[Federal Register Volume 60, Number 171 (Tuesday, September 5, 1995)]
[Proposed Rules]
[Pages 46071-46076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-21938]



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[[Page 46072]]



ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[KY-95-01-FRL-5290-4]


Clean Air Act Proposed Interim Approval of Operating Permits 
Program; Kentucky Natural Resources and Environmental Protection 
Cabinet

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes source category-limited interim approval of 
the operating permits program submitted by the Kentucky Natural 
Resources and Environmental Protection Cabinet (NREPC) 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 
October 5, 1995.

ADDRESSES: Written comments on this action should be addressed to Carla 
E. Pierce, Chief, Air Toxics Unit/Title V Program Development Team, Air 
Programs Branch, at the EPA Region 4 office listed below. Copies of 
Kentucky'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:

Environmental Protection Agency, Region 4 Air Programs Branch, 345 
Courtland Street, NE, Atlanta, Georgia 30365.
Division for Air Quality, Department for Environmental Protection, 
Natural Resources and Environmental Protection Cabinet, 803 Schenkel 
Lane, Frankfort, Kentucky 40601.

FOR FURTHER INFORMATION CONTACT: Yolanda Adams, 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, Georgia 30365, (404) 347-3555, Ext. 
4149.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the Clean Air Act Amendments (sections 
501-507 of the Clean Air Act (``the Act'')), EPA has promulgated rules 
which define the minimum elements of an approvable state operating 
permits program and the corresponding standards and procedures by which 
the EPA will approve, oversee, and withdraw approval of state operating 
permits programs (see 57 FR 32250 (July 21, 1992)). These rules are 
codified at 40 Code of Federal Regulations (CFR) part 70. Title V 
requires states to develop, and submit to EPA, programs for issuing 
these operating permits to all major stationary sources and to certain 
other sources.
    The Act requires that states develop and submit these programs to 
EPA by November 15, 1993, and that EPA act 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 70.4(e)(2) allows EPA to extend the review period for no 
more than one year following receipt of the additional material. EPA 
received Kentucky's title V operating permit program submittal on 
January 18, 1994. The Commonwealth provided EPA with additional 
material in supplemental submittals dated November 15, 1994, April 14, 
1995, May 3, 1995, and May 22, 1995. Because these supplements 
materially changed the Commonwealth's title V program submittal, EPA 
has extended the review period and will work expeditiously to 
promulgate a final decision on Kentucky's program.
    The 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. Where a state requests source 
category-limited interim approval and demonstrates compelling reasons 
in support thereof, the EPA may also grant such an interim approval. If 
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.

B. Federal Oversight and Sanctions

    If EPA were to finalize this proposed source category-limited 
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, the Commonwealth of Kentucky would be 
protected from sanctions, and EPA would not be obligated to promulgate, 
administer and enforce a Federal permits program for the Commonwealth 
of Kentucky. Permits issued under a program with interim approval have 
full standing with respect to part 70, and the 1-year time period for 
submittal of permit applications by subject sources begins upon the 
effective date of interim approval, as does the 3-year time period for 
processing the initial permit applications.
    Following final interim approval, if the Commonwealth of Kentucky 
failed to submit a complete corrective program for full approval by the 
date 6 months before expiration of the interim approval, EPA would 
start an 18-month clock for mandatory sanctions. If the Commonwealth of 
Kentucky 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 the Commonwealth 
of Kentucky had corrected the deficiency by submitting a complete 
corrective program. Moreover, if the Administrator found a lack of good 
faith on the part of the Commonwealth of Kentucky, both sanctions under 
section 179(b) would apply after the expiration of the 18-month period 
until the Administrator determined that the Commonwealth of Kentucky 
had come into compliance. In any case, if, six months after application 
of the first sanction, Kentucky 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 
Kentucky'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 Kentucky 
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 
Commonwealth of Kentucky, both sanctions under section 179(b) would 
apply after the expiration of the 18-month period until the 
Administrator determined that the Commonwealth of Kentucky had come 
into compliance. In all cases, if, six months after EPA applied the 
first sanction, Kentucky 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 Kentucky has 
not timely submitted a complete corrective program or EPA has 
disapproved a submitted corrective program. Moreover, if EPA has not 
granted full 

[[Page 46073]]
approval to Kentucky'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 the 
Commonwealth of Kentucky upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

    The Commonwealth of Kentucky has requested source category-limited 
interim approval of its part 70 operating permits program. EPA has 
concluded that the operating permit program submitted by Kentucky 
substantially meets the requirements of title V and part 70, and 
proposes to grant source category-limited interim approval to the 
program. For detailed information on the analysis of Kentucky's 
submission, please refer to the Technical Support Document (TSD) 
contained in the docket at the address noted above.
1. Support Materials
    Pursuant to section 502(d) of the Clean Air Act as amended (1990 
Amendments), the Governor of each state must develop and submit to the 
Administrator an operating permits program under state or local law or 
under an interstate compact meeting the requirements of title V of the 
Act. Kentucky submitted, under the signature of Governor Brereton C. 
Jones, the operating permits program, prepared by the NREPC, to be 
implemented in all areas of the Commonwealth of Kentucky, except 
Jefferson County. Kentucky has requested that the EPA approve its 
operating permit program as a source category-limited interim program 
for a period of two years.
    The Kentucky Federal Operating Permits program description, Section 
II of the submittal, addresses 40 CFR 70.4(b)(1) by describing how the 
NREPC intends to carry out its responsibilities under the part 70 
regulations. This program description has been deemed to be appropriate 
for meeting the requirement of 40 CFR 70.4(b)(1).
    Pursuant to 40 CFR 70.4(b)(3), the Governor is required to submit a 
legal opinion from the attorney general (or the attorney for the state 
air pollution control agency that has independent legal counsel) 
demonstrating adequate authority to carry out all aspects of a title V 
operating permits program. The Commissioner of the Department of Law, 
who qualifies as independent legal counsel for the Kentucky Natural 
Resources and Environmental Protection Cabinet, submitted such an 
opinion in Section IV of the submittal, demonstrating adequate legal 
authority as required by Federal law and regulation for interim 
approval.
    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 
implementation of the permit program. Section V of the NREPC submittal 
includes the permit application form with instructions, and Section 4 
of the Title V Addendum includes a model permit. It has been determined 
that the application forms and model permit substantially meet the 
requirements of 40 CFR 70.5(c).
2. Regulations and Program Implementation
    The Commonwealth of Kentucky has submitted Rule 401 KAR 50:034, 
``Permit Application Form'', Rule 401 KAR 50:035, ``Permits,'' and Rule 
401 KAR 50:038, ``Air Emissions Fee,'' for implementing the Kentucky 
part 70 program as required by 40 CFR 70.4(b)(2). Sufficient evidence 
of their procedurally correct adoption is included in Sections 1 and 4 
of Kentucky's Title V Plan Addendum. Copies of all applicable 
Commonwealth statutes and regulations which authorize the part 70 
program, including those governing Commonwealth administrative 
procedures, were submitted with Kentucky's program.
    The Kentucky program, in Rule 401 KAR 50:035 Section 2, 
substantially meets the requirements of 40 CFR 70.2 and 70.3 with 
regard to applicability. However, Kentucky's definitions of ``emissions 
unit'', and ``stationary source'' do not include emissions of any 
pollutant listed under section 112(b) of the Act. Therefore, Kentucky's 
program does not require emissions of all hazardous air pollutants 
(HAP) listed pursuant to section 112(b) to be counted for major source 
applicability. The pollutants listed in section 112(b) are not 
considered regulated air pollutants until addressed by an applicable 
requirement, such as a maximum achievable control technology (MACT) 
standard; therefore, this omission in Kentucky's definitions prevents 
issuance of permits to sources that emit section 112(b) pollutants 
which are not yet covered by an applicable requirement. In addition, 
Kentucky's definition of ``regulated air pollutant'' found in 401 KAR 
50:035, Section 1(28)(a)4., omits the phrase in the part 70 definition 
of regulated air pollutant ``* * * or other requirements established 
under Section 112 of the Act,* * *''; therefore, Kentucky's program 
does not require permits for all major sources. Since these omissions 
in Kentucky's definitions could cause certain part 70 major sources to 
be exempted from the permit process, Kentucky's program is eligible for 
receiving source category-limited interim approval (SCL).
    Section 503(c) of the Act requires that permitting authorities, 
including those implementing an interim program, establish a schedule 
for issuing the permits subject to the program such that ``at least 
one-third of such permits will be acted on by such authority annually 
over a period not to exceed 3 years after such effective date.'' By 
rulemaking, the EPA spelled out an option by which it can make SCL 
interim approval. Thus, although the State is required to issue permits 
within 3 years to all sources subject to the interim approval, some 
sources will not be subject to the requirement to obtain a permit until 
full approval is granted. Because those part 70 sources not addressed 
until the full approval are also subject to the 3-year phase-in 
required by section 503(c), completion of the initial permitting of all 
part 70 sources might not be completed until as late as 5 years after 
the granting of interim approval.
    Kentucky submitted a request dated May 22, 1995, for the EPA to 
grant SCL interim approval of its part 70 operating permit program. The 
EPA policy memo from John Seitz, Director of the Office of Air Quality 
Planning and Standards dated August 2, 1993, entitled ``Interim Title V 
Program Approvals'' establishes the criteria for granting interim 
approvals. EPA can grant SCL interim approval to states whose programs 
do not provide for permitting all required sources if the state makes a 
showing that two criteria were met: (1) That there were ``compelling 
reasons'' for the exclusions and (2) that all required sources will be 
permitted on a schedule that ``substantially meets'' the requirements 
of part 70.
    EPA considers the omissions in Kentucky's definitions of 
``emissions unit'', ``stationary source'', and ``regulated air 
pollutant'', as compelling reasons for granting SCL interim approval. 
Kentucky's SCL interim approval request included a revised transition 
schedule that demonstrates the Commonwealth will permit at least 60% of 
its sources and at least 80% of its emissions during the first three 
years. The revised transition plan demonstrates that all part 70 
sources will be permitted on a schedule that substantially meets the 
requirements of part 70.
    The EPA is therefore proposing to grant Kentucky SCL interim 
approval. 

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SCL interim approval will allow Kentucky to implement the revised 
transition schedule to permit all part 70 sources during the transition 
period after the permit regulations have been revised. Revision of the 
aforementioned definitions is a condition of full program approval.
    Kentucky's program meets the following requirements set out in 
EPA's part 70 operating permits program review. These requirements are 
addressed in Kentucky's Rule 401 KAR 50:035 as follows: (A) Permit 
applications (40 CFR 70.5), Section 3; (B) Provisions for permit 
content (40 CFR 70.6), Section 4; (C) Operational flexibility 
provisions (40 CFR 70.4(b)(12)), Sections 4 and 6; (D) Provisions for 
permit renewals, reopenings, and public participation (40 CFR 70.7), 
Sections 5, 6, and 7; (E) Permit review by EPA and affected states (40 
CFR 70.8), Sections 8 and 9. The Kentucky Revised Statutes, Chapter 
224, satisfy the requirements of 40 CFR 70.11 for enforcement 
authority. The Kentucky program substantially meets the requirements of 
40 CFR 70.7 with regard to permit issuance and revisions. Rule 401 KAR 
50:035 Section 5(2)(a) allows for the incorporation of a 
preconstruction permit into the title V permit as an administrative 
amendment. Section 1(3)(e) defines administrative amendment as a 
revision to a permit that incorporates into the part 70 permit 
requirements from preconstruction review permits, if the 
preconstruction review meets procedural requirements substantially 
equivalent to those that would be applicable to the change if it were 
subject to review as a permit revision (i.e., requirements of 40 CFR 
70.7 and 70.8). Even though Section 5(2)(a) details the actual 
procedural requirements necessary to incorporate preconstruction 
permits into part 70 permits, it does not provide for EPA review 
consistent with 40 CFR 70.8. For full approval of the Commonwealth's 
program, Kentucky would need to revise Rule 401 KAR 50:035 Section 
5(2)(a) to provide for EPA review consistent with 40 CFR 70.8.
    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 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 program, a list of insignificant activities and emissions levels 
which need not be included in permit 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.
    Kentucky establishes criteria for insignificant activities in Rule 
401 KAR 50:035, Subsection 2(3); however, these criteria require that 
all activities be included in the application. By requiring description 
in the application, Kentucky's rule nullifies the effect of allowing 
for insignificant activities as contemplated by the part 70 rule, which 
would allow no or minimal description in the application. Since part 70 
does not require a State to establish provisions for insignificant 
activities, this does not create a program approval issue. However, 
Kentucky has indicated to EPA that it plans to revise these provisions 
to take advantage of the flexibility allowed by Part 70. EPA will 
evaluate such revisions when they are submitted.
    Part 70 of the operating permits regulations 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 that 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 require sufficiently prompt reporting 
of deviations. Rule 401 KAR 50:035, Subsection 4(1)(c)3.b. states that 
Kentucky will define prompt reporting in the permit in relation to the 
degree and type of deviation likely to occur and the applicable 
requirements.
    Subsection 2(6) of Kentucky's general compliance requirements 
regulation, Rule 401 KAR 50:055, provides the Commonwealth the 
authority to grant individual variances for opacity standards for 
emissions from a stack or a control device. The Commonwealth provides 
that it will grant this variance upon a demonstration by the owner or 
operator that the affected facility and associated air pollution 
control equipment were operated and maintained in a manner to minimize 
the opacity of emissions during the performance tests. The EPA regards 
this provision as wholly external to the program submitted for approval 
under Part 70, and consequently proposes to take no action on these 
provisions of Commonwealth law in this rulemaking. 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. In 
other words, a variance does not affect the title V source until the 
title V permit is modified pursuant to the procedures in part 70. EPA 
reserves the right to enforce the terms of the part 70 permit where the 
permitting authority purports to grant relief from the duty to comply 
with a Part 70 permit in a manner inconsistent with Part 70 procedures. 
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.''
    The complete Kentucky operating permits program submittal and the 
TSD are available for review for more detailed information. The TSD 
contains the detailed analysis of Kentucky's program and describes the 
manner in which Kentucky's program meets all of the operating permit 
program requirements of 40 CFR part 70.
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 (Consumer Price Index (CPI) adjusted from 1989). The $25 
per ton amount is presumed, for program approval, to be sufficient to 

[[Page 46075]]
cover all reasonable program costs and is thus referred to as the 
``presumptive minimum.''
    Kentucky has opted to adopt an approach similar to the 
``presumptive minimum'' of $25/ton (annually adjusted by the CPI) 
approach. Emission fees will be collected from all sources subject to 
title V for actual emissions of each regulated pollutant, except carbon 
monoxide. Also, fees will be assessed on the first 4,000 tons per 
regulated pollutant per facility. A minimum fee of $150 is assessed for 
sources emitting less than 25 tons per year.
    A unique feature of the Kentucky emission fee is that the amount of 
fee to be collected is established in regulation. Kentucky Rule 401 KAR 
50:038 provides for the collection of $6,594,700 during state fiscal 
year 1995-96. It further provides the authority to collect an amount 
during each subsequent fiscal year, increased in direct proportion to 
the CPI if needed to fund the program. While this guarantees that 
Kentucky will continue to have the funds necessary to operate the title 
V program at a level at least equal to the 1995-96 level, it does not 
guarantee that the cost per ton of emissions will increase at a rate 
equal to the CPI.
    For 1995-96, Kentucky estimates the total billable emissions to be 
211,919 tons. Based upon that estimate, the average cost per ton for 
all sources, including any non-major sources subject to the title V 
program, in 1995-96 will be $31.19 per ton. If the fee was collected 
only from major sources, the estimated cost per ton would be $34.32 per 
ton. Kentucky has demonstrated that the fees collected will be 
sufficient to administer the program.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority and/or Commitments for Section 112 Implementation. 
Kentucky has demonstrated in its title V program submittal broad legal 
authority to incorporate into permits and enforce all applicable 
requirements. This legal authority is contained in Kentucky's enabling 
legislation and in regulatory provisions defining ``applicable 
requirements'' and stating that the permit must incorporate all 
applicable requirements. Kentucky has further supplemented its broad 
legal authority with a commitment to ``take action, following 
promulgation by EPA of regulations implementing section 112 of Title 
III of the Clean Air Act to either incorporate such new or revised 
provisions by reference into Kentucky rules or submit Kentucky-drafted 
rules, for EPA approval, to implement these provisions.'' EPA has 
determined that this commitment, in conjunction with Kentucky's broad 
statutory and regulatory authority, adequately assures compliance with 
all section 112 requirements. EPA regards this commitment as an 
acknowledgement by Kentucky of its obligation to obtain further 
regulatory authority as needed to issue permits that assure compliance 
with section 112 applicable requirements. This commitment does not 
substitute for compliance with part 70 requirements that must be met at 
the time of program approval.
    EPA is interpreting the above legal authority and commitment to 
mean that Kentucky is able to carry out all section 112 activities. For 
further rationale on this interpretation, please refer to the Technical 
Support Document accompanying this proposed interim approval.
    b. Implementation of Section 112(g) Upon Program Approval. EPA 
issued an interpretive notice on February 14, 1995 (60 FR 8333), which 
outlines EPA's revised interpretation of section 112(g) applicability. 
The notice postpones the effective date of section 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), Kentucky 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 Commonwealth regulations.
    EPA is aware that Kentucky lacks a program designed specifically to 
implement section 112(g). However, Kentucky does have a preconstruction 
review program within its permits rule that can serve as an adequate 
implementation vehicle during the defined transition period because it 
would allow the Commonwealth to select control measures that would meet 
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 Kentucky's 
preconstruction review program found in Rule 401 KAR 50:035, 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 section 112(g) promulgation and adoption of a 
Commonwealth 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 Commonwealth 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 Commonwealth to adopt regulations consistent with 
the Federal requirements.
    c. Program for Delegation of Section 112 Standards as Promulgated. 
Requirements for approval, specified in 40 CFR 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 Commonwealth's program 
contain adequate authorities, adequate resources for implementation, 
and an expeditious compliance schedule, which are also requirements 
under part 70. Therefore, EPA is also proposing to grant approval under 
section 112(l)(5) and 40 CFR 63.91 of the Commonwealth's program for 
receiving delegation of future section 112 standards that are unchanged 
from the Federal standards as promulgated. In addition, EPA proposes 
delegation of all existing standards and programs under 40 CFR parts 61 
and 63 for part 70 sources and non-part 70 sources.1 

[[Page 46076]]
Kentucky has informed EPA that it intends to accept delegation of 
section 112 standards through adoption by reference. The details of the 
Commonwealth's use of these delegation mechanisms are set forth in a 
letter dated April 14, 1995, submitted by Kentucky as a title V program 
addendum.

    \1\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. The EPA will work with the State in the development of 
its radionuclide program to ensure that permits are issued in a 
timely manner.
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    d. Commitment to implement Title IV of the Act. The Commonwealth of 
Kentucky developed acid rain permit regulations as Rule 401 KAR 50:072, 
which was submitted to EPA on April 19, 1995, as part of the operating 
permits program. The Commonwealth also submitted standard acid rain 
permit application forms which will be revised as updated forms are 
provided by the EPA. These rules and permit application forms meet the 
requirements of the acid rain program.
B. Proposed Actions

1. Source Category-Limited Interim Approval
    The EPA is proposing to grant SCL interim approval to the operating 
permit program submitted by Kentucky on December 27, 1993, and as 
supplemented on November 15, 1994, April 14, 1995, May 3, 1995, and May 
22, 1995. If this approval is promulgated, the State must make the 
following changes to receive full approval: (1) Revise the definitions 
of ``emissions unit'' and ``stationary source'' to include emissions of 
any pollutant listed under section 112(b) of the Act; (2) revise the 
definition of ``regulated air pollutant'' to include any pollutant 
subject to any requirements established under section 112 of the Act; 
and (3) revise Rule 401 KAR 50:035 section 5(2)(a) to provide for EPA 
review consistent with 40 CFR 70.8. in order to allow for requirements 
from preconstruction review permits to be incorporated into part 70 
permits via administrative amendments.
    This interim approval, which may not be renewed, extends for a 
period of up to 2 years. During the interim approval period, the 
Commonwealth is protected from sanctions for failure to have a program, 
and EPA is not obligated to promulgate a Federal permits program in the 
Commonwealth. Permits issued under a program with interim approval have 
full standing with respect to Part 70, and the 1-year time period for 
submittal of permit applications by subject sources begins upon interim 
approval, as does the 3-year time period for processing the initial 
permit applications.
2. Program for Straight Delegation of Section 112 Standards
    As discussed above in section II.A.4.c, EPA is proposing to grant 
approval under section 112(l)(5) and 40 CFR 63.91 of the Commonwealth's 
program for receiving delegation of future section 112 standards that 
are unchanged from Federal standards as promulgated. Additionally, EPA 
is proposing to delegate existing standards and programs under 40 CFR 
parts 61 and 63 for part 70 sources and non-part 70 sources.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of the Commonwealth's submittal and other 
information relied upon for the proposed interim approval are contained 
in docket number KY-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. The EPA will 
consider any comments received by October 5, 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

    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 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 22, 1995.
Patrick M. Tobin,
Acting Regional Administrator.
[FR Doc. 95-21938 Filed 9-1-95; 8:45 am]
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