[Federal Register Volume 60, Number 151 (Monday, August 7, 1995)]
[Proposed Rules]
[Pages 40140-40145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19402]



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


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5273-9]


Clean Air Act Proposed Interim Approval of the Operating Permits 
Program; Nevada Division of Environmental Protection; Nevada

AGENCY: Environmental Protection Agency (``EPA'').

ACTION: Proposed interim approval.

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

SUMMARY: The EPA proposes interim approval of the operating permits 
program submitted by the Nevada Division of Environmental Protection 
(``NDEP'' or ``State'') for the purpose of complying with federal 
requirements for an approvable state program to issue operating permits 
to all major stationary sources and to certain other sources.

DATES: Comments on this proposed action must be received in writing by 
September 6, 1995.

ADDRESSES: Comments should be addressed to Celia Bloomfield, Mail Code 
A-5-2, U.S. Environmental Protection Agency, Region IX, Air and Toxics 
Division, 75 Hawthorne Street, San Francisco, CA 94105.
    Copies of NDEP's submittal and other supporting information used in 
developing the proposed interim approval are available for inspection 
during normal business hours at the following location: U.S. 
Environmental Protection Agency, Region IX, 75 Hawthorne Street, San 
Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Celia Bloomfield (telephone: 415/744-
1249), Mail Code A-5-2, U.S. Environmental Protection Agency, Region 
IX, Air and Toxics Division, 75 Hawthorne Street, San Francisco, CA 
94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the 1990 Clean Air Act Amendments 
(sections 501-507 of the Clean Air Act (``Act'')), EPA has promulgated 
rules that define the minimum elements of an approvable state operating 
permits program and the corresponding standards and procedures by which 
EPA will approve, oversee, and withdraw approval of state operating 
permits programs (see 57 FR 32250 (July 21, 1992)). These rules are 
codified at 40 CFR part 70 (``part 70''). Title V requires states to 
develop, and submit to EPA, programs for issuing operating permits to 
all major stationary sources and to certain other sources.
    The Act requires that states develop and submit title V programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within one year after receiving the submittal. EPA's 
program review occurs pursuant to section 502 of the Act and the part 
70 regulations, which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, EPA may grant the program interim approval for 
a period of up to two years. If EPA has not fully approved a program by 
two years after the November 15, 1993 date, or by the end of an interim 
program, it must establish and implement a federal program.
    This proposed interim approval applies to the NDEP title V 
operating permits program and sources under NDEP's jurisdiction. NDEP 
has jurisdiction over all sources in the State outside of Washoe 
County, Clark County and tribal lands, as well as all fossil fuel fired 
steam generating power plants inside Washoe and Clark Counties. Washoe 
County District Health Department received interim approval on January 
5, 1995 (60 FR 1741), and interim approval was proposed for Clark 
County Health District on March 14, 1995 (60 FR 13683).

B. Federal Oversight and Sanctions

    If EPA were to finalize this proposed interim approval, it would 
extend for two years following the effective date of final interim 
approval and could not be renewed. During the interim approval period, 
NDEP would be protected from sanctions, and EPA would not be obligated 
to promulgate, administer and enforce a federal permits program in 
Nevada. Permits issued under a program with interim approval have full 
standing with respect to part 70, and the one-year time period for 
submittal of permit applications by subject sources begins upon the 
effective date of interim approval, as does the three-year time period 
for processing the initial permit applications.
    Following final interim approval, if NDEP failed to submit a 
complete corrective program for full approval by the date six months 
before expiration of the interim approval, EPA would start an 18-month 
clock for mandatory sanctions. If NDEP then failed to submit a 
corrective program that EPA found complete before the expiration of 
that 18-month period, EPA would be required to apply one of the 
sanctions in section 179(b) of the Act, which would remain in effect 
until EPA determined that NDEP had corrected the deficiency by 
submitting a complete corrective program. Moreover, if the 
Administrator found a lack of good faith on the part of NDEP, both 
sanctions under section 179(b) would apply after the expiration of the 
18-month period until the Administrator determined that NDEP had come 
into compliance. In any case, if, six months after application of the 
first sanction, NDEP still had not submitted a corrective program that 
EPA found complete, a second sanction would be required.
    If, following final interim approval, EPA were to disapprove NDEP's 
complete corrective program, 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 NDEP had submitted a 
revised program and 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 NDEP, both 
sanctions under section 179(b) would apply after the expiration of the 
18-month period until the Administrator determined that NDEP had come 
into compliance. In all cases, if, six months after EPA applied the 
first sanction, NDEP had not submitted a revised program that EPA had 
determined corrected the deficiencies that prompted disapproval, 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 a state has not 
timely submitted a complete corrective program or EPA has disapproved a 
submitted corrective program. Moreover, if EPA has not granted full 
approval to NDEPs program by the expiration of an interim approval and 
that expiration occurs after November 15, 1995, EPA must promulgate, 
administer and enforce a federal permits program for NDEP upon interim 
approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

    The analysis contained in this notice focuses on specific elements 
of NDEP's title V operating permits program that must be corrected to 
meet the minimum requirements part 70. The full program submittal; the 
Technical Support Document (``TSD''), which contains a detailed 
analysis of the submittal; and 

[[Page 40141]]
other relevant materials are available for inspection as part of the 
public docket (NV-DEP-95-1-OPS). The docket may be viewed during 
regular business hours at the address listed above.
1. Title V Program Support Materials
    NDEP's initial title V program was submitted on November 22, 1993. 
The submittal was found to be complete on January 13, 1994. In a letter 
dated July 20, 1994, NDEP submitted to EPA revised title V implementing 
regulations. The revised regulations constituted a material change to 
the State's title V program, and hence, extended EPA's review period 
pursuant to section 70.4(e)(2). On February 8, 1995, EPA received an 
amended title V submittal from NDEP (``amended submittal'') and a 
letter from the Governor's designee requesting that the amended 
submittal be reviewed and acted on in lieu of the initial November 22, 
1993 submittal. EPA agreed, sent a second program completeness letter 
to NDEP on February 27, 1995, and is taking action on the February 8, 
1995 amended submittal in this notice.
    NDEP's February 8, 1995 submission contains a complete program 
description, enabling legislation, State implementing and supporting 
regulations, and all other program documentation required by section 
70.4. The amended submittal also contains a list of the changes made 
from the November 22, 1993 version, such as a revised fee demonstration 
and the removal of enacted bills that have since been codified into the 
Nevada Revised Statutes (``NRS''). The February 8, 1995 submittal does 
not, however, include an updated Attorney General's opinion; it 
includes the original version signed November 15, 1993. Consequently, 
the citations for several rules and legislation are expressed in a 
precodification format. EPA is therefore relying on elements of the 
initial submittal as supporting documentation for this rulemaking. The 
TSD, located in the docket, specifically identifies when EPA's 
evaluation of the program relies on supporting documentation contained 
in the initial program submittal.
2. Title V Operating Permit Regulations and Program Implementation
    NDEP relied on additions and amendments to its existing air quality 
regulations (NAC 445.430-445.846) to satisfy the requirements of part 
70 and title V. The first ``title V'' revisions to NAC 445.430-846 were 
adopted on November 3, 1993. On March 3, 1994, the Nevada State 
Environmental Commission made additional changes to the title V 
portions of NAC 445.430-846. The February 8, 1995 amended submittal 
contains the March 3, 1994 version of NAC 445.430-445.846; a May 26, 
1994 amendment to NAC 445.7135 (fees); a February 16, 1995 amendment to 
NAC 445B.221 (part 72, acid rain); and a February 16, 1995 amendment to 
NAC 445B.327 (fees).1 In a letter sent to EPA dated July 12, 1995, 
NDEP identified the provisions in NAC 445.430-846 relevant to title V 
implementation and requested that EPA take action only on those 
provisions identified. Therefore, in this proposed interim approval 
notice, EPA is acting on the following provisions of Nevada State law: 
NAC 445.430, 445.432, 445.433, 445.4343, 445.4346, 445.438, 445.4395, 
445.4415, 445.4425, 445.4615, 445.4625, 445.4635, 445.4645, 445.477, 
445.4915, 445.4955, 445.500, 445.5008, 445.504, 445.506, 445.5095, 
445.5105, 445.521, 445.5275, 445.5305, 445.5405, 445.5431, 445.548, 
445.550, 445.559, 445.5695, 445.571, 445.5855, 445.5905, 445.5915, 
445.5925, 445.5935, 445.613, 445.628, 445.630, 445.649, 445.662, 
445.664, 445.696, 445.697, 445.699, 445.704, 445.7042, 445.7044, 
445.705, 445.7052, 445.7054, 445.7056, 445.7058, 445.706, 445.707, 
445.7073, 445.7075, 445.7077, 445.7112, 445.7114, 445.7122, 445.7124, 
445.7126, 445.7128, 445.713, 445.7131, 445.7133, 445.7135, 445.7145, 
445.7155, 445.717, 445.7191, 445.7193, 445.7195, 445B.221, 445B.327. 
Provisions not included in the July 12, 1995 letter from NDEP may still 
be considered supporting documentation for the State's title V 
operating permit program.

    \1\ The citation format varies because NDEP revised its citation 
system after most of the implementing regulations were adopted and 
submitted to EPA. A citation translation key can be found in the 
docket at EPA Region IX.
---------------------------------------------------------------------------

    NDEP's title V implementing regulations substantially meet the 
requirements of 40 CFR part 70, sections 70.2 and 70.3 for 
applicability; sections 70.4, 70.5, and 70.6 for permit content, 
including operational flexibility; section 70.7 for public 
participation and minor permit modifications; section 70.5 for criteria 
that define insignificant activities; section 70.5 for complete 
application forms; and section 70.11 for enforcement authority. 
Although the regulations substantially meet part 70 requirements, there 
are several deficiencies in the program that are outlined under section 
II.B.1. below as interim approval issues and further described in the 
TSD.
a. Applicability
    NDEP stated in its amended submittal that it will take advantage of 
EPA's March 8, 1994 policy regarding fugitive emissions. NDEP will not 
require fugitives to be considered in determining the major source 
status of sources subject to post-1980 New Source Performance Standards 
(``NSPS'') and National Emissions Standards for Hazardous Air 
Pollutants (``NESHAP''). In accordance with that policy, NDEP's title V 
program is eligible only for interim approval. (See March 8, 1994 
memorandum entitled, ``Consideration of Fugitive Emissions in Major 
Source Determinations,'' signed by Lydia Wegman.)
    The program description, submitted as part of NDEP's title V 
program, indicates the State's intention to permit only major sources, 
phase II acid rain sources, and solid waste incinerators subject to 
section 129(e) of the Act (program submittal, Section VI, pp.2-4). The 
program description further states that NDEP's title V program does not 
cover nonmajor sources (``area sources'') subject to a section 111 or 
112 standard or in a category designated by the Administrator. While 
the coverage is not consistent with section 70.3(b)(2), which states 
that section 111 and 112 standards promulgated after July 21, 1992 will 
specify whether a nonmajor source must obtain a title V permit, it is 
acceptable for the following two reasons: 1) EPA is deferring title V 
permit requirements for nonmajor sources subject to recently 
promulgated MACT standards (See May 16, 1995 guidance document 
entitled, ``Title V Permitting for Nonmajor Sources in Recent Section 
112 Maximum Achievable Control Technology (MACT) Standards,'' by John 
Seitz, Director of the Office of Air Quality Planning and Standards); 
and 2) NDEP committed to expeditiously revise its title V program to 
reflect any action by EPA to require title V permitting for nonmajor 
sources (program submittal, section VI, pp.3-4).
    Although NDEP's program description clearly indicates NDEP's intent 
to exclude nonmajor sources from its title V (i.e., Class I) permitting 
requirements, NDEP's regulations require any new source subject to a 
section 111 or section 112 standard or any new source in a category of 
sources designated by the Administrator of EPA to apply for a Class I-B 
permit (NAC 445.7044.3 and .4). In other words, by omitting the word 
``major'' when specifying new source applicability, the regulations 
could be interpreted to require certain nonmajor sources to obtain 
title V permits. EPA views this applicability distinction as an 
inconsistency in the State's program. Prior to final rulemaking, EPA 
requests that NDEP provide a letter to resolve this apparent 
inconsistency and 

[[Page 40142]]
describe under which reading the State desires EPA to act on its 
program.
b. Integrated Permit
    NDEP's program combines the requirements for operating permits and 
construction permits (``integrated program''). All title V sources are 
identified as Class I sources and must obtain Class I operating permits 
that meet the requirements of title V and part 70. Sources subject to 
State requirements only (i.e., not subject to the requirements of title 
V or part 70) are identified as Class II sources and are outside the 
scope of this proposed approval. Existing Class I sources will be 
subject to Class I-A requirements, and new or modified Class I sources 
will be subject to Class I-B requirements.
    The regulations that implement the integrated program are contained 
in the Nevada Administrative Code (``NAC'') sections 445.430-445.846. 
This interim approval addresses only those elements that pertain to 
operating permit program requirements for title V sources as identified 
above. The proposed approval is not being made under EPA's title I 
authority, and hence, is not amending Nevada's new source review 
program.
c. Insignificant Activities
    Section 70.5(c) states that EPA may approve, as part of a state 
program, a list of insignificant activities and emissions levels which 
need not be included in permit applications. Section 70.5(c) also 
states that an application for a part 70 permit may not omit 
information needed to determine the applicability of, or to impose, any 
applicable requirement, or to evaluate appropriate fee amounts. Section 
70.4(b)(2) requires states to include in their part 70 programs any 
criteria used to determine insignificant activities or emission levels 
for the purpose of determining complete applications. Under part 70, a 
State must request and EPA may approve as part of that State's program 
any activity or emission level that the state wishes to consider 
insignificant. Part 70, however, does not establish appropriate 
emission levels for insignificant activities, relying instead on a 
case-by-case determination of appropriate levels based on the 
particular circumstances of the part 70 program under review.
    NDEP's list of insignificant activities is set out in NAC 445.705.3 
and referred to as permit ``exemptions.'' Despite being called 
``exemptions,'' NAC 445.705.3 ensures that potential emissions from 
these activities will be included in all Class I applicability 
determinations. In addition, NAC 445.7054.2(b) requires Class I permit 
applications to describe all points of emissions and all activities 
``in sufficient detail to establish the basis for the applicability of 
standards and fees,'' thus ensuring that the application will not omit 
information needed to determine whether or how a requirement of the Act 
applies at a source. EPA interprets the terms ``all points of 
emissions'' and ``all activities which may generate emissions of [the] 
air pollutants'' in NAC 445.7054.2(b) to include those from NDEP's list 
of insignificant activities at NAC 445.705.3.
    NDEP's insignificant activities are defined by source or activity 
type in combination with a given size or rate. Activities without a 
specified size or rate cut-off qualify as insignificant if they are 
below the major source threshold. This high cut-off, when viewed in 
conjunction with the listed activities like ``agricultural land use'' 
and ``equipment or contrivances used exclusively for the processing of 
food'' would almost certainly result in necessary information being 
left off of the permit application. In order to be fully approvable, 
NDEP must provide additional criteria that will limit insignificant 
activities to activities that are unnecessary for evaluating the 
applicability of requirements at a facility.
    For other State and district programs, EPA has proposed to accept, 
as sufficient criteria for full approval, emission levels defining 
insignificant activities of two tons per year for criteria pollutants 
and the lesser of 1000 pounds per year, section 112(g) de minimis 
levels, or other title I significant modification levels for hazardous 
air pollutants (``HAP'') and other toxics (40 CFR section 
52.21(b)(23)(i)). EPA believes that these levels are sufficiently below 
the applicability thresholds of many applicable requirements to assure 
that no unit potentially subject to an applicable requirement is left 
off a title V application. EPA is requesting comment on the 
appropriateness of these emission levels for determining insignificant 
activities in Nevada. This request for comment is not intended to 
restrict the ability of other States and districts to propose, and EPA 
to approve, different emission levels if the state or district 
demonstrates that such alternative emission levels are insignificant 
compared to the level of emissions from and types of units that are 
permitted or subject to applicable requirements.
d. Variances
    NDEP has authority under State law to issue a variance from State 
requirements. Sections 445.506, 445.511, 445.516, and 445.521 of the 
NRS allow the State to grant relief from enforcement action for permit 
violations. EPA regards these provisions as wholly external to the 
program submitted for approval under part 70, and consequently, is 
proposing to take no action on these provisions of State law.
    The EPA has no authority to approve provisions of State or local 
law, such as the variance provisions referred to, that are inconsistent 
with the Act. The EPA does not recognize the ability of a permitting 
authority to grant relief from the duty to comply with a federally 
enforceable part 70 permit, except where such relief is granted through 
procedures allowed by part 70. A part 70 permit may be issued or 
revised (consistent with part 70 permitting procedures) to incorporate 
those terms of a variance that are consistent with applicable 
requirements. A part 70 permit may also incorporate, via part 70 permit 
issuance or modification procedures, the schedule of compliance set 
forth in a variance. However, EPA reserves the right to pursue 
enforcement of applicable requirements notwithstanding the existence of 
a compliance schedule in a permit to operate. This is consistent with 
40 CFR 70.5(c)(8)(iii)(C), which states that a schedule of compliance 
``shall be supplemental to, and shall not sanction noncompliance with, 
the applicable requirements on which it is based.''
e. Reporting of Permit Deviations
    Part 70 requires prompt reporting of deviations from permit 
requirements, and NDEP has not defined ``prompt'' in its program. 
Section 70.6(a)(3)(iii)(B) requires the permitting authority to define 
prompt in relation to the degree and type of deviations likely to occur 
and the applicable requirements. Although the permit program 
regulations should define prompt for purposes of administrative 
efficiency and clarity, an acceptable alternative is to define prompt 
in each individual permit. The EPA believes that prompt should 
generally be defined as requiring reporting within two to ten days of 
the deviation. Two to ten days is sufficient time in most cases to 
protect public health and safety as well as to provide a forewarning of 
potential problems. For sources with a low level of excess emissions, a 
longer time period may be acceptable. However, prompt reporting must be 
more frequent than the 

[[Page 40143]]
semiannual reporting requirement, given this is a distinct reporting 
obligation under section 70.6(a)(3)(iii)(A). Where ``prompt'' is 
defined in the individual permit but not in the program regulations, 
EPA may veto permits that do not contain sufficiently prompt reporting 
of deviations.
3. Permit Fee Demonstration
    Section 502(b)(3) of the Act requires that each permitting 
authority collect fees sufficient to cover all reasonable direct and 
indirect costs required to develop and administer its title V operating 
permits program. Each title V program submittal must contain either a 
detailed demonstration of fee adequacy or a demonstration that 
aggregate fees collected from title V sources meet or exceed $25 per 
ton per year (adjusted annually based on the Consumer Price Index 
(``CPI''), relative to 1989 CPI). The $25 per ton amount is presumed, 
for program approval, to be sufficient to cover all reasonable program 
costs and is thus referred to as the ``presumptive minimum,'' (40 CFR 
70.9(b)(2)(i)).
    NDEP elected to collect fees below the presumptive minimum and to 
submit a detailed fee demonstration of fee adequacy. Nevada's fee 
regulation, NAC 445B.327, was amended on February 16, 1995 to cap fees 
at the 1995 level, thus charging $3.36 per ton of emissions of 
regulated pollutants. In addition, facilities must pay annual 
maintenance fees per permitted source. Given the amount of fees 
collected from title V sources for fiscal year 1995, NDEP estimated the 
total annual fee revenue from title V sources to be about $599,893 
during the first three years of the program.
    In order to determine whether the title V fees would be adequate to 
cover the direct and indirect costs of the program, NDEP did a detailed 
workload analysis which incorporated all the activities involved in 
title V implementation. Based on this analysis, NDEP determined that 
four additional staff would have to be hired. Incorporating the cost of 
the four staff persons, a phased schedule for permitting sources, and 
other direct and indirect costs, NDEP estimated the total title V 
program costs to be approximately $457,079 each year during the first 
three years of the program.
    NDEP's fee analysis demonstrates that title V fees are expected to 
be sufficient to cover the costs of the title V program. In order to 
ensure continued fee adequacy, NDEP will keep an accounting system that 
details expenditures associated with direct title V activities and 
ensures that the State's air quality management fund has adequate fee 
revenue to cover indirect program costs.
4. Provisions Implementing the Requirements of Other Titles of the Act
a. Authority and Commitments for Section 112 Implementation
    NDEP has demonstrated in its title V program submittal adequate 
legal authority to implement and enforce all section 112 requirements 
through the title V permit. This legal authority is contained in 
Nevada's enabling legislation and in regulatory provisions defining 
federal ``applicable requirements'' and requiring each permit to 
incorporate conditions that assure compliance with all applicable 
requirements. NDEP's submittal also contains a commitment to implement 
and enforce section 112 requirements and to adopt additional 
regulations as needed to issue permits that implement and enforce the 
requirements of section 112. The EPA has determined that the legal 
authority and commitments are sufficient to allow NDEP to issue permits 
that assure compliance with all section 112 requirements. For further 
discussion, please refer to the TSD accompanying this action and the 
April 13, 1993 guidance memorandum entitled, ``Title V Program Approval 
Criteria for Section 112 Activities,'' signed by John Seitz.
b. Authority for Title IV Implementation
    NDEP incorporated by reference part 72, the federal acid rain 
permitting regulations, on February 16, 1995. The incorporation by 
reference was codified in NAC 445B.221 and submitted to EPA on February 
27, 1995 to be added to the State's title V operating permit program.

B. Proposed Interim Approval and Implications

1. Title V Operating Permits Program
    The EPA is proposing to grant interim approval to the operating 
permits program submitted by the Nevada Division of Environmental 
Protection, Bureau of Air Quality on November 22, 1993 and revised by 
the amended submittal made on February 8, 1995. If promulgated, NDEP 
must make the following changes to receive full approval:
    (1) Revise NAC 445.7054.2(h)(2) to clearly require that compliance 
certifications submitted as part of the permit applications include the 
compliance status of all applicable requirements and the methods used 
for determining compliance with all applicable requirements. As NDEP's 
rule is currently written, a compliance certification is part of the 
source's compliance plan, and the elements of the compliance plan are 
required to address all applicable requirements (NAC 445.7054.2(h)). 
However, the compliance certification provision, within the compliance 
plan framework, can be read, inappropriately, to narrow the scope of 
certifications to those applicable requirements that become effective 
during the term of the permit. Nonetheless, because NAC 
445.7054.2(h)(1) requires a narrative description of the source's 
compliance status with respect to all applicable requirements, EPA 
believes part 70's compliance certification requirements will be 
substantially met for the interim approval period. (section 70.5(c)(9))
    (2) Revise the definition of ``regulated air pollutant'' to 
include, in addition to those pollutants listed under NAC 445.5905: 1) 
any pollutant subject to requirements established under section 112 of 
the Act, including sections 112(g), (j), and (r); and 2) any Class I or 
Class II substance subject to a standard established by title VI of the 
Act. (Section 70.2, definition of ``regulated air pollutant'')
    (3) NDEP's rule does not contain a title V permit application 
trigger for existing sources that become subject to the program after 
the program's effective date. NAC 445.7052.1 must be revised to include 
an application requirement for such sources. (section 70.5(a)(1)(i))
    (4) NDEP's permit shield provisions in NAC 445.7114.1(j) are not 
fully consistent with part 70 and must be revised as follows: 1) 
clearly indicate that NAC 445.7114.1(j) provides for permit shields; 2) 
require the permit to expressly state that a permit shield exists or 
the permit is presumed not to provide such a shield (section 
70.6(f)(2)); and 3) add a statement that the permit shield may not be 
extended to minor permit modifications (section 70.7(e)(2)(vi)).
    (5) Add emissions trading provisions consistent with section 
70.6(a)(10), which requires that trading must be allowed where an 
applicable requirement provides for trading increases and decreases 
without a case-by-case approval.
    (6) A schedule of compliance contained in a title V permit must be 
consistent with that required in the permit application (section 
70.6(c)(3)). While NDEP application provisions require all the 
necessary elements of a schedule of compliance, the permit requirements 
in NAC 445.7114.1(h) must be revised either by referencing the 
application requirements in NAC 445.7054.2(h)(3) or by adding that the 
schedule of compliance will contain a 

[[Page 40144]]
schedule of remedial measures, including an enforceable sequence of 
actions with milestones, leading to compliance and that the schedule 
shall resemble and be at least as stringent as that contained in any 
judicial consent decree or administrative order. In addition, the 
schedule of compliance must address requirements that become applicable 
during the term of the permit pursuant to section 70.5(c)(8)(iii)(B).
    (7) The progress report requirement in NAC 445.7114.1(h)(1) is 
vague and must be revised to more clearly meet the requirements of 
section 70.6(c)(4). EPA suggests adding the following language to NAC 
445.7114.1(h)(1): ``Requirements for [s]emiannual progress reports with 
dates for achieving milestones and dates when such milestones were 
achieved.''
    (8) NDEP indicated in its program description that Class I permits 
may be issued to portable sources (program submittal, Section II, p.8). 
In order to satisfy the part 70 requirements for temporary sources, 
NDEP must add a requirement that the owner or operator of a Class I 
``portable source'' (as defined in NAC 445.5695) notify NDEP at least 
10 days in advance of each change in location. (section 70.6(e)(2))
    (9) Revise NAC 445.7114.1(g) to ensure that any trade under a 
federally enforceable emissions cap is preceded by a written 
notification to NDEP at least 7 days in advance of the trade. The 
notification must specify when the change will occur and include a 
description of the change in emissions that will result and how the 
increases and decreases will comply with the terms and conditions of 
the permit. (sections 70.4(b)(12) and 70.4(b)(12)(iii)(A))
    (10) Remove the phrase ``Except as otherwise provided in subsection 
2'' from NAC 445.705.1, as it inaccurately suggests that major sources 
subject to either the New Source Performance Standard for new 
residential wood heaters or the National Emissions Standard for 
Hazardous Air Pollutants for asbestos demolition are not required to 
obtain title V operating permits.
    (11) Provide additional defining criteria that will ensure that 
NDEP's insignificant activities (i.e., activities exempt from part 70 
permitting) are truly insignificant and are not likely to be subject to 
an applicable requirement. Alternatively, NDEP may restrict the 
exemptions to activities that are not likely to be subject to an 
applicable requirement or emit less than State-established emission 
levels. NDEP should demonstrate that these emission levels are 
insignificant compared to the level of emissions from and type of units 
that are required to be permitted or subject to applicable 
requirements.
    This interim approval, which may not be renewed, extends for a 
period of up to two years. During the interim approval period, NDEP is 
protected from sanctions for failure to have a program, and EPA is not 
obligated to promulgate a federal permits program in the State. Permits 
issued under a program with interim approval have full standing with 
respect to part 70, and the one year time period for submittal of 
permit applications by subject sources begins upon interim approval, as 
does the three-year time period for processing the initial permit 
applications.
    The scope of NDEP's part 70 program that EPA proposes to approve in 
this notice would apply to all part 70 sources (as defined in the 
approved program) within NDEP's jurisdiction. The approved program 
would not apply to any part 70 sources over which an Indian tribe has 
jurisdiction. See, e.g., 59 FR 55813, 55815-18 (Nov. 9, 1994). The term 
``Indian tribe'' is defined under the Act as ``any Indian tribe, band, 
nation, or other organized group or community, including any Alaska 
Native village, which is federally recognized as eligible for the 
special programs and services provided by the United States to Indians 
because of their status as Indians.'' See section 302(r) of the CAA; 
see also 59 FR 43956, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 21, 
1993).
2. State Preconstruction Permit Program Implementing Section 112(g)
    The EPA has published an interpretive notice in the Federal 
Register regarding section 112(g) of the Act (60 FR 8333; February 14, 
1995) that postpones the effective date of section 112(g) until after 
EPA has promulgated a rule addressing that provision. The interpretive 
notice also explains that EPA is considering whether the effective date 
of section 112(g) should be delayed beyond the date of promulgation of 
the federal rule so as to allow states time to adopt rules implementing 
the federal rule, and that EPA will provide for any such additional 
delay in the final section 112(g) rulemaking. Unless and until EPA 
provides for such an additional postponement of section 112(g), NDEP 
must be able to implement section 112(g) during the period between 
promulgation of the federal section 112(g) rule and adoption of 
implementing State regulations.
    Implementation of section 112(g) during this transition period 
requires states to have an available mechanism for establishing 
federally enforceable HAP emission limits or other conditions from the 
effective date of the section 112(g) rule until they can adopt rules 
specifically designed to implement section 112(g). NDEP requires any 
source that constructs or modifies to obtain a permit or permit 
revision prior to commencing construction. As noted earlier, NDEP's 
program is an integrated program; that is, the permit that is issued to 
a new or modifying source prior to its construction will contain all 
preconstruction review requirements and all operating requirements. 
Integrated preconstruction/operating permits issued to major sources 
must meet all procedural requirements of part 70, including public and 
EPA review, and are therefore part 70 permits. In Nevada, sources 
subject to section 112(g) (new or modified major sources of hazardous 
air pollutants) will be issued a part 70 permit (i.e., a Class I 
permit) prior to construction. The State has authority to establish a 
MACT requirement for the source pursuant to NAC 445.7191 and 445.7193. 
The source will then have federally enforceable limits on HAP emissions 
in compliance with section 112(g). Once EPA promulgates a final section 
112(g) rule, NDEP will act expeditiously to revise its hazardous air 
pollutant regulations to be consistent with the section 112(g) 
regulations.
3. Program for Delegation of Section 112 Standards as Promulgated
    Requirements for approval, specified in 40 CFR section 70.4(b), 
encompass section 112(l)(5) requirements for approval of a program for 
delegation of section 112 standards as promulgated by EPA as they apply 
to part 70 sources. Section 112(l)(5) requires that the state's program 
contain adequate authorities, adequate resources for implementation, 
and an expeditious compliance schedule, which are also requirements 
under part 70. Therefore, EPA is proposing to grant approval under 
section 112(l)(5) and 40 CFR section 63.91 of NDEP's program for 
receiving delegation of section 112 standards that are unchanged from 
federal standards as promulgated.
    In a letter dated July 12, 1995, NDEP requested that EPA approve, 
in conjunction with the title V approval action, NDEP's program for 
receiving delegation of unchanged section 112 standards as they apply 
to nonmajor sources. Therefore, today's proposed approval under section 
112(l)(5) and 40 CFR section 63.91 of NDEP's program for delegation 
extends to non-part 70 sources as well as part 70 sources. (See July 
12, 1995 letter from Jolaine Johnson, Chief, Bureau of Air Quality, 
NDEP to Debbie Jordan, Chief, 

[[Page 40145]]
Operating Permits Section, EPA Region IX.)
    NDEP has informed EPA that it intends to obtain the regulatory 
authority necessary to accept delegation of section 112 standards 
(existing and future) by incorporating section 112 standards into the 
Nevada Administrative Code by reference to the federal regulations. The 
details of this delegation mechanism will be set forth in an 
Implementation Agreement between NDEP and EPA.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of NDEP'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, 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 September 6, 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 permits programs 
submitted to satisfy the requirements of 40 CFR part 70. Because this 
action does not impose any new requirements, it does not have a 
significant impact on a substantial number of small entities.

D. Unfunded Mandates Act

    Under Section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a federal mandate that may result in estimated 
costs to state, local, or tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under Section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the proposed approval action promulgated 
today does not include a federal mandate that may result in estimated 
costs of $100 million or more to either state, local, or tribal 
governments in the aggregate, or to the private sector. This federal 
action approves pre-existing requirements under state law, and imposes 
no new federal requirements. Accordingly, no additional costs to state, 
local, or tribal governments, or to the private sector, result from 
this action.

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.

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

    Dated: July 28, 1995.
Nora L. McGee,
Acting Regional Administrator.
[FR Doc. 95-19402 Filed 8-4-95; 8:45 am]
BILLING CODE 6560-50-P