[Federal Register Volume 60, Number 136 (Monday, July 17, 1995)]
[Rules and Regulations]
[Pages 36361-36364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17214]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[KS-5-1-6958a; FRL-5250-4]


Approval and Promulgation of Implementation Plans and Section 
112(l) Program for the Issuance of Federally Enforceable State 
Operating Permits; State of Kansas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: This final action approves a revision to the State 
Implementation Plan (SIP) submitted by Kansas. The state's revision 
includes the creation of a class II operating permit program, and 
revisions and additions to existing SIP rules. The approval of the 
class II permitting program authorizes Kansas to issue Federally 
enforceable state operating permits addressing both criteria pollutants 
(regulated under section 110 of the Clean Air Act) and hazardous air 
pollutants (regulated under section 112).

DATES: This final rule is effective September 15, 1995 unless by August 
16, 1995 adverse or critical comments are received.

ADDRESSES: Comments may be mailed to Wayne A. Kaiser, Environmental 
Protection Agency, Air Branch, 726 Minnesota Avenue, Kansas City, 
Kansas 66101.
    Copies of the documents relevant to this action are available for 
public inspection during normal business hours at the: Environmental 
Protection Agency, Air Branch, 726 Minnesota Avenue, Kansas City, 
Kansas 66101; and EPA Air and Radiation Docket and Information Center, 
401 M Street, SW., Washington, DC 20460.

FOR FURTHER INFORMATION CONTACT: Wayne A. Kaiser at (913) 551-7603.

SUPPLEMENTARY INFORMATION:

I. Background

    Kansas recently restructured its air program rules as a result of 
the need to develop a major source operating permit program consistent 
with the requirements of 40 CFR part 70. Consequently, the state 
created a three-tiered permit program: class I, class II, and class 
III. Class I permits will be issued to part 70 major sources, class II 
permits to nonmajor sources and to those willing to take Federally 
enforceable operating restrictions to limit their potential-to-emit to 
nonmajor source levels, and class III permits for all other emission 
sources (i.e., sources with emission levels lower than the class II 
cutoff levels). This SIP revision includes revisions to existing SIP 
rules, including the definitions rule and construction permits rules, 
and new rules which create general permits and class II operating 
permits, including permits-by-rule. These rule revisions are the result 
of three state rulemakings, effective in 1993, 1994, and 1995.
    On February 17, 1995, the Secretary of the Kansas Department of 
Health and Environment (designee of the Governor) submitted the SIP 
revision and supporting information to the EPA Region VII 
Administrator. In a supplemental letter dated March 8, 1995, the state 
also requested that EPA approve the class II permitting rules under the 
authority of section 112(l) for the purpose of conferring Federally 
enforceable limitations on hazardous air pollutants (HAP). EPA's review 
and analysis of the entire state submittal is discussed below.
    For a more detailed discussion, please refer to the Technical 
Support Document (TSD) prepared for this document, which is available 
from the contact listed above.

II. Review of State Submittal

A. Rule Revisions

    K.A.R. 28-19-7, Definitions. Over 30 definitions were revised or 
added. New definitions were necessary due to the adoption of the Title 
V permitting rules and the related class II permitting rules. Some 
definitions were simply moved from existing rules to the definitions 
rule for the purpose of consolidating all definitions in one rule. 
Other revisions were nonsubstantive grammatical or clarifying 
revisions. A detailed discussion of each revision to this rule is 
contained in the TSD.
    K.A.R. 28-19-8, Reporting required. This regulation formerly 
described emission levels which triggered requirements to obtain 
construction and operating permits and approvals. Revisions were 
required to remove those provisions relating to operating permits that 
now appear in regulations relating specifically to the new class I and 
class II operating permits programs.
    K.A.R. 28-19-14, -14a, -14b, pertaining to permits and fees. These 
were revised because most of these provisions are now contained in new 
rules. Rule K.A.R. 28-19-14b was revoked in the 1994 revision, and -14a 
was revised in 1994 and revoked in 1995.
    K.A.R. 28-19-204, General provisions, permit issuance and 
modification; public participation. This new regulation includes 
general requirements for public participation in the permitting 
process, including construction permits and class II operating permits.
    K.A.R. 28-19-212, General provisions; approved test methods and 
emission compliance determination procedures. This rule includes most 
test methods required by other rules, including adoption by reference 
of methods in 40 CFR parts 51, 60, 61, and 63. In 58 FR 54677 (October 
22, 1993), the EPA announced that SIP calls pursuant to section 
110(k)(5) of the Act would be issued in order to implement the 
monitoring requirements of section 114(a)(3), including the periodic 
monitoring requirements for operating permits pursuant to sections 
502(b)(2) and 504. This SIP call is required, because existing SIPs are 
inadequate in that they may be interpreted to limit the types of 
testing or monitoring data that may be used for determining compliance 
and establishing violations.
    On May 6, 1994, the EPA notified the Governor of Kansas that an SIP 
revision was necessary to meet the 

[[Page 36362]]
aforementioned requirements of the Act. Submission of this rule 
revision fulfills this requirement. This revision provides that any 
credible evidence may be used for the purpose of establishing whether a 
violation has occurred at the source.
    K.A.R. 28-19-300 through 304. These regulations establish the 
procedures applicable to the issuance of permits and approvals to 
construct or modify new air sources. Major portions of these provisions 
were formerly contained in K.A.R. 28-19-8 and K.A.R. 28-19-14. The 
threshold criteria pollutant emission levels for obtaining a 
construction permit (K.A.R. 28-19-300(a)(1)) have been increased to 
make them consistent with prevention of significant deterioration (PSD) 
levels. Changing these threshold emission levels will not threaten 
maintenance of the ambient air quality standards in the state. Air 
quality modeling for criteria pollutants has been performed in 
connection with new and modified source permit applications over the 
past 10 years. The modeling results demonstrate that sources with a 
potential-to-emit of less than the PSD significance levels have not 
threatened the maintenance of air quality in Kansas.
    K.A.R. 28-19-300(b)(1) establishes the emissions thresholds for a 
construction approval. These thresholds are unchanged from K.A.R. 28-
19-8 with the exception of particulate matter for nonagricultural 
operations. That threshold has been changed from one or more pounds of 
particulate matter, including but not limited to PM10, during any 
one hour of operation, to the potential-to-emit either five pounds per 
hour of particulate matter or two pounds per hour of PM10. Based 
on prior modeling of sources of this size, Kansas has determined that 
this change does not threaten maintenance of the National Ambient Air 
Quality Standards.
    K.A.R. 28-19-302 provides for a construction permit to include a 
Federally enforceable operational restriction or permit conditions 
regarding air pollution control equipment in order to reduce the 
potential-to-emit. This allows sources to take Federally enforceable 
permit restrictions to reduce their potential-to-emit at the 
construction stage. The restrictions must meet the state's requirements 
for Federally enforceable operating permits in K.A.R. 28-19-501(b), 
discussed below.
    K.A.R. 28-19-400 through 404. These regulations establish 
procedures and conditions for the state to develop and issue general 
construction permits and class II general operating permits covering 
numerous similar sources. Sources that qualify for a general permit 
would then apply for coverage under the terms of the general permit. 
Under the Kansas regulations, general construction permits must be 
approved by EPA as SIP revisions before any source may construct under 
the permit.
    K.A.R. 28-19-500 through 502. These rules establish the general 
framework for eligibility of a source for a class I or class II 
operating permit.
    K.A.R. 28-19-540 through 546. These rules establish the class II 
operating permit procedures available for sources that would otherwise 
be required to obtain a class I permit.
    K.A.R. 28-19-561 through 563. These rules establish the conditions 
for issuance of a permit-by-rule to specific source categories. These 
source categories may limit their potential-to-emit to a level that 
removes them from the class I program, provided that the source meets 
the criteria established in these regulations and complies with the 
recordkeeping and reporting provisions, if applicable. The three source 
categories for which permit-by-rule are available are: reciprocating 
engines, organic solvent evaporative sources, and hot mix asphalt 
facilities.
B. Class II Operating Permit Program

    For many years, Kansas has been issuing permits for major new 
sources and for major modifications of existing sources. Throughout 
this time, Kansas has also been issuing permits establishing 
limitations on the potential emissions from new sources so as to avoid 
major source permitting requirements. This latter type of permitting 
has been the subject of various guidance from EPA, most notably the 
memorandum entitled ``Guidance on Limiting Potential to Emit in New 
Source Permitting'' dated June 13, 1989.
    The operating permit provisions in Title V of the Clean Air Act 
Amendments of 1990 have created interest in mechanisms for limiting 
sources' potential-to-emit, thereby allowing the sources to avoid being 
defined as ``major'' with respect to Title V operating permit programs. 
A key mechanism for such limitations is the use of Federally 
enforceable state operating permits (FESOP). EPA issued guidance on 
FESOPs in the Federal Register of June 28, 1989 (54 FR 27274). On 
February 17, 1995, Kansas submitted its newly adopted class II 
permitting rules to provide for FESOPs in Kansas. This rule would 
supplement the preexisting mechanism for establishing Federally 
enforceable limitations on potential-to-emit (i.e., new source 
permits). This rulemaking evaluates whether Kansas has satisfied the 
requirements for this type of Federally enforceable limitation on 
potential-to-emit.
    As specified in the Federal Register of June 28, 1989, there are 
five criteria that a state must meet in order to achieve a Federally 
enforceable operating permit program which is approved into the SIP. 
These criteria apply to both the class II program and to the request 
for approval under section 112(l), discussed below. The state of Kansas 
has met this criteria by: (1) Submitting this program for approval; (2) 
imposing a legal obligation that operating permit holders adhere to the 
terms and limitations of their permits (K.A.R. 28-19-501); (3) 
requiring that all emissions limitations, controls, and other 
requirements imposed by permits will be at least as stringent as any 
other applicable limitations and requirements contained in or 
enforceable under the SIP (K.A.R. 28-19-501(b)(1) and (2); (4) further 
requiring the limitations, controls, and requirements of the permits to 
be permanent, quantifiable, and otherwise enforceable as a practical 
matter (K.A.R. 28-19-501(b)(3)); and (5) providing that the permits 
issued are subject to public participation and EPA review (K.A.R. 28-
19-501(e)).
    The June 28, 1989, Federal Register document also states that EPA 
may deem permit restrictions not to be Federally enforceable if the 
criteria are not met. Although the Kansas regulation does not expressly 
provide for this, EPA is including a provision in the rulemaking 
portion of this document clarifying that nonconforming permit 
requirements may be deemed not Federally enforceable.
    The reader may consult the TSD for a fuller description of how the 
state has met these criteria.

C. Section 112(l) Authority

    Kansas has also requested that EPA authorize Federally enforceable 
limitations on potential-to-emit both pollutants regulated under 
section 110 of the Act (``criteria pollutants'') and pollutants 
regulated under section 112 (HAPs). As discussed above, the June 28, 
1989, Federal Register document provided five specific criteria for 
approval of state operating permit programs for the purpose of 
establishing Federally enforceable limits on a source's potential-to-
emit. This 1989 document, because it was written prior to the 1990 
Amendments, addressed only SIP programs to control criteria pollutants. 
Federally enforceable limits on criteria pollutants (especially 
volatile organic compounds (VOC) and 

[[Page 36363]]
particulate matter) may have the incidental effect of limiting certain 
HAPs listed pursuant to section 112(b). This situation would occur when 
a pollutant classified as an HAP is also classified as a criteria 
pollutant (e.g., benzene).1 As a legal matter, no additional 
program approval by EPA is required in order for these criteria 
pollutant limits to be recognized for this purpose.

    \1\ EPA intends to issue guidance addressing the technical 
aspects of how these criteria pollutant limits may be recognized for 
purposes of limiting a source's potential-to-emit of HAPs to below 
section 112 major source levels.
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    EPA has determined that the five approval criteria for approving 
FESOP programs into the SIP, as specified in the June 28, 1989, Federal 
Register document, are also appropriate for evaluating and approving 
the programs under section 112(l). The June 28, 1989, document does not 
address HAPs because it was written prior to the 1990 Amendments to 
section 112, and not because it establishes requirements unique to 
criteria pollutants. Hence, the five criteria discussed above are 
applicable to FESOP approvals under section 112(l) as well as under 
section 110.
    In addition to meeting the criteria in the June 28, 1989, document, 
an FESOP program for HAPs must meet the statutory criteria for approval 
under section 112(l)(5). This section allows EPA to approve a program 
only if it: (1) Contains adequate authority to ensure compliance with 
any section 112 standards or requirements; (2) provides for adequate 
resources; (3) provides for an expeditious schedule for ensuring 
compliance with section 112 requirements; and (4) is otherwise likely 
to satisfy the objectives of the Act.
    EPA plans to codify the approval criteria for programs limiting 
potential-to-emit HAPs in subpart E of part 63, the regulations 
promulgated to implement section 112(l) of the Act. EPA currently 
anticipates that these criteria, as they apply to FESOP programs, will 
mirror those set forth in the June 28, 1989, document, with the 
addition that the state's authority must extend to HAPs instead of, or 
in addition to, VOCs and particulate matter. EPA currently anticipates 
that FESOP programs that are approved pursuant to section 112(l) prior 
to the subpart E revisions will have had to meet these criteria and, 
hence, will not be subject to any further approval action.
    EPA believes it has authority under section 112(l) to approve 
programs to limit potential-to-emit HAPs directly under section 112(l) 
prior to this revision to subpart E. Section 112(l)(5) requires EPA to 
disapprove programs that are inconsistent with guidance required to be 
issued under section 112(l)(2). This might be read to suggest that the 
``guidance'' referred to in section 112(l)(2) was intended to be a 
binding rule. Even under this interpretation, EPA does not believe that 
section 112(l) requires this rulemaking to be comprehensive. That is, 
it need not address all instances of approval under section 112(l). EPA 
has already issued regulations under section 112(l) that would satisfy 
this requirement. Given the severe timing problems posed by impending 
deadlines under section 112 and Title V, EPA believes it is reasonable 
to read section 112(l) to allow for approval of programs to limit 
potential-to-emit prior to issuance of a rule specifically addressing 
this issue.
    Kansas' satisfaction of the criteria published in the Federal 
Register of June 28, 1989, has been discussed above. In addition, 
Kansas' FESOP program meets the statutory criteria for approval under 
section 112(l)(5). EPA believes that Kansas has adequate authority to 
ensure compliance with section 112 requirements since the third 
criteria of the June 28, 1989, document is met (that is, since the 
program does not provide for waiving any section 112 requirement). 
Nonmajor sources would still be required to meet applicable section 112 
requirements.
    Regarding adequate resources, Kansas has included in its request 
for approval under section 112(l) a commitment to provide adequate 
resources to implement and enforce the program, which will be obtained 
from fees collected under Title V. EPA believes that this mechanism 
will be sufficient to provide for adequate resources to implement this 
program, and will monitor the state's implementation of the program to 
ensure that adequate resources continue to be available.
    Kansas' FESOP program also meets the requirement for an expeditious 
schedule for ensuring compliance. A source seeking a voluntary limit on 
potential-to-emit is probably doing so to avoid a Federal requirement 
applicable on a particular date. Nothing in this program would allow a 
source to avoid or delay compliance with the Federal requirement if it 
fails to obtain the appropriate Federally enforceable limit by the 
relevant deadline.
    Finally, Kansas' FESOP program is consistent with the objectives of 
the section 112 program, since its purpose is to enable sources to 
obtain Federally enforceable limits on potential-to-emit to avoid major 
source classification under section 112. EPA believes this purpose is 
consistent with the overall intent of section 112. Accordingly, EPA 
finds that Kansas' program satisfies applicable criteria for 
establishing Federally enforceable limitations on potential to emit 
both criteria and hazardous air pollutants.

III. Rulemaking Action

    EPA finds that the criteria for Kansas to be able to issue FESOPs 
are essentially met, and is today approving its rules pertaining to its 
class II permitting program, as well as approving those rules under the 
authority of section 112(l). EPA is also approving the additional rules 
submitted for approval in the SIP.
    The EPA is publishing this action without prior proposal because 
the Agency views this as a noncontroversial amendment and anticipates 
no adverse comments. However, in a separate document in the Federal 
Register publication, the EPA is proposing to approve the SIP revision 
should adverse or critical comments be filed.
    If the EPA receives such comments, this action will be withdrawn 
before the effective date by publishing a subsequent document that will 
withdraw the final action. All public comments received will then be 
addressed in a subsequent final rule based on this action serving as a 
proposed rule. The EPA will not institute a second comment period on 
this action. Any parties interested in commenting on this action should 
do so at this time.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any SIP. Each request for revision to the SIP shall be 
considered separately in light of specific technical, economic, and 
environmental factors and in relation to relevant statutory and 
regulatory requirements.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities (5 U.S.C. 603 and 604). 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    SIP approvals under section 110 and subchapter I, part D of the CAA 
do not create any new requirements, but simply approve requirements 
that the state is already imposing. Therefore, because the Federal SIP 
approval does not impose any new requirements, EPA certifies that it 
does not have a 

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significant impact on any small entities affected. Moreover, due to the 
nature of the Federal-state relationship under the CAA, preparation of 
a regulatory flexibility analysis would constitute Federal inquiry into 
the economic reasonableness of state action. The CAA forbids EPA to 
base its actions concerning SIPs on such grounds (Union Electric Co. v. 
U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct. 1976); 42 U.S.C. 7410(a)(2)).
    The Office of Management and Budget has exempted these actions from 
review under Executive Order 12866.
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by September 15, 1995. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule for the purposes of judicial review, nor does 
it extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such rule or action. 
This action may not be challenged later in proceedings to enforce its 
requirements. (See section 307(b)(2).)
    Under sections 202, 203, and 205 of the Unfunded Mandates Reform 
Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22, 
1995, EPA must undertake various actions in association with proposed 
or final rules that include a Federal mandate that may result in 
estimated costs of $100 million or more to the private sector, or to 
state, local, or tribal governments in the aggregate.
    Through submission of this SIP, the state and any affected local 
governments have elected to adopt the program provided for under 
section 110 of the Clean Air Act. These rules may bind state and local 
governments to perform certain actions and also require the private 
sector to perform certain duties. To the extent that the rules being 
finalized for approval by this action will impose new requirements, 
sources are already subject to these regulations under state law. 
Accordingly, no additional costs to state or local governments, or to 
the private sector, result from this action. EPA has also determined 
that this final action does not include a mandate that may result in 
estimated costs of $100 million or more to state or local governments 
in the aggregate or to the private sector.
List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Hydrocarbons, Incorporation by reference, Intergovernmental relations, 
Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Dated: June 21, 1995.
Dennis Grams,
Regional Administrator.

    Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

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

Subpart R--Kansas

    2. Section 52.870 is amended by adding paragraph (c)(30) to read as 
follows:


Sec. 52.870   Identification of plan.

* * * * *
    (c) * * *
    (30) On February 17, 1995, the Secretary of the Kansas Department 
of Health and Environment (KDHE) submitted for approval numerous rule 
revisions which add and revise definitions, revise the Kansas 
construction permit program, and create a class II operating permit 
program.
    (i) Incorporation by reference.
    (A) Revised rules K.A.R. 28-19-7 effective November 22, 1993; 
K.A.R. 28-19-8 effective January 23, 1995; K.A.R. 28-19-14 effective 
January 24, 1994; and the revocation of K.A.R. 28-19-14a effective 
January 23, 1995; and the revocation of K.A.R. 28-19-14b effective 
January 24, 1994.
    (B) New rules K.A.R. 28-19-204, 212, 300, 301, 302, 303, 304, 400, 
401, 402, 403, 404, 500, 501, 502, 540, 541, 542, 543, 544, 545, 546, 
561, 562, and 563 effective January 23, 1995.
    3. Section 52.872 is added to read as follows:


Sec. 52.872   Operating permits.

    Emission limitations and related provisions which are established 
in Kansas operating permits as Federally enforceable conditions shall 
be enforceable by EPA. EPA reserves the right to deem permit conditions 
not Federally enforceable. Such a determination will be made according 
to appropriate procedures and be based upon the permit, permit approval 
procedures, or permit requirements which do not conform with the 
operating permit program requirements or the requirements of EPA 
underlying regulations.

[FR Doc. 95-17214 Filed 7-14-95; 8:45 am]
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