[Federal Register Volume 60, Number 150 (Friday, August 4, 1995)]
[Proposed Rules]
[Pages 39907-39910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19000]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IA-17-1-6983; FRL-5273-2]


Approval and Promulgation of Implementation Plans and Delegation 
of 112(l) Authority; State of Iowa

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes to approve the State Implementation Plan 
(SIP) revision submitted by the state of Iowa for the purpose of 
establishing a voluntary operating permit program. This program 
provides sources an alternative to the Clean Air Act (CAA) Title V 
program.
    This action also proposes to establish a mechanism for creating 
Federally enforceable limitations under section 112(l). This authorizes 
Iowa to issue Federally enforceable operating permits that address both 
criteria pollutants (regulated under section 110 of the CAA) and 
hazardous air pollutants (HAP) (regulated under section 112).

DATES: Comments on this proposed rule must be received in writing by 
September 5, 1995.

ADDRESSES: Comments may be mailed to Christopher D. Hess, Environmental 
Protection Agency, Air Branch, 726 Minnesota Avenue, Kansas City, 
Kansas 66101.

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

SUPPLEMENTARY INFORMATION: On December 8, 1994, the Director of the 
Iowa Department of Natural Resources (IDNR) submitted a request to 
revise the Iowa State Implementation Plan (SIP). The EPA sent a letter 
of completeness to the state on December 22, 1994.

I. Purpose of the Revision

    The state has created new regulations in Iowa Administrative Code 
567-22.200-208 to create a voluntary operating permit program. This 
program has been specifically designed to provide an alternative to 
Title V operating permits for eligible sources throughout the state.
    In accordance with 40 CFR part 70, air pollution sources defined as 
``major'' or otherwise subject to the part 70 regulations are required 
to obtain and adhere to the conditions of a Title V permit. These Title 
V permits contain numerous requirements as well as a fee on all 
emissions up to 4,000 tons per year (TPY).
    In Federal terminology, sources with potential and actual emissions 
under the thresholds of major (e.g., less than 100 tons per year of a 
regulated air pollutant) are considered minor sources. Sources which 
limit and restrict their potential and actual emissions to levels below 
the major level are referred to as ``synthetic minors,'' because these 
sources would not be minor sources without accepting certain 
limitations to thus be eligible as minor sources.
    This voluntary operating permit program proposed by the state of 
Iowa is designed to enable sources to become minor and thus avoid the 
administrative requirements and associated fees of a Title V permit.
    The term ``voluntary'' is used to describe this program because 
sources which do not want to limit their operations may continue to 
operate at or above ``major'' levels. However, this will require a 
Title V permit. For those sources which voluntarily restrict their 
operations, this program provides an alternative that is 
administratively and financially beneficial to sources, and promotes 
maintenance of air quality standards by reducing emissions of air 
pollution throughout the state.

II. Criteria for Approval

    The terms and conditions of the state's voluntary operating permit 
program may be considered Federally enforceable if the state's 
submittal meets the criteria outlined in the Federal Register notice 
dated June 28, 1989 (54 FR 27275). The state's request for approval 
pursuant to section 112(l) must 

[[Page 39908]]
also fulfill these criteria. The cited notice describes five criteria.
    A. The program is submitted to and approved by EPA into the SIP.
    The state correctly submitted this revision to the EPA and 
subsequently received a letter of completeness. Also, the EPA is 
proposing approval of this revision into the SIP.
    B. The SIP imposes a legal obligation that operating permit holders 
adhere to the terms and limitations of such permits, including 
revisions, and provide that permits that do not conform to the 
operating permit program requirements and the requirements of EPA's 
underlying regulations will be deemed not Federally enforceable.
    The state's rules do require terms and conditions to operate; 
emission limitations and standards that ensure compliance; a certified 
statement that each emissions unit is in compliance; and monitoring, 
recordkeeping, and reporting requirements that ensure compliance with 
the terms and conditions of the permit.
    Moreover, pursuant to section 22.206, each permit must contain a 
statement that the permittee shall comply with all conditions of the 
permit, and that failure to comply with the permit is grounds for 
enforcement action. This action may include termination or revocation 
and immediate requirement to obtain a Title V permit.
    The director shall specifically designate as not Federally 
enforceable any terms and conditions of the permit that are not 
required under the Act or under any of its applicable requirements.
    C. The permit program requires that all emissions limitations, 
controls, and other requirements will be at least as stringent as any 
other applicable limitations and requirements contained in the SIP or 
enforceable under the SIP. Furthermore, the permit program may not 
issue permits that waive, or make less stringent, any limitations or 
requirements contained in or issued pursuant to the SIP, or that are 
otherwise Federally enforceable.
    The state rules specifically provide in section 22.206(2)(c) that 
all emissions limitations, all controls, and all other requirements 
included in a voluntary permit shall be at least as stringent as any 
other applicable limitation or requirement in the SIP or enforceable 
under the SIP. Furthermore, the state rules provide in section 
22.206(2)(d) that the director shall not issue a permit that waives any 
limitation or requirement under the SIP or that is otherwise Federally 
enforceable.
    D. The limitations, controls, and requirements in the permits are 
permanent, quantifiable, and otherwise enforceable as practical matter. 
The state rules provide that the limitations, controls, and 
requirements in a voluntary operating permit shall be permanent, 
quantifiable, and otherwise enforceable. While the rule does not 
presently conform to the Federal requirements as set forth in section 
V, the state has indicated that it will amend this provision.
    E. The permits are issued subject to public participation which 
includes the timely notice of proposal and issuance of these permits. 
This also includes providing to EPA a copy of each draft and final 
permit intended to be Federally enforceable. This process must also 
provide for an opportunity for comment on the permit applications prior 
to issuance of the final permit.
    In rule 22.205(1)b, the state outlines adequate procedures for 
public participation. These procedures set forth requirements for 
public notice, including notifying both the public and the 
Administrator before issuing or renewing a permit. The state will use 
newspapers with a general circulation, as well as a state publication 
to provide this notice. The rule requires at least 30 days will be 
provided for public comment.
    In a letter to the EPA dated February 16, 1995, the state has 
further clarified that it commits to provide EPA with timely notice of 
proposed and final permits within 60 days of an action by the IDNR.

III. Delegation of 112(l) Authority

    In a letter to the EPA dated April 25, 1995, the state of Iowa has 
also requested approval of the voluntary operating permit program under 
section 112(l) of the Act. This enables any limitation on potential-to-
emit of HAP to be enforceable by EPA. In other words, by incorporating 
the voluntary operating permit program into the SIP and approving the 
112(l) program while requiring that permittees comply with such 
permits, any violation of such a permit will be enforceable under the 
Act and will be subject to EPA enforcement.
    The criteria for establishing Federally enforceable limitations for 
criteria pollutants pursuant to section 110 of the Act, are the same 
criteria the EPA uses in approving state operating permit programs to 
establish Federally enforceable limitations for HAPs pursuant to 
section 112 of the Act. As outlined in section II of this notice, the 
state has satisfied the criteria contained in the June 1989 Federal 
Register notice for creating Federally enforceable limitations on 
potential to emit.
    Moreover, the state must also meet the requirements of section 
112(l). In a letter dated March 1, 1995, from Larry Wilson, Director, 
IDNR, to Dennis Grams, Administrator, EPA Region VII, these 
requirements have been addressed and met as described in the following 
paragraphs.
    A. Adequate Authority. Section 112(l)(5)(A) of the Act requires 
adequate authority within the program to ensure compliance with each 
applicable standard, regulation, or requirement established by the 
Administrator by all sources in the state. The state's letter of March 
1, 1995, cites the state's authority that fulfills this requirement.
    B. Adequate Resources. Section 112(l)(5)(B) further requires that 
adequate resources must be available to implement the program. The 
state submitted a resource demonstration on November 15, 1993, for the 
Title V program that also addressed the voluntary permit program. EPA 
has determined that the state, in that submittal, has demonstrated that 
adequate resources are available to implement the voluntary permit 
program. It should be noted, however, that this determination is for 
the voluntary permit program only. It does not affect EPA's proposed 
interim approval of the Title V program, or the EPA's finding as to the 
adequacy of the resources available for implementation of that program.
    C. Implementation Schedule. Section 112(l)(5)(C) requires that the 
state submit an expeditious schedule for implementing the program and 
ensuring compliance by the affected sources. The state submitted a 
schedule for implementing section 112 requirements on November 15, 
1993, that satisfies this requirement.
    D. Ability to Take Enforcement Action. The state's Title V 
submittal of November 15, 1993, includes an opinion by the Iowa 
Attorney General that the state has the legal authority to take civil 
and enforcement action against any source regulated under section 112 
of the Act.
    Based on the fulfillment of the above criteria, the EPA is 
therefore proposing approval of the voluntary operating permit program 
for the control of air toxics that allow sources to limit their 
potential-to-emit of HAPs.

IV. Additional Program Description

    In section II of this notice, the state's rules were only discussed 
insofar as they generally met the criteria outlined in the cited 
Federal Register notice. In this section, various provisions of the 

[[Page 39909]]
rules are discussed in order to provide a fuller description of the 
state's regulations that comprise the voluntary operating permit 
program.
    A. Eligibility. In order to qualify for a voluntary permit, a 
source must successfully demonstrate that:
    1. Potential and actual emissions will be less than 100 tons per 
year of regulated pollutants per 12-month rolling period;
    2. Potential and actual emissions of each HAP will be less than 10 
tons per 12-month rolling period;
    3. Potential and actual emissions of all HAPs will be less than 25 
tons per 12-month rolling period.
    In other matters concerning eligibility, subrule 22.201(2) lists 
exceptions for sources seeking a voluntary operating permit. Although a 
source may meet the criteria cited in a-c above, any affected source 
subject to Title IV, those required to obtain a Title V permit as a 
source category pursuant to 70.3, or a solid waste incinerator unit is 
not eligible for a voluntary permit.
    Additionally, sources subject to a New Source Performance Standard, 
National Emissions Standards for Hazardous Air Pollutants, or section 
112 of the Act are only eligible for a voluntary permit until April 20, 
1999. Once the deferment period for these sources has expired, these 
sources will be required to obtain a Title V permit.
    B. No source may operate without a properly issued Title V or 
voluntary operating permit.
    C. Although the rules state that sources must apply by March 1, 
1995, the state provided public notice and exercised a subsequent 
rulemaking to rescind this date. The state now intends to establish a 
new date once this SIP revision approving the voluntary permit program 
becomes effective.
    D. Standard application information is required of all sources 
seeking a voluntary permit. The rule specifies that the information 
must be sufficient to evaluate the source and its predicted and actual 
emissions.
    The permit must also contain identifying information about the 
owner and a description of source processes and products by two digit 
Standard Industrial Classification Code. Required information includes 
listing equipment, monitoring devices, limitations on source 
operations, and the calculations used by the source in providing this 
information.
    E. Sources with a voluntary operating permit shall be exempt from 
Title V operating permit fees.
    F. A voluntary operating permit may be denied if the director 
determines any of the following conditions: a source is not in 
compliance with any applicable requirement; an applicant submits false 
information; or an applicant is unable to certify compliance with 
applicable requirements.
    If a voluntary permit is denied, the source shall apply for a Title 
V operating permit and shall be subject to enforcement action for 
operating without a Title V permit. This fulfills part 70 requirements 
which require all major sources subject to Title V to receive a 
corresponding permit. If an otherwise major source in Iowa does not 
have a valid voluntary permit, it is subject to Title V.
    G. If a source's application for and receipt of a construction 
permit renders the source ineligible for a voluntary permit (e.g., 
increased emissions above the eligibility threshold), the source must 
then apply for a Title V permit. Once again, the source is subject to 
enforcement action for operating without a Title V permit.
    The terms and conditions of an issued construction permit shall be 
incorporated into a voluntary permit at the time of renewal for the 
voluntary permit, assuming that the construction permit did not render 
the source ineligible as discussed in the paragraph above. Sources are 
required to provide copies of all construction permits issued during 
the term of the voluntary operating permit.
V. Approvability Issues

    EPA's analysis of the state's rules has revealed four deficiencies 
which must be corrected before EPA can give final approval to this SIP 
revision. The state has agreed to these amendments and has developed 
revised rules that are expected to be adopted by June 1995. These 
amendments are as follows.
    A. The EPA has previously informed the state of the need to revise 
the definition of ``12-month rolling period'' in 22.201(1). As 
currently written, the term in this rule is ambiguous and may not be 
enforceable as a practical matter. The state has therefore drafted a 
revised rule that provides the following definition: ``* * * a period 
of 12 consecutive months determined on a rolling basis with a new 12-
month period beginning on the first day of each calendar month.''
    B. The second item concerns 22.201(1)a-d. As currently written, the 
rule is not consistent with the requirements for Prevention of 
Significant Deterioration or for construction permitting. In response 
to EPA comments, the state has developed an amendment that declares 
fugitive emissions of each regulated air pollutant from a stationary 
source shall not be considered in determining the potential-to-emit 
unless the source belongs to a source category listed in IAC 567-22. 
Fugitives must be counted for purposes of 112(l).
    C. The EPA has requested that 22.201(2)a be revised to read that 
sources required to obtain a Title V permit under 22.101(1)e (source 
categories) are not eligible for a voluntary operating permit. This 
revision is necessary because the EPA is requiring some non-major 
section 112 sources to obtain a Title V permit with no deferral 
provisions.
    D. The EPA has advised the state that the provisions of 
22.206(2)(c) must be revised to provide that permit limitations, 
controls, and requirements must be enforceable as a practical matter.

VI. EPA Action

    The EPA is soliciting public comments on this notice and on issues 
relevant to EPA's proposed action. Comments will be considered before 
taking final action. Interested parties may participate in the Federal 
rulemaking procedure by submitting written comments to the address 
above.
    The reader may also request the Technical Support Document (TSD) 
which examines this revision in more extensive detail. The TSD may be 
requested in accordance with the information provided in the 
``Addresses'' section.
    As addressed in section II of this notice, the EPA has determined 
that this proposed revision meets the five criteria of the June 28, 
1989, Federal Register notice for Federal enforceability.
    In order for the EPA to take final action on this SIP revision, the 
state must submit revised rules addressing the approvability issues 
outlined in section V of this notice.
    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 

[[Page 39910]]
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 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)).

Unfunded Mandates

    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 or plan revision, the state and any 
affected local or tribal governments have elected to adopt the program 
provided for under sections 110 and 112 of the CAA. These rules may 
bind state, local, and tribal governments to perform certain actions 
and also require the private sector to perform certain duties. To the 
extent that the rules being proposed for approval by this action will 
impose no new requirements, such sources are already subject to these 
regulations under state law. Accordingly, no additional costs to state, 
local, or tribal governments, or to the private sector, result from 
this action. EPA has also determined that this proposed action does not 
include a mandate that may result in estimated costs of $100 million or 
more to state, local, or tribal governments in the aggregate or to the 
private sector.
    The Office of Management and Budget has exempted these actions from 
review under Executive Order 12866.

List of Subjects in 40 CFR Part 52

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

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

    Dated: June 29, 1995.
Dennis Grams,
Regional Administrator.
[FR Doc. 95-19000 Filed 8-3-95; 8:45 am]
BILLING CODE 6560-50-P