[Federal Register Volume 60, Number 167 (Tuesday, August 29, 1995)]
[Proposed Rules]
[Pages 44805-44812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-21415]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[NC-95-01; FRL-5288-2]


Clean Air Act Proposed Interim Approval of Operating Permit 
Program; North Carolina, Western North Carolina Mecklenburg County, 
Forsyth County

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: EPA proposes interim approval of the operating permit programs 
submitted by the State of North Carolina Department of Health, 
Environment and Natural Resources (DEHNR), Western North Carolina 
Regional Air Pollution Control Agency (WNCRAPCA), Forsyth County 
Department of Environmental Affairs (FCDEA), and Mecklenburg County 
Department of Environmental Protection (MCDEP) 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, and to certain other sources.

DATES: Comments on this proposed action must be received in writing by 
September 28, 1995.

ADDRESSES: Written comments on this action should be addressed to Carla 
E. Pierce, Chief, Air Toxics Unit/Title V Team, Air Programs Branch, at 
the EPA Region 4 office listed below. Copies of the DEHNR, WNCRAPCA, 
FCDEA, and MCDEP submittals 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 4, 345 Courtland Street, NE, 
Atlanta, GA 30365.

FOR FURTHER INFORMATION CONTACT: Scott Miller, Title V Program 
Development Team, Air Programs Branch, Air Pesticides & Toxics 
Management Division, U.S. Environmental Protection Agency, Region 4, 
345 Courtland Street, NE, Atlanta, GA 30365, (404) 347-3555, Ext. 4153.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the Clean Air Act (``the Act'') as 
amended by the 1990 Clean Air Act Amendments, EPA promulgated rules on 
July 21, 1992 (57 FR 32250), that define the minimum elements of an 
approvable state operating permit program and the corresponding 
standards and procedures by which EPA will approve, oversee, and 
withdraw approval of state operating permit programs. These rules are 
codified at 40 Code of Federal Regulations (CFR) part 70. Title V and 
part 70 require that states develop, and submit to EPA, programs for 
issuing operating permits to all major stationary sources and to 
certain other sources.
    The Act requires states to develop and submit these programs to EPA 
by November 15, 1993, and EPA to approve or disapprove each program 
within one year after receiving the submittal. If the State's 
submission is materially changed during the one-year review period, 40 
CFR Part 70.4(e)(2) allows EPA to extend the review period for no more 
than one year following receipt of the additional materials. EPA 
received the DEHNR, WNCRAPCA, FCDEA, and MCDEP's title V operating 
permit program submittals on November 12, 1993. The State provided EPA 
with additional materials in supplemental submittals dated December 17, 
1993, February 28, 1994, May 31, 1994, and August 9, 1995. Because 
these supplements materially changed the State's title V program 
submittal, EPA has extended the review period and will work 
expeditiously to promulgate a final decision on the State's program.
    EPA reviews state operating permit programs pursuant to section 502 
of the Act and 40 CFR part 70, 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 granted full 
or interim approval to a whole program by November 15, 1995, it must 
establish and implement a Federal operating permit program for that 
state.

B. Federal Oversight and Sanctions

    If EPA grants interim approval to the DEHNR, WNCRAPCA, FCDEA, and 
MCDEP programs, the interim approval would extend for two years 
following the effective date of final interim approval, and could not 
be renewed. During the interim approval period, the State of North 
Carolina, WNCRAPCA, FCDEA, and MCDEP would not be subject to sanctions, 
and EPA would not be obligated to promulgate, administer, and enforce a 
Federal permit program for the State. Permits issued under a program 
with interim approval are fully effective with respect to part 70, and 
the 12-month time period for submittal of permit applications by 
sources subject to part 70 requirements begins upon the effective date 
of final interim approval, as does the three-year time period for 
processing the initial permit applications.
    Following the granting of final interim approval, if the DEHNR, 
WNCRAPCA, FCDEA, or MCDEP failed to submit complete corrective programs 
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 the DEHNR, WNCRAPCA, FCDEA, or MCDEP 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 DEHNR, WNCRAPCA, FCDEA, or MCDEP had 
corrected the deficiency by submitting a complete corrective program. 
Moreover, if the Administrator found a lack of good faith on the part 
of DEHNR, WNCRAPCA, FCDEA, or MCDEP, both sanctions under section 
179(b) would apply after the expiration of the 18-month period and 
would extend until the Administrator determined that these programs had 
come into compliance. In any case, if, six months after application of 
the first sanction, DEHNR, WNCRAPCA, FCDEA, or MCDEP still had not 
submitted a corrective program that EPA found complete, the second 
sanction would be applied.
    If, following final interim approval, EPA were to disapprove any of 
the North Carolina State or local program complete corrective programs, 
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 the DEHNR, WNCRAPCA, FCDEA, or MCDEP 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 the North 
Carolina State or local agencies, both sanctions under section 179(b) 
would apply after the expiration of the 18-month period until the 
Administrator determined that the North Carolina State or local 
agencies had come into compliance. In all cases, if six months after 
EPA applied the first sanction, the North Carolina State or local 
agencies had not submitted a revised program that EPA had determined 
corrected the deficiencies that prompted disapproval, a second sanction 
would be required. 

[[Page 44806]]

    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 a state program by the expiration of an interim approval 
and that expiration occurs after November 15, 1995, EPA must 
promulgate, administer, and enforce a Federal operating permit program 
for that state upon interim approval expiration.
II. Proposed Action and Implications

A. Analysis of State Submission

    EPA believes that the operating permit programs submitted by the 
DEHNR, WNCRAPCA, FCDEA, and MCDEP substantially meet the requirements 
of title V and part 70, and EPA proposes to grant interim approval to 
these programs. For detailed information on the analysis of the State 
and local agency submission, please refer to the Technical Support 
Document (TSD) contained in the docket at the address noted above.
1. Support Materials
    On November 12, 1993, EPA received the title V operating permit 
programs submitted by the DEHNR, WNCRAPCA, FCDEA, and MCDEP. The DEHNR 
requested, under the signature of the State of North Carolina 
Governor's designee, approval of its operating permit program with full 
authority to administer the program in all areas of the State of North 
Carolina, with the exceptions of Indian reservations and tribal lands. 
The State and local agencies submitted supplements to their title V 
operating permits programs submittals dated December 17, February 28, 
1994, May 31, 1994, and July 27, 1995.
    The DEHNR, WNCRAPCA, FCDEA, and MCDEP submittals address, in 
Section II entitled ``Complete Program Description,'' the requirement 
of 40 CFR Part 70.4(b)(1) by describing how the State and local 
agencies intend to carry out their responsibilities under the part 70 
regulations. EPA believes the program descriptions are sufficient for 
meeting the requirement of 40 CFR Part 70.4(b)(1).
    Pursuant to 40 CFR Part 70.4(b)(3), each state is required to 
submit a legal opinion from the Attorney General (or the attorney for 
the state air pollution control agency that has independent legal 
counsel) demonstrating adequate authority to carry out all aspects of 
the title V operating permit program. The DEHNR submitted a General 
Counsel Opinion and a Supplementary General Counsel Opinion 
demonstrating adequate legal authority as required by Federal law and 
regulation. WNCRAPCA, FCDEA, and MCDEP each submitted a General Counsel 
Opinion. EPA believes that these opinions adequately address the 
thirteen provisions listed at 40 CFR 70.4(b)(3)(i)-(xiii).
    Section 70.4(b)(4) requires the submission of relevant permitting 
program documentation not contained in the regulations, such as permit 
application forms, permit forms, and relevant guidance to assist in the 
State's implementation of its permit program. Section IV of the DEHNR, 
WNCRAPCA, and FCDEA submittals and Appendix C of the MCDEP submittal 
include permit application forms. EPA has determined that the 
application forms meet the requirements of 40 CFR Part 70.5(c).
2. Regulations and Program Implementation
    The State of North Carolina developed 15A North Carolina 
Administrative Code (NCAC) Subchapter 2Q.0500 entitled ``Title V 
Procedures'' for the implementation of the substantive requirements of 
40 CFR part 70. The State also made changes to 15A NCAC 2Q.0200 and 15A 
NCAC 2Q.0100 to implement other part 70 requirements. These rules, and 
several other rules and statutes providing for State permitting and 
administrative actions, were submitted by North Carolina with 
sufficient evidence of procedurally correct adoption as required by 40 
CFR Part 70.4(b)(2). The FCDEA adopted the State regulations verbatim 
in the Forsyth County Air Quality Technical Code (FCAQTC) Subchapter 3Q 
Sections .0500, .0100, and .0200. The WNCRAPCA adopted the State 
regulations verbatim in WNCRAPCA Rules and Regulations (WNCRAPCARR) 
Chapter 17 Sections .0500, .0100, and .0200. The MCDEP adopted the 
State regulations verbatim in Mecklenburg County Air Pollution Control 
Ordinance (MCAPCO) Article 1 Sections .5500, .5231, .5211. The local 
programs contain regulations that differ from the State program 
concerning the collection of title V fees. Since the local agency 
programs adopted the State regulations verbatim with the exception of 
fee collection, this proposed rulemaking will discuss the State 
regulations and how they meet the requirements of part 70 and follow 
with regulatory citations for the local agency regulations which 
implement the equivalent State regulation. Fee regulations will be 
discussed separately for each local agency.
    The DEHNR program, in Regulation 15A NCAC 2Q.0502 (MCAPCO 
Regulation 1.5502, FCAQTC Regulation 3Q.0502, and WNCRAPCARR Regulation 
17.0502), substantially meets the requirements of 40 CFR Part 70.2 and 
70.3 regarding applicability. However, Regulation 15A NCAC 2Q.0502(c) 
(MCAPCO Regulation 1.5502(c), FCAQTC Regulation 3Q.0502(c), and 
WNCRAPCARR Regulation 17.0502(c)) allows Research and Development (R&D) 
facilities to be treated as separate facilities from other stationary 
facilities that are part of the same industrial grouping, are located 
on contiguous or adjacent property, and are under common control. Such 
an approach is inconsistent with the definition of major source found 
in 40 CFR Part 70.2, which requires all sources located on contiguous 
or adjacent properties, under common control, and belonging to a single 
major industrial grouping to be considered as the same facility. 
However, EPA notes that relatively few sources will be excluded from 
the scope of the State's title V program as a result of this approach. 
Moreover, the State has committed to undertake a rulemaking designed to 
assure that R&D facilities that are collocated with manufacturing 
facilities and which are under common control and belonging to a single 
major industrial grouping will be considered as the same facility for 
determining title V applicability to the source. Finalization of this 
rulemaking is a prerequisite to obtaining full program approval.
    The DEHNR, WNCRAPCA, FCDEA, and MCDEP definition of ``title I 
modification'' does not include changes reviewed under a minor source 
preconstruction review program (``minor NSR changes''). The EPA is 
currently in the process of determining the proper definition of that 
phrase. As further explained below, 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 state preconstruction review programs 
approved by EPA as part of the State Implementation Plan under section 
110(a)(2)(C) of the Clean Air Act.
    On August 29, 1994, EPA proposed revisions to the interim approval 
criteria in 40 CFR 70.4(d) to, among other things, allow state programs 
with a more 

[[Page 44807]]
narrow definition of ``title I modifications'' to receive interim 
approval (59 FR 44572). The Agency explained its view that the better 
reading of ``title I modifications'' includes minor NSR and pre-1990 
NESHAP requirements, and solicited public comment on the proper 
interpretation of that term (59 FR 44573). The Agency stated that if, 
after considering the public comments, it continued to believe that the 
phrase ``title I modifications'' should be interpreted as including 
minor NSR changes, it would revise the interim approval criteria as 
needed to allow states with a narrower definition to be eligible for 
interim approval.
    The EPA hopes to finalize its rulemaking revising the interim 
approval criteria under 40 CFR 70.4(d) expeditiously.1 If EPA 
establishes in its rulemaking that the definition of ``title I 
modifications'' can be interpreted to exclude changes reviewed under 
minor NSR programs, the definition of ``title I modification'' would be 
fully consistent with part 70. Conversely, if EPA establishes through 
the rulemaking that the definition must include changes reviewed under 
minor NSR, the DEHNR, WNCRAPCA, FCDEA, and MCDEP definition of ``title 
I modifications'' will become a basis for interim approval. If the 
definition becomes a basis for interim approval as a result of EPA's 
rulemaking, the DEHNR, WNCRAPCA, FCDEA, and MCDEP would be required to 
revise their definition to conform to the requirements of part 70.

    \1\Publication of the proposed interim approval criteria 
revisions was delayed until August 29, 1994, and EPA received 
several requests to extend the public comment period until November 
27, 1994. Given the importance of the issues in that rulemaking to 
states, sources and the public, but mindful of the need to take 
action quickly, EPA agreed to extend the comment period until 
October 28, 1994 (see 59 FR 52122 (October 14, 1994)).
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    Accordingly, today's proposed approval does not identify the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP definition of ``title I modification'' as 
necessary grounds for either interim approval or disapproval. Again, 
although EPA has reasons for believing that the better interpretation 
of ``title I modifications'' is the broader one, EPA does not believe 
that it is appropriate to determine whether this is a program 
deficiency until EPA completes its rulemaking on this issue.
    The DEHNR program, in Regulation 15A NCAC 2Q.0507 and associated 
permit application forms (MCAPCO Regulation 1.5507, FCAQTC Regulation 
3Q.0507, and WNCRAPCARR Regulation 17.0507), substantially meets the 
requirements of 40 CFR Part 70.5 for complete permit application forms. 
However, Regulation 15A NCAC 2Q.0507 (MCAPCO Regulation 1.5507, FCAQTC 
Regulation 3Q.0507, and WNCRAPCARR Regulation 17.0507) does not require 
an applicant to include all fugitive emissions regardless of whether 
such emissions will be used to determine title V applicability. 
Pursuant to 40 CFR Part 70.3(d), an applicant must include all fugitive 
emissions regardless of whether such emissions will be used to 
determine title V applicability. The State has committed to undertake a 
rulemaking designed to assure that this requirement in 40 CFR Part 
70.3(d) is included in the State's regulations. Finalization of this 
rulemaking is a prerequisite to obtaining full program approval.
    Section 70.4(b)(2) requires state and local agencies to include in 
their part 70 programs any criteria used to determine insignificant 
activities or emission levels for the purposes of determining complete 
applications. Section 70.5(c) 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 70.5(c) also states that EPA may 
approve, as part of a state or local program, a list of insignificant 
activities and emissions levels which need not be included in permit 
applications. Under part 70, a state or local agency must request and 
EPA must approve as part of that 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 part 70 program under review.
    For other state programs, EPA has proposed to accept, as sufficient 
for full approval, potential per emission unit levels for insignificant 
activities of 5 tons per year for criteria pollutants and the lesser of 
1000 pounds per year or section 112(g) de minimis levels for hazardous 
air pollutants (HAP). Provided the State or local program does not 
allow applications to omit information needed to determine the 
applicability of, or to impose any applicable requirement, or to 
evaluate the fee amount required under the program's approved fee 
schedule, EPA believes that these levels are sufficiently below 
applicability thresholds for many applicable requirements to assure 
that no unit potentially subject to an applicable requirement is left 
off a title V application and are consistent with current permitting 
thresholds in the State of North Carolina.
    The State and local agency title V programs include three different 
approaches to establishing insignificant activities and emissions 
levels. Regulation 15A NCAC 2Q.0102(b)(1) (MCAPCO Regulation 
1.5211(e)(1), FCAQTC Regulation 3Q.0102(b)(1), and WNCRAPCARR 
Regulation 17.0102(b)(1)) establishes exemptions according to source 
category and activity. These activities are not required to be included 
in permit applications or permits issued by the State or local 
agencies. Regulation 15A NCAC 2Q.0102(b)(2) (MCAPCO Regulation 
1.5211(e)(2), FCAQTC Regulation 3Q.0102(b)(2), and WNCRAPCARR 
Regulation 17.0102(b)(2)) establishes exemptions on the basis of size 
or production rate. These activities are required to be included in the 
permit application but are not required to be included in a facility's 
permit. Some of these activities are exempted at levels of up to 40 tpy 
for criteria pollutants. These levels are a substantial fraction of the 
major source threshold and would almost certainly exclude units with 
applicable requirements. EPA, therefore, finds that these emission 
levels are too high to be considered insignificant. EPA proposes that, 
in order to obtain full approval, the State must revise this regulation 
to revise these threshold levels downward from potential emissions of 
40 tpy for these activities to potential per emission unit levels for 
insignificant activities of 5 tons per year for criteria pollutants and 
the lesser of 1000 pounds per year or section 112(g) de minimis levels 
for HAP or such other level as the State or local agencies can 
demonstrate will not be likely to interfere with determining and 
imposing an applicable requirement. Regulation 15A NCAC 
2Q.0102(b)(2)(F) (MCAPCO Regulation 1.5211(e)(2)(F), FCAQTC Regulation 
3Q.0102(b)(2)(F) and WNCRAPCARR Regulation 17.0102(b)(2)(F)) allows an 
applicant to demonstrate to the satisfaction of the respective air 
program Director that an activity would be negligible in air quality 
impacts, not require an air pollution control device, and not violate 
any applicable emission control standard when operating at maximum 
design capacity or maximum operating rate, whichever is greater. If an 
applicant could demonstrate that an activity qualified under the above 
criteria or conditions, the activity would then be considered as an 
insignificant activity. In order to obtain full program approval, the 
DEHNR, WNCRAPCA, FCDEA, and MCDEP must revise their 

[[Page 44808]]
regulations to provide that any insignificant activity granted under 
15A NCAC 2Q.0102(b)(2)(F) or other respective local agency regulations 
would be limited to potential per emission unit levels for 
insignificant activities of 5 tons per year for criteria pollutants and 
the lesser of 1000 pounds per year or section 112(g) de minimis levels 
for HAP.
    EPA is requesting comment on the appropriateness of these emission 
levels for determining insignificant activities in the State of North 
Carolina. This request for comment is not intended to restrict the 
ability of the North Carolina State and local agencies to propose and 
EPA to approve other emission levels if the State and local agencies 
demonstrate 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.
    The DEHNR program, in Regulations 15A NCAC 2Q.0508 through 2Q.0513 
and 2Q.0523 (MCAPCO Regulations 1.5508 through 1.5513 and 1.5523, 
FCAQTC Regulation 3Q.0508 through 3Q.0513 and 3Q.0523, and WNCRAPCARR 
Regulation 17.0508 through 17.0513 and 17.0523), substantially meets 
the requirements of 40 CFR Parts 70.4, 70.5, and 70.6 for permit 
content (including operational flexibility). The DEHNR, WNCRAPCA, 
FCDEA, and MCDEP programs do provide for limited use of off-permit 
changes as described in 40 CFR 70.4(b)(14). However, the State and 
local agency programs limit the use of off-permit to changes which are 
not governed by applicable requirements and changes which are 
insignificant activities that remain as insignificant activities after 
the change.
    Part 70 requires prompt reporting of deviations from the permit 
requirements. Section 70.6(a)(3)(iii)(B) requires the permitting 
authority to define ``prompt'' in relation to the degree and type of 
deviation 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. 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 semiannual reporting 
requirement, given this is a distinct reporting obligation under 40 CFR 
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.
    Regulation 15A NCAC 2Q.0508(f)(3) (MCAPCO Regulation 1.5508(f)(3), 
FCAQTC Regulation 3Q.0508(f)(3), and WNCRAPCARR Regulation 
17.0508(f)(3)) defines ``prompt'' in the DEHNR program with respect to 
the reporting of deviations. The regulations require a permittee to 
report by the next business day deviations from permit requirements or 
any excess emissions and to follow up this report within two business 
days with a written report to the respective air pollution control 
agency.
    The DEHNR, WNCRAPCA, FCDEA, and MCDEP have the authority to issue 
variances from requirements imposed by State law. North Carolina 
General Statutes (G.S.) 143-215.3E allows the DEHNR, WNCRAPCA, FCDEA, 
and MCDEP discretion to grant relief from compliance with State 
statutes and rules. EPA regards this provision as wholly external to 
the program submitted for approval under part 70, and consequently 
proposes to take no action on this provision of State law. EPA has no 
authority to approve provisions of state law, such as the variance 
provision referred to, that are inconsistent with title V or other 
applicable requirements of the Act and would render permits and the 
applicable requirements they implement unenforceable. 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 consistent with the applicable requirements of the 
Act and is granted through the 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.''
    Regulation 15A NCAC 2Q.0513 through 2Q.0516 and 2Q.0521 (MCAPCO 
Regulation 1.5513 through 1.5516 and 1.5521, FCAQTC Regulation 3Q.0513 
through 3Q.0516 and 3Q.0521, and WNCRAPCARR Regulation 17.0513 through 
17.5516 and 17.5521), substantially meets the permit processing 
requirements of 40 CFR 70.7 (including minor permit modifications) and 
70.8. However, Regulation 15A NCAC 2Q.0514(a)(4) (MCAPCO Regulation 
1.5514(a)(4), FCAQTC Regulation 3Q.0514(a)(4), and WNCRAPCARR 
Regulation 17.0514(a)(4)) allows administrative permit amendments to be 
used to change test dates or construction dates. While EPA believes 
that this is an acceptable way to utilize administrative permit 
amendments, EPA is concerned that this provision could be used to alter 
other requirements of the Act. The State has proposed changes to this 
regulation that if adopted will clarify that such changes can be 
accommodated under an administrative amendment such that no applicable 
requirements are violated. Regulation 15A NCAC 2Q.0514(a)(5) (MCAPCO 
Regulation 1.5514(a)(5), FCAQTC Regulation 3Q.0514(a)(5), and 
WNCRAPCARR Regulation 17.0514(a)(5)) allows administrative permit 
amendments to move terms and conditions from the State-enforceable only 
portion of the permit to the State-and-Federal enforceable portion of 
the permit. EPA does not believe that all such changes would qualify to 
be treated as administrative permit amendments. The State has proposed 
changes to this regulation that if adopted will clarify that 15A NCAC 
2Q.0514(a)(5) will only be used for those requirements which have 
become Federally enforceable through section 110, 111, or 112 or other 
parts of the Clean Air Act. Regulation 15A NCAC 2Q.0515(f) (MCAPCO 
Regulation 1.5515(f), FCAQTC Regulation 3Q.0515(f), and WNCRAPCARR 
Regulation 17.0515(f)) grants a permit shield for minor permit 
modifications once a minor permit modification has been approved by the 
State and EPA. Section 70.7(e)(2)(vi) expressly prohibits a permit 
shield for minor permit modifications. The State has proposed changes 
to this regulation that if adopted will clarify that a permit shield 
may not be granted for minor permit modifications. Regulation 15A NCAC 
2Q.0515(d) does not make provisions for the event a single minor permit 
modification would exceed the thresholds listed in Regulation 15A 

[[Page 44809]]
NCAC 2Q.0515(c). In this instance, 40 CFR 70.7 requires that a minor 
permit modification be processed within 90 days after receiving an 
application or 15 days after the end of EPA's 45-day review period, 
whichever is later. The State has proposed changes to this regulation 
that if adopted will clarify in the event a single minor permit 
modification is submitted that exceeds the thresholds listed in 
Regulation 15A NCAC 2Q.0515(c) the minor permit modification will be 
processed within 90 days after receiving the minor permit modification 
or 15 days after the end of the EPA's 45-day review period, whichever 
is later. Regulation 15A NCAC 2Q.0517(b) (MCAPCO Regulation 1.5517(b), 
FCAQTC Regulation 3Q.0517(b), and WNCRAPCARR Regulation 17.0517(b)) 
stipulates that any permit reopening will be completed within 18 months 
after submittal of a complete application is required or within 18 
months after the applicable requirement is promulgated if no 
application is required. Section 70.7(f) requires that a title V permit 
be reopened and the newly applicable requirement added within 18 months 
after the applicable requirement is promulgated regardless of whether a 
permit application is required to be submitted. The State has proposed 
changes to this regulation that if adopted will clarify that a title V 
permit be reopened and the new applicable requirement added within 18 
months after the applicable requirement is promulgated. Regulation 15A 
NCAC 2Q.0517(b)(2) (MCAPCO Regulation 1.5517(b)(2), FCAQTC Regulation 
3Q.0517(b)(2), and WNCRAPCARR Regulation 17.0517(b)(2)) requires that 
no reopening of a permit is required if the effective date of a new 
applicable requirement is after the expiration of the permit term. 
Section 70.7(f)(1)(i) stipulates that no reopening of a permit term is 
required if the effective date of a newly applicable requirement is 
after the expiration of the permit term unless the permit term was 
extended based on the fact that the State had not renewed the permit 
prior to the expiration of the permit. The State has proposed changes 
to this regulation that if adopted will clarify that no reopening of a 
permit term is required if the effective date of a newly applicable 
requirement is after the expiration of the permit term unless the 
permit term was extended based on the fact that the State had not 
renewed the permit prior to the expiration of the permit. Regulation 
15A NCAC 2Q.0518(f) (MCAPCO Regulation 1.5517(f), FCAQTC Regulation 
3Q.0517(f), and WNCRAPCARR Regulation 17.0517(f)) provides that final 
permit action will be taken within 18 months of a submittal of a 
completed application, subject to adjudication, for a significant 
permit modification or issuance of a title V permit. Section 70.7(a)(2) 
requires that a state must issue a final permit within 18 months after 
a complete application is received. Since this requirement is not 
subject to adjudication, the State has proposed changes to this 
regulation that if adopted will remove the phrase ``subject to 
adjudication'' from this regulation. Finalization of these proposed 
changes is required as a condition to full approval of the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP programs.
    The public participation requirements of 40 CFR 70.7(h) were 
addressed in Regulation 15A NCAC 2Q.0521 (MCAPCO Regulation 1.5521, 
FCAQTC Regulation 3Q.0521, and WNCRAPCARR Regulation 17.0521). The 
North Carolina State and local agency programs also substantially meet 
the requirements of 40 CFR 70.11 regarding enforcement authority.
    The aforementioned TSD contains the detailed analysis of the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP programs and describes the manner in which 
these program substantially meet all of the operating permit program 
requirements of 40 CFR part 70.
3. Permit Fee Demonstration
    Section 502(b)(3) of the Act requires each permitting authority to 
collect fees sufficient to cover all reasonable direct and indirect 
costs necessary for the development and administration of its title V 
operating permit 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 of emissions per year (adjusted from 1989 by the Consumer Price 
Index (CPI)). The $25 per ton + CPI is presumed, for program approval, 
to be sufficient to cover all reasonable program costs and is thus 
referred to as the ``presumptive minimum.''
    The State of North Carolina, Forsyth County, and Mecklenburg County 
have elected to assess a title V operating permit fee that is 
equivalent to the Federal presumptive minimum fee amount. These 
agencies do so by collecting an annual recurring flat fee in addition 
to collecting a fee per ton of actual emissions. When the annual 
recurring fee is added to the corresponding fee per ton of actual 
emissions, the result is that each agency is collecting the presumptive 
fee. Each agency's fee amounts differ based on program costs, number of 
air pollution-emitting facilities, and the amount of each regulated 
pollutant emitted that would produce the needed revenue for funding the 
title V permit program operations. The DEHNR assesses a $14.63 per ton 
fee plus an annual recurring flat fee of $5,100 for existing sources, 
$10,900 for a new title V source, $7,200 for every significant 
modification, $700 for every minor modification, and a $21,200 fee for 
every new title V source which is also a Prevention of Significant 
Deterioration (PSD) facility. The MCDEP assesses a per ton fee of $25 
per ton plus the CPI. In addition, the County charges application fees 
for modifications, initial permit issuance, and a surcharge for complex 
processes which require greater staff time to evaluate. The FCDEA 
assesses a $24 per ton fee plus an annual recurring flat fee of $4000. 
Each of the three agencies submitted a fee demonstration which showed 
that the fees collected will adequately cover the anticipated costs of 
the operating permit program for the years 1995 through 1999.
    The WNCRAPCA opted to charge less than the presumptive minimum fee. 
The Agency's program submittal, therefore, included a detailed fee 
demonstration in accordance with 40 CFR 70.9(b)(5). The fee 
demonstration showed that the Agency was in fact collecting fees 
adequate to support the title V permitting program. The Agency is 
charging $21.29 per ton as well as an annual recurring flat fee of 
$5000 per facility.
4. Provisions Implementing the Requirements of Other Titles of the Act
a. Authority for Section 112 Implementation
    In its program submittal, the DEHNR, WNCRAPCA, FCDEA, and MCDEP 
agencies demonstrated adequate legal authority to implement and enforce 
all section 112 requirements through a title V permit. This legal 
authority is contained in the North Carolina General Statutes and in 
the North Carolina Administrative Code in regulatory provisions 
defining ``applicable requirements'' and provisions stating that 
permits must address all applicable requirements. EPA has determined 
that this legal authority is sufficient to allow the State to issue 
permits that assure compliance with all section 112 requirements.
    EPA is interpreting the above legal authority to mean that the 
DEHNR, WNCRAPCA, FCDEA, and MCDEP agencies are able to carry out all 
section 112 activities with respect to part 70 

[[Page 44810]]
and non-part 70 sources. For further rationale on this interpretation, 
please refer to the TSD.
b. Implementation of 112(g) Upon Program Approval
    EPA issued an interpretive notice on February 14, 1995 (60 FR 
8333), which outlines EPA's revised interpretation of 112(g) 
applicability. The notice postpones the effective date of 112(g) until 
after EPA has promulgated a rule addressing that provision. The notice 
sets forth in detail the rationale for the revised interpretation.
    The section 112(g) interpretative notice 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), the North Carolina State and 
local agencies must have a Federally enforceable mechanism for 
implementing section 112(g) during the period between promulgation of 
the Federal section 112(g) rule and adoption of implementing State 
regulations.
    EPA is aware that the DEHNR, WNCRAPCA, FCDEA, and MCDEP lack a 
program designed specifically to implement section 112(g). However, the 
DEHNR, WNCRAPCA, FCDEA, and MCDEP do have preconstruction review 
programs that can serve as adequate implementation vehicles during the 
transition period because it would allow the State and local programs 
to select control measures that would meet maximum achievable control 
technology (MACT), as defined in section 112, and incorporate these 
measures into a Federally enforceable preconstruction permit.
    For this reason, EPA proposes to approve the use of the State of 
North Carolina's preconstruction review program found in Regulation 15A 
NCAC 2Q.0300 through 15A NCAC 2Q.0311 (MCAPCO Regulation 1.5210 through 
1.5221, FCAQTC Regulation 3Q.0300 through 3Q.0311, and WNCRAPCARR 
Regulation 17.0300 through 17.0311), under the authority of title V and 
part 70, solely for the purpose of implementing section 112(g) to the 
extent necessary during the transition period between EPA's section 
112(g) regulation promulgation and adoption of a State rule 
implementing EPA's section 112(g) regulations. Although section 112(l) 
generally provides authority for approval of state air programs to 
implement section 112(g), title V and section 112(g) provide for this 
limited approval because of the direct linkage between the 
implementation of section 112(g) and title V. The scope of this 
approval is narrowly limited to section 112(g) and does not confer or 
imply approval for purpose of any other provision under the Act (e.g., 
section 110). This approval will be without effect if EPA decides in 
the final section 112(g) rule that sources are not subject to the 
requirements of the rule until State and local regulations are adopted. 
The duration of this approval is limited to 18 months following 
promulgation by EPA of the section 112(g) rule to provide adequate time 
for the State and local agencies to adopt regulations consistent with 
the Federal requirements.
c. Program for Delegation of Section 112 Standards as Promulgated
    The requirements for part 70 program approval, specified in 40 CFR 
70.4(b), encompass section 112(l)(5) requirements for approval of a 
state program for delegation of section 112 standards promulgated by 
EPA as they apply to title V sources. Section 112(l)(5) requires that 
the DEHNR, WNCRAPCA, FCDEA, and MCDEP programs contain adequate 
authorities, adequate resources for implementation, and an expeditious 
compliance schedule, which are also requirements under part 70. 
Therefore, EPA also proposes to grant approval, under section 112(l)(5) 
and 40 CFR 63.91, of the DEHNR, WNCRAPCA, FCDEA, and MCDEP programs for 
receiving delegation of future section 112 standards and infrastructure 
programs that are unchanged from the Federal standards as promulgated. 
In addition, EPA proposes delegation of all existing standards and 
infrastructure programs under 40 CFR parts 61 and 63 for part 70 
sources and non-part 70 sources.2

    \2\The radionuclide National Emission Standards for Hazardous 
Air Pollutant (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 radionuclide 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. EPA will work with the State in the development of its 
radionuclide program to ensure that permits are issued in a timely 
manner.
---------------------------------------------------------------------------

    The DEHNR, WNCRAPCA, FCDEA, and MCDEP agencies have informed EPA 
that they intend to accept the delegation of future section 112 
standards on an automatic basis. The details of this delegation 
mechanism are set forth in an addendum to the North Carolina State and 
local agencies' title V program submittals.
d. Commitment to Implement Title IV of the Act
    The DEHNR, WNCRAPCA, FCDEA, and MCDEP committed to take action, 
following promulgation by EPA of regulations implementing sections 407 
and 410 of the Act, or revisions to either part 72 or the regulations 
implementing sections 407 or 410, to either incorporate the revised 
provisions by reference or submit State and local regulations 
implementing these provisions. In a subsequent review, it was found 
that several additions were needed to the acid rain regulations for the 
State and local agency rules to be adequate. In a letter dated August 
7, 1995, the State committed to ensure that an acid rain rule which is 
acceptable to EPA will be state-effective by April 1, 1996. The 
WNCRAPCA, FCDEA, and MCDEP have agreed to update their regulations upon 
the State's finalization of an acceptable acid rain regulation.

B. Proposed Actions

    EPA proposes interim approval of the operating permit programs 
submitted by the DEHNR, WNCRAPCA, FCDEA, and MCDEP on November 12, 
1993, and as supplemented on December 17, 1993, February 28, 1994, May 
31, 1994, and July 27, 1995. If promulgated, the DEHNR, WNCRAPCA, 
FCDEA, and MCDEP must make the following changes to receive full 
approval:
1. Definition of ``Major Source''
    To obtain full approval, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must 
complete a rulemaking removing Regulation 15A NCAC 2Q.0502(c) (MCAPCO 
Regulation 1.5502(c), FCAQTC Regulation 3Q.0502(c), and WNCRAPCARR 
Regulation 17.0502(c)) to assure that R&D facilities which are 
collocated with manufacturing facilities and which are under common 
control and belonging to a single major industrial grouping will be 
considered as the same facility for determining title V major source 
applicability for a facility.
2. Inclusion of Fugitive Emissions in Permit Applications
    To obtain full approval, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must 
amend their regulations such that an applicant must include all 
fugitive emissions regardless of whether such emissions will be used to 
determine title V applicability.

[[Page 44811]]

3. Insignificant Activities
    To obtain full approval, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must 
revise Regulation 15A NCAC 2Q.0102(b)(2)(B) to adjust the insignificant 
emission threshold levels downward from potential emissions of 40 tpy 
to potential per emission unit levels for insignificant activities of 5 
tons per year for criteria pollutants and the lesser of 1000 pounds per 
year or section 112(g) de minimis levels for HAP. The DEHNR, WNCRAPCA, 
FCDEA, and MCDEP must also revise Regulation 15A NCAC 2Q.0102(b)(2)(F) 
to provide that the list granted under 15A NCAC 2Q.0102(b)(2)(F) must 
be subject to the above-mentioned potential emission caps.
4. Administrative Permit Amendment Applicability
    To obtain full approval, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must 
change Regulation 15A NCAC 2Q.0514(a)(4) to clarify that administrative 
permit amendments may be used to change test dates or construction 
dates only as long as no applicable requirements would be violated by 
doing so. Also, the DEHNR, WNCRAPCA, FCDEA, and MCDEP agencies must 
change the language of Regulation 15A NCAC 2Q.0514(a)(4) to clarify an 
administrative permit amendment may used to move terms and conditions 
from the State-enforceable side of the permit to the State and Federal 
enforceable portion of the permit provided that the term being moved is 
a requirement which has become Federally enforceable through sections 
110, 111, or 112 or other parts of the Clean Air Act.
5. Minor Permit Modifications
    To obtain full approval, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must 
change Regulation 15A NCAC 2Q.0515(f) to stipulate that a permit shield 
may not be granted for any minor permit modification. In addition, to 
obtain full approval, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must change 
Regulation 15A NCAC 2Q.0515(d) to specify that in the event an 
applicant submits a single minor permit modification which exceeds the 
thresholds listed in 15A NCAC 2Q.0515(c), the minor permit modification 
must be processed within 90 days after receiving the application or 15 
days after the end of EPA's 45 day review period, whichever is later.
6. Permit Reopenings To Incorporate Newly Applicable Requirements
    To obtain full approval, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must 
amend Regulation 15A NCAC 2Q.0517(b) to provide that a title V permit 
shall be reopened and reissued within 18 months after a newly 
applicable requirement is promulgated. Also, to obtain full approval, 
the DEHNR, WNCRAPCA, FCDEA, and MCDEP must amend Regulation 15A NCAC 
2Q.0517(b)(2) to clarify that no reopening of a permit is required only 
if the effective date of a newly applicable requirement is after the 
expiration of the permit, unless the term of the permit was extended 
based on the fact that the DEHNR, WNCRAPCA, FCDEA, and MCDEP had not 
renewed the permit prior to its expiration.
7. Final Action on Permit Issuance
    To obtain full approval, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must 
amend Regulation 15A NCAC 2Q.0518(f) to remove the phrase ``subject to 
adjudication.''
    This interim approval, which may not be renewed, extends for a 
period of up to two years. During the interim approval period, the 
DEHNR, WNCRAPCA, FCDEA, and MCDEP are protected from sanctions for 
failure to have a program, and EPA is not obligated to promulgate a 
Federal operating permit 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 the DEHNR, WNCRAPCA, FCDEA, and MCDEP part 70 programs 
that EPA proposes to interimly approve in this notice would apply to 
all part 70 sources (as defined in the approved program) within the 
State, except any sources of air pollution 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).
    As discussed above in section II.A.4.c., EPA also proposes to grant 
approval under section 112(l)(5) and 40 CFR 63.91 to the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP for receiving delegation of future section 
112 standards and infrastructure programs that are unchanged from 
Federal standards as promulgated. In addition, EPA proposes to delegate 
existing standards and infrastructure programs under 40 CFR parts 61 
and 63 for both part 70 sources and non-part 70 sources.

III. Administrative Requirements

A. Request for Public Comments

    EPA requests comments on all aspects of this proposed interim 
approval. Copies of the DEHNR, WNCRAPCA, FCDEA, and MCDEP submittals 
and other information relied upon for the proposed interim approval are 
contained in docket number NC-95-01 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. EPA will 
consider any comments received by September 28, 1995.

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    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.

D. Unfunded Mandates Reform Act of 1995

    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 

[[Page 44812]]
governments that may be significantly or uniquely impacted by the rule.
    EPA has determined that the proposed interim approval action 
promulgated today does not include a Federal 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. This Federal 
action approves pre-existing requirements under State or local 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

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

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

    Dated: August 18, 1995.
Patrick M. Tobin,
Acting Regional Administrator.
[FR Doc. 95-21415 Filed 8-28-95; 8:45 am]
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