 will serve as the basis for 
exercise of this transition policy, provided Texas wishes to exercise 
this option, and an acceptable certification process is developed 
between Texas and the EPA addressing the source's acceptance of Federal 
enforceability.
    40 CFR 70.4 requires the State to issue permits for a fixed term of 
five years in the case of permits for acid rain and all other permits 
for a period not to exceed five years. 40 CFR 70.4(b)(3)(iv) provides 
that permits issued for solid waste incineration units combusting 
municipal waste subject to provisions under section 129(e) of the Act 
can have a fixed permit term of twelve years. Rather than making the 
distinction between five and twelve years, section 382.0543(a) of the 
Texas Clean Air Act provides that an operating permit is subject to 
renewal at least every five years. This approach for solid waste 
incineration units combusting municipal waste is acceptable and meets 
the requirements of the part 70 regulation. The Texas permit regulation 
does not, however, limit the general permit term to a maximum of five 
years. For full approval, the State of Texas must revise the general 
permit term to be consistent with part 70.
    Temporary sources, as allowed by 40 CFR 70.6(e), are provided for 
in section 122.204 of the Texas permit regulation. This section meets 
the requirements of the part 70 regulation.
    The concept of a permit shield is discussed in 40 CFR 70.6(f) as a 
means by which States could allow an enforcement shield as a permit 
provision, provided certain criteria were met. The State determined 
that the permit shield was too broad in scope and too difficult to 
apply properly. Therefore, the State chose not to include the permit 
shield as described in the part 70 regulation. Instead, the State 
adopted section 122.145(e) through which the State intends to provide 
for an enforcement shield in those situations where the interpretation 
of a rule is required and may be subject to change.
    The EPA believes the intent of the rule is worthy, but is concerned 
about its ambiguities. Therefore, the EPA believes it can not go 
forward with a final action granting interim approval to the State of 
Texas unless the EPA receives a written commitment from the board of 
the TNRCC or designee agreeing to process any actions taken pursuant to 
section 122.145(e) as follows: (1) The interpretation made pursuant to 
section 122.145(e) shall be limited to applicability issues only; (2) 
the EPA shall have the opportunity to review and veto every section 
122.145(e) action; and (3) the interpretation will be based upon the 
most current EPA guidance, and any guidance developed by the TNRCC must 
be in writing and preapproved by the EPA. Additionally, for full part 
70 approval, the TNRCC must revise section 122.145(e) of the Texas 
permit regulation to reflect the three previous provisions.
    Emergency provisions are provided for in 40 CFR 70.6(g). Section 
122.143 of the Texas permit regulation references chapter 101 (General 
Rules), which contains notification requirements for major upsets. 
Under this chapter, the owner or operator of a facility must notify the 
Executive Director of the TNRCC as soon as possible of any major upset 
condition which causes or may cause an excessive emission that 
contravenes the intent of the statute or the regulations. In the event 
that the information required in the notification is unknown at the 
time of the initial notification, then such information must be 
provided as soon as possible, and submitted as a written report no 
later than two weeks from the onset of the upset condition. This 
allowance for time of agency notification by the permittee is 
[[Page 30044]] inconsistent with the part 70 regulation. 40 CFR 
70.6(g)(3) requires the permittee to submit notice of the emergency to 
the permitting authority within two working days. For full approval, 
the Texas permitting rule must be consistent with the part 70 
regulation.
    The part 70 regulation requires an operating permits program to 
allow for operational flexibility. 40 CFR 70.4(b)(12) allows for 
``section 502(b)(10) changes without requiring a permit revision, if 
the changes are not modifications under any provision of title I of the 
Act and the changes do not exceed emissions allowable under the 
permit.'' ``Section 502(b)(10) changes'' are not defined or included in 
the Texas permit regulation; therefore, it is not clear what types of 
changes can be processed through the State's operational flexibility 
provision. Section 122.221 of the Texas permit regulation could be 
interpreted to allow changes which violate what the EPA considers an 
applicable requirement. This is inconsistent with the definition of 
``Section 502(b)(10) changes'' in the part 70 regulation. Therefore, 
for full approval, the State must revise its permit regulation such 
that the definition of ``Section 502(b)(10) changes'' is consistent 
with part 70.
    (e) Off-permit (40 CFR 70.4(b)(14) and 70.4(b)(15)). Section 
122.215 of the Texas permit regulation defines off-permit changes under 
part 70 as changes which qualify as permit additions. Because of the 
State's narrow definition of applicable requirement, some changes which 
would be allowed as ``off-permit'' changes under the Texas rule would 
not be considered ``off-permit'' under the Federal definition of 
changes which can be made without a permit revision under 40 CFR 
70.4(b)(14). Section (II)(A)(2)(a) of this notice identifies issues 
regarding the definition of applicable requirement that must be 
addressed prior to full approval.
3. Permit Fee Demonstration
    In the fee regulation, the State proposes to charge an emission fee 
for sources subject to title V in Fiscal Year 1994 (FY 1994) and FY 
1995 equivalent to at least the part 70 presumptive minimum fee of $25 
per ton of regulated air pollutants, adjusted per the consumer price 
index (CPI). The emission fee rate for FY 1994 is set at $25 per ton of 
regulated pollutants including carbon monoxide (CO). Texas does not 
charge fees above the 4,000 ton per year cap. The State will collect 
$40 million per year to support all applicable part 70 activities. The 
generation of $40 million in revenue, if CO emissions were excluded, 
corresponds to an average of $30.77 per ton of regulated pollutants. 
This average rate is above the presumptive minimum adjusted by the CPI. 
The emission fee rate for FY 1995 averages $26 per ton of criteria 
pollutants including the collection for CO emissions. The fee rate will 
be reviewed in early calendar year 1995 and every two years thereafter. 
The fee review will account for projected CPI adjustment, additional 
staffing needs, and/or emission reductions that may require increasing 
the fee rate.
    Pursuant to 40 CFR 70.4(b)(8), the State must include in the fee 
demonstration an estimate of the permit program costs for the first 
four years after approval and a plan detailing how the State plans to 
cover these costs. The EPA has received the TNRCC FY 1994 and FY 1995 
operating budget. Since the EPA has not received a complete four year 
projection, this will be required for full approval.
4. Provisions Implementing the Requirements of Other Titles of the Act
    The State of Texas request for approval of a part 70 program also 
serves as a request for approval of the State's rulemaking process as a 
mechanism to gain delegation, when requested by the State for a 
particular standard, of unchanged section 112 standards under the 
authority of section 112(l). At this time, the State plans to use the 
mechanisms of adoption-by-reference and case-by-case adoption to adopt 
unchanged Federal section 112 requirements into its regulations. The 
State of Texas may, at any time, exercise its option 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. The State will receive delegation of those remaining standards 
and programs through the section 112(l) delegation process.
    The radionuclide 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.
    Texas has demonstrated in its operating permits program submittal 
adequate legal authority to implement and enforce all section 112 
requirements through the title V permit. This legal authority is 
contained in Texas enabling legislation and in regulatory provisions 
defining ``applicable requirements'' and stating that the permit must 
incorporate all applicable requirements. The EPA has determined that 
this legal authority is sufficient to allow Texas to issue permits that 
assure compliance with all section 112 requirements.
    The State of Texas will pursue delegation of rules and programs, as 
appropriate, to implement and enforce the existing and future 
requirements of sections 111, 112, and 129 of the Act, and all MACT 
standards promulgated in the future, in a manner consistent with State 
law, to ensure all applicable requirements of part 70 are met.
    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 MACT emission limitation under 
section 112(g) will be met. The EPA has announced its 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 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.
    The State of Texas adopted, and incorporated by reference, the 
provisions of 40 CFR part 72 in effect on the date of this action for 
purposes of implementing an acid rain program that meets the 
requirements of title IV of the Act. It is the EPA's position that this 
State program meets the requirements of the Federal acid rain program.
5. Enforcement Provisions
    40 CFR part 70 requires each operating permit program to provide 
enforcement authority to address [[Page 30045]] violations of program 
requirements by permitted sources. The Texas enforcement provisions are 
contained in the Texas Clean Air Act (TCAA) and are discussed in the 
Attorney General's Opinion. Pursuant to 40 CFR 70.11(a)(3)(ii), the 
permitting authority shall have the authority to recover penalties 
against any person who knowingly violates any applicable requirement, 
any permit condition, or any fee or filing requirement. These fees 
shall be recoverable in a maximum amount of not less than $10,000 per 
day per violation. The TCAA contains provisions which exceed the 
$10,000 per day per violation for all cases except for the filing fee 
criminal enforcement provision. This filing fee provision contained in 
section 382.092 of the TCAA imposes a penalty for failing to pay a 
required fee which is punishable ``for an individual by a fine of not 
more than twice the amount of the required fee, confined in jail not to 
exceed 90 days, or both fine and confinement and, for a corporation or 
association, by a fine of not more than twice the amount of the 
required fee.'' The preamble to part 70 regulation recommends that 
State enforcement authorities consider as criminal penalties not only 
fines, but also incarceration, so that State prosecutors will have more 
inducement to prosecute environmental crimes. Because this provision 
imposes a range of fines, confinement in jail, and imprisonment, the 
EPA is proposing to accept that the TCAA meets the criminal enforcement 
provisions of part 70. The EPA believes the filing fee provision 
achieves the goal and intent of 40 CFR part 70. The EPA is soliciting 
comments on the proposed position.
    Texas' operating permits program submittal adequately addressed the 
enforcement requirements of 40 CFR 70.4(b)(4) and 70.4(b)(5) in Volume 
1 and the supplemental volume. The submittal contains permit program 
documentation such as draft copies of the permit forms, application 
forms, public notice forms, certification forms, and compliance/
enforcement reporting forms. Monitoring requirements are contained in 
this guidance material including the types of monitoring used to 
demonstrate compliance. However, this guidance may be subject to change 
once the part 64 enhanced monitoring rules are promulgated. The 
enforcement program is described in the document ``Guidance on 
Compliance and Enforcement Matters'' found in attachment IV of the 
State's submittal. Volume 1 contains a complete description of the 
State's compliance tracking and enforcement program which includes an 
agreement between the State and the EPA, entitled ``Fiscal Year 1993 
Memorandum of Understanding between the Texas Air Control Board and the 
U.S. Environmental Protection Agency.''
6. Summary
    The State of Texas submitted to the EPA its operating permits 
program, requesting the EPA to grant interim approval to the Texas 
operating permits program. The submittal has been reviewed for adequacy 
to meet the requirements of 40 CFR part 70 (1992). The results of this 
review are included in the technical support document, which will be 
available at the docket at the locations noted above. The submittal has 
adequately addressed all 11 elements required for interim approval as 
discussed in the part 70 regulation. However, the EPA has in this 
notice described inconsistencies between the Texas permit regulation 
and the part 70 regulation. These inconsistencies involve both the 
permit regulation and program implementation, with regard to 
applicability, permit application requirements, and permit issuance and 
revision. It is essential that these inconsistencies be remedied by the 
State consistent with the Act and 40 CFR part 70 prior to the EPA 
granting full approval of the State's operating permits program.
    Due to pending litigation involving sections of 40 CFR part 70, the 
part 70 regulation may be revised. Any final revisions may require the 
State to make regulatory and statutory changes.
    The State of Texas addressed all requirements necessary to receive 
interim approval of the State operating permits program pursuant to 
title V, 1990 Amendments and part 70 (1992).

B. Options for Approval/Disapproval and Implications

    Pursuant to 40 CFR 70.4(d), Texas requested that the EPA approve 
the Texas Operating Permits Program as a source category-limited 
interim program for a period of two years. The EPA is proposing to 
grant interim approval to the operating permits program submitted by 
Texas on November 15, 1993, for a period of two years.
    Volume 1 of the Texas operating permits program submittal includes 
the rationale for requesting interim approval. The State projects that 
over 3,000 major sources will be subject to the operating permits 
program. Many of these sources are complex. The EPA recognizes that a 
large percentage of the Nation's title V sources will be permitted by a 
single agency and that a ramp-up period is essential. The time 
following interim approval will allow the State to hire additional 
engineers and train experienced engineers to write quality permits that 
consolidate all applicable requirements into one document. Furthermore, 
the additional time is necessary to develop a computer information 
management system that will manage the permits, permit applications, 
and additional documentation. This computer system will be the 
mechanism used to interchange information between the TNRCC, the EPA, 
the affected States, the regulated community, and the general public. 
Such a database will give interested parties an efficient mechanism to 
review the current applicable requirements and the compliance status of 
a source. The EPA is satisfied that the State has demonstrated 
compelling reasons for a source category-limited interim approval.
    Between the interim program and the full program, the transition 
schedule requires the State to take final action on applications for 
400 sites each of the first two years, 1,000 sites the third year, and 
600 sites each of the last two years. Therefore, it is projected that 
60 percent of the sources required to obtain operating permits will 
obtain those permits in the first three years of the program.
    State-specific circumstances preclude the TNRCC from demonstrating 
coverage of sources which are responsible for at least 80 percent of 
the aggregate emissions during the interim period. The State will be 
required to permit complex stationary sources such as refineries and 
petrochemical plants. These complex plants can have as many as 3,000 
emission units per source. The State's rationale for requesting interim 
approval is to permit these complex sources toward the end of the 
permit issuance period (rather than during the first two years). The 
State designed the interim program to bring in similar types of sources 
and those which have the fewest number of emission points. This will 
enable the State to spend its resources on writing quality permits that 
are federally enforceable. The EPA is confident that the State is 
addressing enough sources in those first three years to represent a 
significant portion of the program.

III. Proposed Rulemaking Action

    In this action, the EPA is proposing source category-limited 
interim approval of the operating permits program submitted by the 
State of Texas. The program was submitted by the State to the EPA for 
the purpose of complying with Federal requirements [[Page 30046]] found 
in title V of the Act and in 40 CFR part 70, which mandate that States 
develop, and submit to the EPA, programs for issuing operating permits 
to all major stationary sources, and to certain other sources with the 
exception of Indian Lands.
    Requirements for title V approval, specified in 40 CFR 70.4(b), 
encompass section 112(l)(5) requirements for approval of a mechanism 
for delegation of Federal section 112 standards 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 interim approval, the EPA is 
also proposing to grant approval under section 112(l)(5) and 40 CFR 
63.91 of the State's mechanism for receiving delegation of section 112 
standards that are unchanged from Federal standards as promulgated when 
requested by the State. The State will receive delegation of the 
remaining standards through other section 112(l) delegation processes.
    The EPA has reviewed this submittal of the Texas operating permits 
program and is proposing source category-limited interim approval for a 
period of two years. Certain defects in the State's permit regulation 
and program implementation preclude the EPA from granting full approval 
of the State's operating permits program at this time. The EPA is 
proposing to grant interim approval, subject to the State obtaining the 
needed regulatory and program implementation revisions within 18 months 
after the Administrator's approval of the Texas 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 
interim approval. Copies of the State's submittal and other information 
relied upon for the proposed interim approval are contained in a docket 
maintained at the EPA Regional Office. The docket is an organized and 
complete file of all the information submitted to, or otherwise 
considered by, 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 July 7, 1995.

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    The EPA's actions under section 502 of the Act do not create any 
new requirements, but simply address operating permit 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

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

VI. Miscellaneous

A. Interim Approval

    Proposed interim approval of the part 70 operating permits program 
for the State of Texas.

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

    Dated: May 3, 1995.
A. Stanley Meiburg,
Deputy Regional Administrator (6D).
[FR Doc. 95-13926 Filed 6-6-95; 8:45 am]
BILLING CODE 6560-50-P