[Federal Register Volume 60, Number 174 (Friday, September 8, 1995)]
[Rules and Regulations]
[Pages 46771-46774]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22086]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AR-FRL-5293-1]


Clean Air Act Final Interim Approval of Operating Permits 
Program; the State of Arkansas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final Interim Approval.

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SUMMARY: The EPA is promulgating interim approval of the Operating 
Permits program submitted by the Arkansas Department of Pollution 
Control and Ecology (ADPCE) for the State of Arkansas 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.

EFFECTIVE DATE: October 10, 1995.

ADDRESSES: Copies of the State's submittal and other supporting 
information used in developing the final interim approval are available 
for inspection during normal business hours at the following location:

U. S. Environmental Protection Agency, Region 6, Air Programs Branch 
(6PD-R), 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.
Arkansas Department of Pollution Control and Ecology, 8001 National 
Drive, Little Rock, Arkansas 72219-8913.

FOR FURTHER INFORMATION CONTACT: Wm. Nicholas Stone, Air Permits 
Section (6PD-R), Environmental Protection Agency, Region 6, 1445 Ross 
Avenue, Suite 700, Dallas, Texas 75202-2733, telephone (214) 665-7226.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    Title V of the 1990 Clean Air Act Amendments, sections 501-507 of 
the Clean Air Act (``the Act''), and implementing regulations at 40 
Code of Federal Regulations (CFR) part 70 require that States develop 
and submit Operating Permits programs to the EPA by November 15, 1993, 
and that the EPA act to approve or disapprove each program within one 
year after receiving the submittal. 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, the 
EPA may grant the program interim approval for a period of up to two 
years. If the EPA has not fully approved a program by two years after 
the date of November 15, 1993, or by the end of an interim program, it 
must establish and implement a Federal program.
    On September 19, 1994, the EPA proposed interim approval of the 
Operating Permits program for the State of Arkansas. See 59 FR 47828 
(September 19, 1994). The EPA received public comment on the proposal 
and compiled a Technical Support Document which describes the Operating 
Permits program in greater detail. In this document, the EPA is taking 
final action to promulgate interim approval of the Operating Permits 
program for the State of Arkansas.

II. Final Action and Implications

A. Analysis of State Submission

     The State of Arkansas submitted to the EPA, under a cover letter 
from the Governor dated October 29, 1993, the State's Operating Permits 
program. The submittal has adequately addressed all 16 elements 
required for full approval as discussed in part 70, with the exception 
of five interim issues listed in the proposal: (1) Reference of 
Prevention of Significant Deterioration (PSD) applicability for new 
construction and modification, (2) incorporation by reference of the 
part 70 provisions regarding complete application requirements and 
permit content requirements, (3) revision of the minor modification 
procedure, (4) providing a definition of the term ``prompt'', and (5) 
submission of a State Implementation Plan (SIP) revision for Regulation 
19 consistent with Regulation 26. The State of Arkansas appropriately 
addressed all requirements necessary to receive interim approval of the 
State Operating Permits program pursuant to title V of the Act and 40 
CFR part 70.

B. Response to Comments

     Comments were received from three groups during the comment period 
that ran from September 19, 1994, until October 19, 1994. Listed below 
are the responses to comments received on the proposed interim approval 
for the Arkansas Operating Permits program.
1. Section 112(g) Implementation
    Comments were made that the EPA should not allow Arkansas to 
implement section 112(g) until Federal rulemaking is complete. Also, 
objections were made to the State's use of its preconstruction permit 
process to implement section 112(g) requirements.
    The EPA does not agree with the comment. In its proposed interim 
approval of Arkansas' part 70 program, the EPA proposed to approve the 
State's preconstruction review program for the purpose of implementing 
section 112(g) during the transition period before promulgation of a 
Federal rule implementing section 112(g). This proposal was based in 
part on an interpretation of the Act that would require sources to 
comply with section 112(g) beginning on the date of approval of the 
title V program, regardless of whether the EPA had completed its 
section 112(g) rulemaking. The EPA has since revised this 
interpretation of the Act in a Federal Register notice published on 
February 14, 1995, 60 FR 8333. The revised interpretation postpones the 
effective date of section 112(g) until after the EPA has promulgated a 
rule addressing that provision. The revised notice sets forth in detail 
the rationale for the revised interpretation.
    The section 112(g) interpretive notice explains that the EPA is 
still 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 the EPA will provide for any such additional delay in the final 
section 112(g) rulemaking. Unless and until the EPA provides for such 
an additional postponement of section 112(g), Arkansas must be able to 
implement section 112(g) during the transition period between 
promulgation of the Federal section 112(g) rule and 

[[Page 46772]]
adoption of implementing State regulations.
    For this reason, the EPA is finalizing its approval of Arkansas' 
preconstruction review program. This approval clarifies that the 
preconstruction review program is available as a mechanism to implement 
section 112(g) during the transition period between promulgation of the 
section 112(g) rule and adoption by Arkansas of rules established to 
implement section 112(g). However, since the approval is for the single 
purpose of providing a mechanism to implement section 112(g) during the 
transition period, the approval itself will be without effect if the 
EPA decides in the final section 112(g) rule that sources are not 
subject to the requirements of the rule until State regulations are 
adopted. Further, the EPA is limiting the duration of this approval to 
18 months following promulgation by EPA of the section 112(g) rule.
    The EPA believes that, although Arkansas currently lacks a program 
designed specifically to implement section 112(g), the preconstruction 
review program will serve as an adequate implementation vehicle during 
a transition period because it will allow Arkansas to select control 
measures that would meet Maximum Achievable Control Technology, as 
defined in section 112, and incorporate these measures into a federally 
enforceable preconstruction permit.
2. Title I Modification Definition
    Comments were made that the EPA has proposed interim approval of 
the Arkansas program because the State definition of title I 
modification is inconsistent with the new definition of ``title I 
modification'' which the EPA has proposed in the revision to 40 CFR 
part 70 (59 FR 44460, August 29, 1994). Comments objected to the EPA's 
reinterpretation of title I modification as an interim approval issue.
    The EPA does not agree with the comment. As noted in the proposal 
for interim approval, the Arkansas Plan of Implementation for Air 
Pollution Control SIP at Regulation 19.2 clearly defines a modification 
as any increase in emissions. This definition does not provide for a 
threshold of emissions that could avoid New Source Review. Therefore, 
the threshold of emission levels at Regulation 26.10(b)(1) is 
inconsistent with the approved SIP definition of a modification. The 
Operating Permits program is consistent with part 70 by disallowing 
``title I modifications'' from using the minor modification procedure 
at Regulation 26.10(b)(7) which includes actions under the SIP. Because 
the SIP is federally approved and the provision at Regulation 
26.10(b)(7) is consistent with part 70, it is clear that the provision 
at Regulation 26.10(b)(1) is inconsistent with both the existing State 
law (the SIP) and with the Federal rule at 40 CFR 70.7(e)(2)(i)(A)(5). 
This inconsistency is discussed further under Number 3 below.
    The EPA required the State to revise the Operating Permits 
regulation because of this inconsistency and required the State to 
delete Regulation 26.10(b)(1) because it was inconsistent with the 
federally approved definition in the State's SIP. The EPA explained its 
reasoning for not allowing the use of a narrower definition of ``title 
I modifications'' in the Washington State final approval notice (see 59 
FR 55813, November 9, 1994) and incorporates that discussion here by 
reference.
3. Minor Modification Process
    Comments were made that the EPA lacked the authority to require the 
State to revise its minor modification process to delete the emissions 
level threshold for minor modification applicability. Comments stated 
their belief that the ``20% of the applicable definition of major 
source'' constituted a de minimus emissions increase and was allowable 
under the minor modification rule contained in part 70.
    The EPA does not agree. The Federal rule, 40 CFR 70.7(e)(3)(i), 
allows group processing of minor modifications that collectively meet 
an emission threshold of 10% of the emissions allowed by the permit for 
the emissions unit for which the change is requested, 20% of the 
applicable definition of major source, or five tons per year whichever 
is less, provided the minor modification criteria for individual 
changes at 40 CFR 70.7(e)(2)(i)(A) are also met. The criteria at 40 CFR 
70.7(e)(2)(i)(A)(5) and Regulation 26.10(b)(7) disallow changes that 
are title I modifications. As discussed under Number 2 above, the SIP 
at Regulation 19.2 defines ``modification'' as any increase in 
emissions. Because Regulation 26.10(b)(1) allows certain emissions 
increases to be processed under the minor modification procedure, the 
EPA considers the minor modification process in Regulation 26 to be 
inconsistent with itself and the Federal part 70 rule.
    The EPA is currently revising part 70 to clarify the definition of 
``title I modification'' (see 59 FR 44460, August 29, 1994). After this 
revision, the provision at Regulation 26.10(b)(1) might be interpreted 
as a de minimis threshold. As the promulgated Federal rule exists and 
the federally approved SIP exist, any increase in emissions would not 
be allowed under the minor modification procedure. The title I 
modification issue is discussed in detail in Number 2 above. The 
State's regulations must be consistent with the Federal rule as 
currently promulgated. Therefore, the EPA maintains that the State's 
regulations are inconsistent with the Federal rule because an emissions 
increase is allowed for individual changes under Regulation 26.10(b)(1) 
while the State's regulations at Regulation 26.10(b)(7) and the Federal 
rule at 40 CFR 70.7(e)(2)(i)(A)(5) disallow emissions increases.
4. Incorporation by Reference of PSD Requirements
    Comment was made that the State should not have to formally 
incorporate by reference the PSD requirements into Regulation 26 as 
stated in the proposal for this action.
    The EPA concurs with this comment. The proposal recommended 
incorporation of the PSD requirements in order to clarify the 
regulation for major sources. The State can effectively meet this 
requirement by amending the regulations at 26.3(b) with:
    (4) Any source subject to Sec. 19.9 of the Compilation of 
Regulations of the Arkansas State Implementation Plan for Air Pollution 
Control.
5. PSD Applicability for Constructed/Modified Sources
    Comment was made that the EPA should require Arkansas to revise its 
operating permit regulation so that the operating permit need only be 
revised before a change is placed in operation, rather than before 
construction begins.
    The EPA does not agree with this comment. The State of Arkansas has 
clearly demonstrated that major sources will be regulated by Regulation 
26. These sources are required to obtain a modification to the 
operating permit that incorporates the applicable requirements 
reflected in the SIP (Regulation 19) before construction begins. This 
procedure allows the facility to obtain a pre-construction permit as 
well as a modification to the operating permit. Also, this process 
allows for adequate public comment without duplicating the public 
notice process.
    If the State chose to revise the regulation as the comment 
suggests, the facility would still have to obtain a pre-construction 
permit under Regulation 19 before construction. This includes the 
requirement of full public review for significant modifications. Then, 
the 

[[Page 46773]]
facility would have to obtain a significant modification for the 
operating permit under Regulation 26 before operating the modified 
unit.
6. Deviation Reporting
    All three comments objected to the EPA requirement that the State 
define ``prompt'' in the regulations with respect to deviations.
    The EPA concurs with these comments. The notice for proposed 
approval reflected the most prudent position the EPA could take that 
would offer clear guidance to the regulated community while protecting 
the environment. Since publication of the notice, the EPA has 
reconsidered this position and agrees with the comments that the term 
``prompt'' may be defined in the permit.
    The EPA maintains that ``prompt'' should be defined as two to ten 
days after a deviation. This timeframe is sufficient in most cases to 
protect public health and safety as well as provide a forewarning of 
potential problems. The regulating authority should give consideration 
to shorter timeframes where potential health and safety concerns exist. 
Where ``prompt'' is defined in the individual permit but not in the 
program regulations, the EPA may veto permits that do not require 
sufficiently prompt reporting of deviations.
7. Variance Provisions
    Comments objected to the EPA's position that variance provisions 
under State statute do not apply to title V permits unless title V 
processes are followed.
    The EPA does not agree with these comments. As discussed in the 
proposed notice, the EPA recognizes the State's statutory authority to 
grant variances. However, 40 CFR part 70 does not allow States to grant 
variances from title V requirements. The EPA recognizes that title V 
permits may include compliance schedules for sources which are out of 
compliance with applicable requirements. However, such measures to 
bring a source into compliance are not the same as variances, which 
normally provide a complete exemption from a requirement for the 
duration of the variance. The EPA also recognizes that Arkansas may 
exercise enforcement discretion when addressing permit violations, but 
such discretion is not unlimited.
8. Incorporation by Reference of Application and Permit Content
    Comment was made that the State should not have to formally 
incorporate by reference the application and permit content 
requirements from 40 CFR 70.5(c) and 70.6(a-c) into Regulation 26 as 
stated in the proposal.
    The EPA does not agree with this comment. Though it may appear 
clear that the application content and permit content are fully 
incorporated into the State regulations, formal incorporation by 
reference will provide a date of promulgation to the incorporated 
provisions. Changes to the State's program are certain as the Clean Air 
Act Amendments are implemented, and in this way the State regulations 
are made clear for enforcement and implementation purposes.

C. Final Action
    The EPA is promulgating interim approval of the operating permits 
program submitted by the State of Arkansas on November 9, 1994. The 
State must make the following changes to receive full approval:
1. Incorporation by Reference
    The State must amend Regulation 26.4 and 26.7 to incorporate the 
date of promulgation of the rule at 40 CFR part 70 as referenced in the 
regulation. By incorporating the promulgation date of July 21, 1992, 
the State regulations will be made clear.
2. Minor Modification Procedures
    The language in the State's Regulation 26.10(b)(1) regarding 
emission levels must be deleted to make the regulations consistent with 
the Federal rule at 40 CFR 70.7(e)(2)(i)(A) and the State's Regulations 
26.10(b)(7) and 19.2.
3. Submission of Regulation 19
    The State of Arkansas must ensure consistency between the operating 
permits program (Regulation 26) and the SIP (Regulation 19). The State 
is working on a revision to Regulation 19.4 to make the SIP consistent 
with Regulation 26. A SIP revision must be submitted that is consistent 
with the rule at 40 CFR part 70 during the interim approval period.
    Arkansas' part 70 program approved in this notice applies to all 
part 70 sources (as defined in the approved program) within the State 
of Arkansas, except any sources of air pollution over which an Indian 
Tribe has jurisdiction. See, e.g., 59 FR 55813, 55815-55818 (November 
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 Clean Air Act; see also 59 FR 43956, 43962 (August 25, 
1994); 58 FR 54364 (October 21, 1993).
    This interim approval, which may not be renewed, extends until 
October 8, 1997. During this interim approval period, the State of 
Arkansas is protected from sanctions, and the EPA is not obligated to 
promulgate, administer and enforce a Federal Operating Permits program 
in the State of Arkansas. 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 this interim approval, as does the 
three year time period for processing the initial permit applications.
    If Arkansas fails to submit a complete corrective program for full 
approval by April 8, 1997, the EPA will start an 18 month clock for 
mandatory sanctions. If Arkansas then fails to submit a corrective 
program that the EPA finds complete before the expiration of that 18 
month period, the EPA will apply sanctions as required by section 
502(d)(2) of the Act, which will remain in effect until the EPA 
determines that the State of Arkansas has corrected the deficiency by 
submitting a complete corrective program.
    If the EPA disapproves Arkansas' complete corrective program, the 
EPA will apply sanctions as required by section 502(d)(2) on the date 
18 months after the effective date of the disapproval, unless prior to 
that date Arkansas has submitted a revised program and the EPA has 
determined that it corrected the deficiencies that prompted the 
disapproval.
    In addition, discretionary sanctions may be applied where warranted 
any time after the expiration of an interim approval period if the 
State of Arkansas has not timely submitted a complete corrective 
program or the EPA has disapproved its submitted corrective program. 
Moreover, if the EPA has not granted full approval to the Arkansas 
program by the expiration of this interim approval and that expiration 
occurs after November 15, 1995, the EPA must promulgate, administer and 
enforce a Federal permits program for the State of Arkansas upon 
interim approval expiration.
    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 the EPA as they apply to 
part 70 sources. Section 112(l)(5) requires that the State's program 
contain adequate authorities, 

[[Page 46774]]
adequate resources for implementation, and an expeditious compliance 
schedule, which are also requirements under part 70. Therefore, the EPA 
is also promulgating approval under section 112(l)(5) and 40 CFR 63.91 
of the State's program for receiving delegation of section 112 
standards that are unchanged from Federal standards as promulgated. 
This program for delegations only applies to sources covered by the 
part 70 program.

III. Administrative Requirements

Docket

    Copies of the State's submittal and other information relied upon 
for the final interim approval, including the eight public comments 
received and reviewed by the EPA on the proposal, are contained in 
docket number OPP-2-9-1 maintained at the EPA Regional Office. The 
docket is an organized and complete file of $100 million or more. Under 
Section 205, the 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 the EPA to 
establish a plan for informing and advising any small governments that 
may be significantly or uniquely impacted by the rule.
    The EPA has determined that the 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.

    Dated: August 25, 1995.
A. Stanley Meiburg,
Acting Regional Administrator (6RA).

    Part 70, title 40 of the Code of Federal Regulations is amended as 
follows:

PART 70--[AMENDED]

    1. The authority citation for part 70 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

    2. Appendix A to part 70 is amended by adding the entry for the 
State of Arkansas in alphabetical order to read as follows:

Appendix A to Part 70--Approval Status of State and Local Operating 
Permits Programs

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Arkansas

    (a) The ADPCE submitted its Operating Permits program on 
November 9, 1993, for approval. Interim approval is effective on 
October 10, 1995. Interim approval will expire October 8, 1997.
    (b) (Reserved)
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[FR Doc. 95-22086 Filed 9-7-95; 8:45 am]
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