[Federal Register Volume 60, Number 177 (Wednesday, September 13, 1995)]
[Proposed Rules]
[Pages 47521-47529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22723]



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[[Page 47522]]



ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AL01; FRL-5295-5]


Clean Air Act Proposed Interim Approval of Operating Permits 
Program; Alabama Department of Environmental Management, Jefferson 
County Department of Health, and the City of Huntsville Department of 
Natural Resources and Environmental Management

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes source category-limited interim approval of 
the State of Alabama Department of Environmental Management (ADEM) and 
the Jefferson County Department of Health (JCDH) operating permits 
programs. The EPA also proposes interim approval of the City of 
Huntsville Department of Natural Resources and Environmental Management 
(City of Huntsville) operating permits program. These proposed 
approvals are 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 13, 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 EPA Region 4 Office listed below. Copies of the 
State'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.

FOR FURTHER INFORMATION CONTACT: Joel Huey, 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. 4170.

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 
that define the minimum elements of an approvable State operating 
permits program and the corresponding standards and procedures by which 
EPA will approve, oversee, and withdraw approval of State operating 
permits programs (see 57 FR 32250 (July 21, 1992)). These rules are 
codified at 40 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 Part 70.4(e)(2) allows EPA to extend the review period 
for no more than one year following receipt of the additional material. 
The EPA received title V operating permits program submittals from the 
ADEM, JCDH, and City of Huntsville on December 15, 1993; December 14, 
1993; and November 15, 1993, respectively. The ADEM provided EPA with 
additional material in supplemental submittals dated March 3, 1994; 
March 18, 1994; June 5, 1995; July 14, 1995; and August 28, 1995. The 
JCDH and City of Huntsville provided EPA with additional material in 
supplemental submittals dated July 14, 1995, and July 20, 1995, 
respectively. Because these supplements materially changed the title V 
program submittals, EPA has extended the review period and will work 
expeditiously to promulgate a final decision on all programs.
    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, EPA may also grant such an interim approval. If EPA 
has not fully approved a program by two years after November 15, 1993, 
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 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 ADEM, JCDH, and City of Huntsville would be protected from 
sanctions, and EPA would not be obligated to promulgate, administer and 
enforce a Federal permits program for the ADEM, JCDH, and City of 
Huntsville. 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.
    Following final interim approval, if the ADEM, JCDH, or City of 
Huntsville failed to submit a complete corrective program for full 
approval by the date six months before expiration of the interim 
approval, EPA would start an 18-month clock for mandatory sanctions. If 
the ADEM, JCDH, or City of Huntsville 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 a complete corrective program had been 
submitted. Moreover, if the Administrator found a lack of good faith on 
the part of the ADEM, JCDH, or City of Huntsville, both sanctions under 
section 179(b) would apply after the expiration of the 18-month period 
until the Administrator determined that the department had come into 
compliance. In any case, if, six months after application of the first 
sanction, the ADEM, JCDH, or City of Huntsville 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 the 
ADEM, JCDH, or City of Huntsville'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 the ADEM, JCDH, or City of Huntsville 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 ADEM, JCDH, 
or City of Huntsville, both sanctions under section 179(b) would apply 
after the expiration of the 18-month period until the Administrator 
determined that the department had come into compliance. In all cases, 
if, six months after EPA applied the first sanction, the ADEM, JCDH, or 
City of Huntsville had not submitted a revised program that EPA had 
determined corrected the 

[[Page 47523]]
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 the ADEM, JCDH, 
or City of Huntsville 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 the ADEM, JCDH, or 
City of Huntsville'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 
ADEM, JCDH, or City of Huntsville upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

    The EPA has concluded that the operating permits programs submitted 
by the ADEM, JCDH, and City of Huntsville substantially meet the 
requirements of title V and part 70, and proposes to grant interim 
approval to the programs. For detailed information on the analysis of 
the State'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. The ADEM, JCDH, and City of Huntsville requested, under the 
signature of James W. Warr, Director of the ADEM and governor's 
designee, interim approval to administer the State and Locals operating 
permits program submittals in all areas of the State of Alabama with 
the exception of Indian reservations and tribal lands. The ADEM and 
JCDH also requested source category-limited interim approval.
    The ADEM, JCDH, and City of Huntsville operating permits program 
submittals do not assert jurisdiction over Indian lands or reservations 
for purposes of 40 CFR part 70 and title V. The EPA will, at a future 
date, conduct a Federal title V operating permits program governing 
title V sources of air emissions on Indian lands and reservations in 
Alabama.
    The ADEM submittal, provided as Section 1--``Complete Program 
Description,'' addresses 40 CFR 70.4(b)(1) by describing how the ADEM 
intends to carry out its responsibilities under the part 70 
regulations. The JCDH and City of Huntsville submittals also provided 
descriptions of how they intend to carry out their responsibilities 
under the part 70 regulations. They are included in Section 1 of the 
JCDH submittal and Section 2 of the City of Huntsville submittal. The 
program descriptions have 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 ADEM, JCDH, and City of Huntsville have 
submitted legal opinions showing adequate legal authority as required 
by Federal law and regulation. However, their legal opinions also state 
that the ADEM, JCDH, and City of Huntsville do not have adequate 
criminal authority as required by 40 CFR 70.11(a)(3)(ii)-(iii). This 
lack of criminal authority precludes the ADEM, JCDH, and City of 
Huntsville from obtaining full approval of their title V programs.
    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 2 of the ADEM submittal, 
Attachment I of the JCDH submittal, and Section 8 of the City of 
Huntsville submittal include the permit application forms. The permit 
application forms meet the requirements of 40 CFR 70.5(c).
2. Regulations and Program Implementation
    The ADEM submitted Regulation 335-3-16 (``Major Source Operating 
Permit'') and Regulation 335-1-7 (``Air Division Operating Permit 
Fees'') for implementing the State part 70 program as required by 40 
CFR 70.4(b)(2). Sufficient evidence of their procedurally correct 
adoption was included in Sections 3 and 4 of the ADEM submittal. The 
JCDH submitted Chapter 18 (``Major Source Operating Permits'') and 
Chapter 16 (``Operating Permit Fees'') of the Air Pollution Control 
Rules and Regulations for implementing their part 70 program. 
Sufficient evidence of their procedurally correct adoption was included 
in Attachment 3 of the JCDH submittal. The City of Huntsville submitted 
Regulations 3.1 (``General Provisions''), 3.6 (``Permit Application 
Fees''), 3.7 (``Major Source Operating Permit Annual Emissions Fees''), 
and 3.9 (``Major Source Operating Permit'') of the Air Pollution 
Control Rules and Regulations for implementing their part 70 program. 
Sufficient evidence of their procedurally correct adoption was included 
in Section 4 of the City of Huntsville's submittal. Copies of all 
applicable State/Local statutes and regulations that authorize the part 
70 program, including those governing State/Local administrative 
procedures, were included with the submittals.
    The following requirements, set out in EPA's part 70 operating 
permits program review, are addressed in Section 3 of the ADEM 
submittal: (A) Applicability requirements, [40 CFR 70.3(a)]: 335-3-16-
.03; (B) Permit application requirements, [40 CFR 70.5]: 335-3-16-.04; 
(C) Provisions for permit content, [40 CFR 70.6]: standard permit 
requirements: 335-3-16-.05(1); permit duration: 335-3-16-.05(2); 
monitoring and related recordkeeping and reporting requirements: 335-3-
16-.05(3); compliance requirements: 335-3-16-.06 and .07; (D) 
Provisions for permit issuance, renewals, reopenings and revisions, [40 
CFR 70.7]: 335-3-16-.12 and 335-3-16-.13; and (E) Permit review by EPA 
and affected State, including public participation [40 CFR 70.6]: 335-
3-16-.15.
    The following requirements, set out in EPA's part 70 operating 
permits program review, are addressed in Attachment 3 of the JCDH 
submittal: (A) Applicability requirements, [40 CFR 70.3(a)]: Regulation 
18.3; (B) Permit application requirements, [40 CFR 70.5]: Regulation 
18.4; (C) Provisions for permit content, [40 CFR 70.6]: standard permit 
requirements: Regulation 18.5.1; permit duration: Regulation 18.5.2; 
monitoring and related recordkeeping and reporting requirements: 
Regulation 18.5.3; compliance requirements: Regulations 18.7 and 18.7; 
(D) Provisions for permit issuance, renewals, reopenings and revisions, 
[40 CFR 70.7]: Regulations 18.12 and 18.13; and (E) Permit review by 
EPA and affected State, including public participation [40 CFR 70.6]: 
Regulation 18.14.
    The following requirements, set out in EPA's part 70 operating 
permits program review, are addressed in Section 4 of the City of 
Huntsville submittal: (A) Applicability requirements, [40 CFR 70.3(a)]: 
Regulation 3.9.1; (B) Permit application requirements, [40 CFR 70.5]: 
Regulation 3.9.2; (C) Provisions for permit content, [40 CFR 70.6]: 
standard permit requirements: Regulation 3.9.5(a); 

[[Page 47524]]
permit duration: Regulation 3.9.5(b); monitoring and related 
recordkeeping and reporting requirements: Regulations 3.9.5(c), 
3.9.5(d) and 3.9.5(e); compliance requirements: Regulations 3.9.6 and 
3.9.7; (D) Provisions for permit issuance, renewals, reopenings and 
revisions, [40 CFR 70.7]: Regulations 3.9.10 and 3.9.11; and (E) Permit 
review by EPA and affected State, including public participation [40 
CFR 70.6]: Regulation 3.9.13.
    Alabama statutes 22-22A-5(18) and (19) provide civil enforcement 
authority consistent with 40 CFR 70.11, including authority to recover 
penalties and fines in a maximum amount of not less than $10,000 per 
day per violation. However, current statutes do not provide adequate 
authority to assess monetary criminal penalties as required by the Act. 
Section 70.11(a)(3) (ii) and (iii) require criminal fines recoverable 
against any person who knowingly violates any applicable requirement, 
any permit condition, or any fee or filing requirement; knowingly makes 
any false material statement, representation or certification in any 
form, in any notice or report required by a permit; or who knowingly 
renders inaccurate any required monitoring device or method. These 
fines shall be recoverable in a maximum amount of not less than $10,000 
per day per violation. Section 22-28-22(d) of the Alabama Air Pollution 
Control Act provides that any person who knowingly violates or fails or 
refuses to obey or comply with that chapter or who knowingly submits 
any false information under that chapter shall be guilty of a 
misdemeanor and, upon conviction, may be sentenced to hard labor for 
not more than a year. To receive full program approval, the State of 
Alabama must amend its state law to provide for adequate criminal fines 
consistent with 40 CFR 70.11.
    The ADEM title V program will implement a two-step process for 
application completeness, first determining an application to be 
administratively complete, then requiring application updates as needed 
to support draft permit preparation. The ADEM has committed in a letter 
to EPA dated August 28, 1995, to requiring initial applications that: 
(1) define the part 70 applicable requirements and major/minor source 
status, (2) certify compliance status with respect to all applicable 
requirements, (3) allow the permitting authority to determine the 
approved permit issuance schedule, and (4) include certifications of 
application truth, accuracy, and completeness. The EPA notes that this 
type of flexibility is appropriate and has outlined guidance in section 
II.D. of the July 25, 1995, White Paper for Streamlined Development of 
Part 70 Permit Applications. The JCDH and City of Huntsville programs 
require all title V sources to submit complete applications within 12 
months of interim approval.
    Section 70.5(d) requires that any application form, report, or 
compliance certification submitted pursuant to the title V regulations 
shall contain a certification by a responsible official that, based on 
information and belief formed after reasonable inquiry, the statements 
and information in the document are true, accurate, and complete. ADEM 
Regulation 335-3-16-.04(9)(a) (JCDH Regulation 18.4.9(a) and City of 
Huntsville Regulation 3.9.4(a)) satisfies this requirement. ADEM 
Regulation 335-3-16-.04(9)(b) (JCDH Regulation 18.4.9(b) and City of 
Huntsville Regulation 3.9.4(b)) adds the following condition: 
``Certification for completeness shall not be required for initial 
applications that will not be processed in the first year the 
regulations in this chapter are effective.'' Since applications will be 
received from all sources by the end of the first year following 
program approval, and these applications will meet the requirements 
listed above, ADEM Regulation 335-3-16-.04(9)(b) (JCDH Regulation 
18.4.9(b) and City of Huntsville Regulation 3.9.4(b)) must be deleted 
from the State's regulations.
    The ADEM and JCDH define ``insignificant activity'' as any air 
emission or air emissions unit at a plant that has the potential to 
emit less than 5 tons per year of any criteria pollutant or less than 
1,000 pounds per year of any hazardous air pollutant (HAP). The City of 
Huntsville's program defines ``insignificant activity'' as any air 
emission or air emissions unit at a plant that the Director has 
determined to be insignificant and has been included by the Director on 
a list of insignificant emission levels or insignificant emissions 
units. All three programs require that insignificant activities be 
listed in the permit application forms. The programs also define 
``trivial activity'' as any air emission from a unit that is considered 
inconsequential, as determined by the Director/Health Officer, and do 
not require that trivial activities be listed in the permit application 
forms. To obtain full approval, the program regulations must clarify 
that emissions thresholds for individual activities or units that are 
exempted will not exceed the lesser of 1,000 pounds per year or section 
112(g) de minimis levels for HAPs. The State may, however, set higher 
levels of emissions thresholds upon demonstration that the higher 
levels are insignificant.
    The ADEM, JCDH, and City of Huntsville programs provide that the 
Director/Health Officer will maintain a list of air emissions or air 
emissions units that are considered to be insignificant activities and 
a list of air emissions units or changes in air emissions that have 
been determined to be trivial. The ADEM, JCDH, and City of Huntsville 
programs do not include the list of insignificant activities as part of 
their regulations nor do they require review and approval of them by 
EPA. Section 70.5(c) states that EPA may approve, as part of a State 
program, a list of insignificant activities and emissions levels which 
need not be included in the 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. To obtain full approval the State and the local agencies 
must revise their approach on insignificant activities such that the 
list is made available for EPA and public review and comment each time 
the list is revised.
    The ADEM, JCDH, and City of Huntsville programs also lack assurance 
that insignificant activities will not be exempted from title V 
permitting requirements or excluded from major source applicability 
determinations. Section 70.5(c) states that a part 70 permit 
application ``may not omit information needed to determine the 
applicability of, or to impose, any applicable requirement, or to 
evaluate the fee amount required under the schedule approved * * *'' To 
obtain full approval, the State and the Local agencies must revise 
their regulations consistent with section 70.5(c) to ensure that 
emissions units with applicable requirements will not be exempted from 
title V permitting requirements or major source applicability 
determinations, even if listed on an approved list of insignificant 
activities.
    Sections 70.4(b)(3)(iii) and 70.6(a)(2) state that operating 
permits programs must issue permits for a fixed term of five years in 
the case of permits with acid rain provisions and issue all other 
permits for a period not to exceed five years, except for permits 
issued for solid waste incineration units combusting municipal waste 
subject to standards under section 129(e) of the Act. ADEM Regulation 
335-3-16-.05(2)(c) (JCDH Regulation 18.5.2(c) and City of Huntsville 
Regulation 3.9.5(b)(3)) states: ``Permits which are issued for new 
emission units before the unit becomes operational shall be effective 
for five years after operation of the unit 

[[Page 47525]]
commences.'' The EPA interprets this provision to mean that facilities 
may be issued ``merged'' new source review (NSR)-operating permits such 
that an operating permit has a future effective date, and the 
expiration date would be five years from the effective date. Operating 
permits would not be issued with a term longer than five years (except 
for the case of solid waste incineration units). A ``merged'' NSR-
operating permit is not a title V permit until the source commences 
operation. Also, the title V permit will not become effective if new 
requirements become applicable to the source (or if other factors 
change that would render the operating permit invalid) until the permit 
is revised to reflect these changes.
    The ADEM, JCDH, and City of Huntsville rules provide for 
operational flexibility in accordance with 40 CFR 70.4(b)(12)(i). 
However, the following provisions regarding trading of emissions under 
a Federally enforceable emissions cap are not provided for:
    (a) The program shall require the permitting authority, if a permit 
applicant requests it, to issue permits that contain terms and 
conditions, including all standard permit requirements and compliance 
requirements, allowing for the trading of emissions increases and 
decreases in the permitted facility solely for the purpose of complying 
with a Federally enforceable emissions cap that is established in the 
permit independent of otherwise applicable requirements. [See 40 CFR 
Part 70.4(b)(12)(iii)]
    (b) The permit application shall include additional information as 
determined to be necessary by the permitting authority to define 
alternative operating scenarios identified by the source or to define 
permit terms and conditions for the trading of emissions increases and 
decreases in the permitted facility. [See 40 CFR Part 70.5(c)(7)]
    (c) The permit shall include terms and conditions, if the permit 
applicant requests them, for the trading of emission increases and 
decreases in the permitted facility, to the extent that the applicable 
requirements provide for trading such increases and decreases without a 
case by case approval of each emissions trade. [See 40 CFR Part 
70.6(a)(10)]
    As a prerequisite for full program approval, the ADEM, JCDH, and 
City of Huntsville regulations must rectify this lack of flexibility on 
emissions trading procedures. However, EPA notes that the flexibility 
provisions of 40 CFR part 70 are under revision due to litigation on 
the rule. The EPA will allow the State/local programs to make these 
changes according to the revisions to part 70 when published in order 
to avoid duplicative rulemaking.
    ADEM Regulation 335-3-16-.04(8)(b)(3) (JCDH Regulation 18.4.8(c)(3) 
and City of Huntsville Regulation 3.9.3(c)(3)) states that the permit 
application shall include ``emission rates of all pollutants in tons 
per year and in such terms as are necessary to establish compliance 
consistent with the applicable standard reference test method, or 
alternative method approved by the Department's Director.'' The State 
cannot be granted authority to approve alternatives to standard 
reference test methods that are specified by applicable requirements. 
Performance tests shall be conducted in accordance with the procedures 
set forth in 40 CFR Parts 60, 61 and 63 unless alternate methods or 
procedures are approved by the EPA Administrator. Although the 
Administrator retains the exclusive right to approve equivalent or 
alternate test methods as specified in 40 CFR 60.8(b)(2) and (3), 
61.13(h)(1)(ii), and 63.7(e)(2)(ii), the State may approve minor 
changes in methodology provided these changes are reported to EPA. 
While this is not a change to current practice, full program approval 
of the ADEM, JCDH, and City of Huntsville Rules will require deletion 
of the Department Director's discretion in approving alternatives to 
standard reference test methods.
    ADEM Regulation 335-3-16-.13(4) (JCDH Regulation 18.13.4 and City 
of Huntsville Regulation 3.9.11(d)) requires that significant 
modifications be incorporated into operating permits by the same 
procedures required for an initial permit application, including public 
participation, review by affected States, and review by EPA. The rule 
also defines significant modifications as changes that result in a net 
emissions increase of any of the pollutants and levels listed in ADEM 
Regulation 335-3-14-.04 or .05, or any modifications under NSPS or 
NESHAP. This definition of significant modifications is deficient in 
that 40 CFR section 70.7(e)(4)(i) requires, at a minimum, the State 
program to consider significant modifications to include every 
significant change in existing monitoring permit terms or conditions 
and every relaxation of reporting or recordkeeping permit terms or 
conditions. As a prerequisite for full program approval, the ADEM, 
JCDH, and City of Huntsville Rules must be revised to make this 
clarification to its definition of significant modifications. However, 
EPA notes that the permit revision requirements of 40 CFR part 70 are 
under revision due to litigation on the rule. The EPA will allow the 
State/local programs to make these changes according to the revisions 
to part 70 when published in order to avoid duplicative rulemaking.
    ADEM Regulation 335-3-16-.13(1) (JCDH Regulation 18.13.1 and City 
of Huntsville Regulation 3.9.11(a)) contains the requirements of 40 CFR 
70.7(d) for administrative amendments, but does not require the 
Administrator's approval for similar changes allowed by this chapter. 
This is inconsistent with 40 CFR 70.7(d)(1)(vi) which requires that, in 
order for changes other than those specified in 40 CFR 70.7(d)(i) 
through (v) to be made as administrative amendments, they must first be 
determined by the Administrator, as part of the approved part 70 
program, to be similar to those specified in 70.7(d)(1) (i) through 
(iv). For full approval, ADEM Regulation 335-3-16-.13(1)(a)7 (JCDH 
Regulation 18.13.1(a)(7) and City of Huntsville Regulation 
3.9.11(a)(1)(vii)) must be revised to specifically list the types of 
changes that the State proposes to be eligible for processing as 
administrative amendments, thus obtaining the Administrator's approval 
of such changes as part of the State's part 70 program.
    ADEM Regulation 335-3-16-.13(1)(a)6 states that an administrative 
permit amendment is a permit revision that ``incorporates into a permit 
issued under this chapter the requirements from preconstruction review 
permits authorized under this Administrative Code, provided that the 
process used meets procedural requirements substantially equivalent to 
the requirements of ADEM Admin. Code r. 335-3-16-.12 and 335-3-16-.14 
of this chapter * * *.'' This rule lacks the requirement of 40 CFR 
70.7(d)(1)(v) for permit review by EPA and affected states. For full 
program approval, ADEM Regulation 335-3-16-.13(1)(a)6 must be revised 
to include the required EPA and affected states review provisions.
    The Alabama Air Pollution Control Act, section 22-28-13, provides 
the ADEM, JCDH, and City of Huntsville with authority to grant 
individual variances beyond the limitations prescribed in the Alabama 
Air Pollution Control Act. This authority is exercised whenever it is 
found, upon presentation of adequate proof, that compliance with any 
rule or regulation, requirement, or order of the commission would 
impose serious hardship without equal or greater benefits to the public 
and that the emissions occurring, or proposed to occur, do not endanger 
or tend to endanger human health or safety, 

[[Page 47526]]
human comfort, or aesthetic values. The EPA regards this provision as 
wholly external to the program submitted for approval under part 70, 
and consequently is proposing to take no action on this provision of 
State law. The EPA has no authority to approve provisions of State law, 
such as the variance provision referred to, which are inconsistent with 
the Act. The EPA does not recognize the ability of a permitting 
authority to grant relief from the duty to comply with a Federally 
enforceable part 70 permit, except where such relief is granted through 
procedures allowed by part 70. A part 70 permit may be issued or 
revised (consistent with part 70 permitting procedures) to incorporate 
those terms of a variance that are consistent with applicable 
requirements. A part 70 permit may also incorporate, via part 70 
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 in which it is based.''
    The complete program descriptions submitted by the ADEM, JCDH, and 
City of Huntsville and the Technical Support Documents (TSDs) for each 
program are available for review of more detailed information. The TSDs 
contain detailed analysis of the programs and describe the manner in 
which the programs 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 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 
cover all reasonable program costs and is thus referred to as the 
``presumptive minimum.''
    The ADEM and JCDH have adopted the ``presumptive minimum'' of $25 
per ton (annually adjusted by the CPI), for each regulated pollutant 
except carbon monoxide. Also, fees will be assessed on the first 4,000 
tons per regulated pollutant per facility. The City of Huntsville has 
also adopted the $25 per ton (annually adjusted by the CPI). In 
addition to the emissions-based fees, the City of Huntsville will 
collect permit application fees. Permit application fees from title V 
sources, as described in Section 3.6 of the City of Huntsville's rules, 
will be used to support the title V program.
    The ADEM and JCDH have also collected early title V fees in 1992, 
1993 and 1994, to develop and start the title V program. Facilities 
under the ADEM and JCDH that paid these initial ramp-up fees will be 
given credit on the amount owed during 1995-1999 until the total credit 
allowed equals the sum of the amount paid in 1992, 1993, and 1994. The 
ADEM and JCDH have demonstrated that the fees collected during 1995-
1999 minus the ramp-up fee credits are sufficient to cover the costs of 
the program. The City of Huntsville has also demonstrated that the fees 
collected will be sufficient to cover the cost of the program.
    The ADEM, JCDH, and City of Huntsville submittals have included an 
initial accounting and description of how required fee revenues are 
used solely to cover the title V program. The EPA has determined that 
their fee demonstrations are adequate and meet the requirements of 40 
CFR 70.9.
4. Provisions Implementing the Requirements of Other Titles of the Act
a. Authority and/or Commitments for Section 112 Implementation
    The ADEM, JCDH, and City of Huntsville have demonstrated in their 
title V program submittals broad legal authority to incorporate into 
permits and enforce all applicable requirements; however, they have 
also indicated that additional regulatory authority may be necessary to 
carry out specific section 112 activities. They have therefore 
supplemented their broad legal authority with a commitment to implement 
any section 112 regulations promulgated by EPA that are Federally 
mandated by the Clean Air Act Amendments of 1990. The EPA has 
determined that this commitment, in conjunction with the State/Local 
broad statutory authority, adequately assures compliance with all 
section 112 requirements. The EPA regards this commitment as an 
acknowledgment by the ADEM, JCDH, and City of Huntsville of their 
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.
    The EPA interprets the above legal authority and commitment to mean 
that the ADEM, JCDH, and City of Huntsville are able to carry out all 
section 112 activities. For further rationale on this interpretation, 
please refer to the Technical Support Documents accompanying this 
proposed interim approval.
b. Implementation of Section 112(g) Upon Program Approval
    The EPA issued an interpretive notice (60 FR 8333) on February 14, 
1995, which outlines a revised interpretation of section 112(g) 
applicability. The notice postpones the effective date of section 
112(g) until after EPA has promulgated a Federal 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 or not to delay the effective date of section 
112(g) 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 EPA provides for such an additional 
postponement of section 112(g), the ADEM, JCDH, and City of Huntsville 
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 State regulations implementing the rule.
    The EPA is aware that the ADEM, JCDH, and City of Huntsville lack a 
program designed specifically to implement section 112(g). However, the 
ADEM, JCDH, and City of Huntsville do have preconstruction review 
programs within their permit rules that can serve as adequate 
implementation vehicles during the transition period. These programs 
would allow the ADEM, JCDH, and City of Huntsville to select control 
measures that would meet the maximum available control technology 
(MACT) standards, as defined in section 112, and incorporate these 
measures into a Federally enforceable preconstruction permit. The EPA 
proposes to approve the use of the ADEM, JCDH, and City of Huntsville 
preconstruction review programs, under the authority of title V and 
part 70, for the purpose of implementing section 112(g) to the extent 
necessary during the transition period between section 112(g) 
promulgation and adoption of State/

[[Page 47527]]
Local rules implementing EPA's section 112(g) regulations. These 
programs are found in Chapter 335-3-14 of the ADEM Regulations, Chapter 
2 of the JCDH Regulations, and Chapter 3.5 of the City of Huntsville 
Regulations. Although section 112(l) provides authority for approval of 
State air regulations that specifically implement section 112(g), the 
direct linkage between the implementation of section 112(g) and title V 
provide for this limited approval by way of the preconstruction review 
programs already in place.
    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 
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 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 General Provisions Subpart A and standards as 
promulgated by EPA as they apply to part 70 sources. Section 112(l)(5) 
and part 70 require that the State's program contain adequate 
authorities, adequate resources for implementation, and an expeditious 
compliance schedule. Therefore, EPA is also proposing to grant approval 
under section 112(l)(5) and 40 CFR 63.91 of the State's program for 
receiving delegation of future section 112 standards and programs that 
are unchanged from the Federal standards as promulgated, and to 
delegate existing standards under 40 CFR parts 61 and 63 for part 70 
and non-part 70 sources.1 The ADEM, JCDH, and City of Huntsville 
have informed EPA that they intend to accept delegation of section 112 
standards and infrastructure programs through adoption by reference. 
The details regarding the use of these delegation mechanisms are set 
forth in a letter dated June 8, 1995, submitted by the ADEM as a title 
V program addendum.

    \1\ The radionuclide National Emission Standards for Hazardous 
Air Pollutants (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 ADEM, JCDH, and City of 
Huntsville in the development of their radionuclide program to 
ensure that permits are issued in a timely manner.
---------------------------------------------------------------------------

d. Commitment To Implement Title IV of the Act
    The ADEM has committed to implement any Acid Rain regulations, 
following promulgation by EPA of regulations implementing sections 407 
and 410 of the Clean Air Act, that are Federally mandated by the Clean 
Air Act Amendments of 1990 through title IV. The ADEM has proposed 
revisions to the ADEM Administrative Code that will incorporate 40 CFR 
Part 72 and Appendices by reference. The State has committed to 
finalize its Acid Rain rules by November 15, 1995. The JCDH and City of 
Huntsville have committed to adopt Local Acid Rain regulations within 
60 days after the ADEM adopts the State rules.
B. Proposed Actions

    The EPA is proposing to grant source category-limited interim 
approval for the ADEM and JCDH operating permits programs, and interim 
approval for the City of Huntsville program. If promulgated, the State 
and Local agencies must make the following changes to their programs to 
receive full approval:
    1. The State statute must be revised to provide adequate criminal 
authority as required by 40 CFR 70.11(a)(3)(ii)-(iii), including 
criminal fines recoverable in a maximum amount of not less than $10,000 
per day per violation.
    2. The ADEM, JCDH, and City of Huntsville must delete ADEM 
Regulation 335-3-16-.04(9)(b), JCDH Regulation 18.4.9(b) and City of 
Huntsville Regulation 3.9.4(b), which state: ``Certification for 
completeness shall not be required for initial applications that will 
not be processed in the first year the regulations in this chapter are 
effective.'' Since applications will be received from all sources by 
the end of the first year following program approval, and these 
applications will meet at least minimal requirements for a completeness 
determination, this regulation is not consistent with 40 CFR Part 70.
    3. The ADEM, JCDH, and City of Huntsville must revise their 
regulations regarding insignificant activities such that (1) emissions 
thresholds for individual activities or units that are exempted will 
not exceed five tons per year for criteria pollutants, and the lesser 
of 1,000 pounds per year or section 112(g) de minimis levels for HAPs, 
(2) their list of insignificant activities is made available for EPA 
and public review and comment each time the list is revised, and (3) 
emissions units with applicable requirements will not be exempted from 
title V permitting requirements or major source applicability 
determinations, even if listed on an approved list of insignificant 
activities.
    4. The ADEM, JCDH, and City of Huntsville programs must be revised 
to provide for operational flexibility in accordance with 40 CFR 
70.4(b)(12)(iii), 70.5(c)(7), and 70.6(a)(10). These rules allow the 
agencies, if requested by permit applicants, to issue permits that 
contain terms and conditions allowing for the trading of emissions 
increases and decreases in permitted facilities.
    5. ADEM Regulation 335-3-16-.04(8)(b)(3), JCDH Regulation 
18.4.8(c)(3), and City of Huntsville Regulation 3.9.3(c)(3) state that 
permit applications shall include ``emission rates of all pollutants in 
tons per year and in such terms as are necessary to establish 
compliance consistent with the applicable standard reference test 
method, or alternative method approved by the Department's Director.'' 
The Regulations must be revised to delete the Department Director's 
discretion in approving alternatives to standard reference test methods 
used in demonstrating compliance with title V permit terms.
    6. The ADEM, JCDH, and City of Huntsville rules define significant 
modifications as modifications under NSPS or NESHAP. In accordance with 
40 CFR 70.7(e)(4)(i), this definition must be modified to include at 
least every significant change in existing monitoring terms or 
conditions and every relaxation of reporting or recordkeeping terms or 
conditions as a significant modification.
    7. For full approval, ADEM Regulation 335-3-16-.13(1)(a)7 (JCDH 
Regulation 18.13.1(a)(7) and City of Huntsville Regulation 
3.9.11(a)(1)(vii)) must be revised to specifically list the types of 
changes that the State proposes to be eligible for processing as 
administrative amendments, thus obtaining the Administrator's approval 
of such changes as part of the State's part 70 program. Also, ADEM 
Regulation 335-3-16-.13(1)(a)6 must be revised to include the EPA and 
affected states review provisions required by 40 CFR 70.7(d)(1)(v).
    This interim approval, which may not be renewed, extends for a 
period of up to two years. During the interim 

[[Page 47528]]
approval period, the State is protected from sanctions for failure to 
have a program, and EPA is not obligated to promulgate a Federal 
permits program in the State. Permits issued under a program with 
interim approval have full standing with respect to part 70, and the 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. The ADEM and JCDH, 
which have requested source category-limited interim approvals as 
discussed below, will have a 5-year time period in which to process 
initial permit applications.
    The ADEM and JCDH have requested source category-limited (SCL) 
interim approval of their part 70 operating permits programs. Although 
the ADEM and JCDH would be required to issue permits within three years 
to all sources subject to the interim approval, some sources would not 
be subject to the requirement to obtain a permit until full approval is 
granted. Part 70 sources not addressed until full program approval is 
granted are also subject to a 3-year time period for processing initial 
permit applications. The 3-year period for these sources would begin on 
the date that full approval of the State or Local program is granted. 
Therefore, initial permitting of all part 70 sources would not be 
completed until five years after interim approval is granted. The City 
of Huntsville did not request SCL interim approval of their part 70 
operating permits program, and will therefore complete initial 
permitting within three years of interim approval.
    The ADEM and JCDH provided the reasons for needing SCL interim 
approval in supplemental materials submitted by the ADEM on March 18, 
1994, and by the JCDH on July 10, 1995. The ADEM and JCDH have a 
variety of large and complex sources such as chemical manufacturing 
plants and pulp and paper facilities. As a result, EPA believes the 
ADEM and JCDH will be unable to issue permits to all part 70 sources 
within three years and that SCL interim approval is warranted for their 
title V programs. For further discussion on EPA's determination, see 
the Technical Support Documents accompanying this approval.
    In published guidance, EPA has acknowledged that SCL interim 
programs that apply to at least 60 percent of all part 70 sources and 
that include sources responsible for at least 80 percent of the 
aggregate emissions from all part 70 sources substantially meet the 
emissions coverage requirements of part 70. The ADEM program submittal 
includes a schedule for permitting 60 percent of all part 70 sources 
within three years of interim program approval. The ADEM has also 
committed to permitting part 70 sources that are responsible for a 
substantial percentage of the State's aggregate emissions in three 
years. In addition, the ADEM has committed to act on all initial permit 
applications by November 15, 2000. The EPA believes that the ADEM 
program has been skillfully designed to utilize available resources in 
an efficient manner and to result in effective permits that are 
Federally enforceable. The EPA is confident that the ADEM will address 
a substantial number of sources in the first three years so as to 
represent a significant portion of the program and, therefore, fully 
meets the intent of part 70 and other program guidance. The JCDH 
program will address 60 percent of their part 70 sources during the 
first three years following SCL interim approval and has also committed 
to permitting part 70 sources that are responsible for a substantial 
percentage of the Local's aggregate emissions during these three years.
    The scope of the ADEM, JCDH, and City of Huntsville part 70 
programs for which EPA proposes interim approval 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 ADEM, JCDH, 
and City of Huntsville for receiving delegation of future section 112 
standards and programs that are unchanged from Federal standards as 
promulgated. In addition, EPA proposes to delegate existing standards 
and 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

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of the submittals and other information relied 
upon for the proposed interim approval are contained in a docket 
maintained at 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 13, 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. 

[[Page 47529]]


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: September 5, 1995.
Patrick M. Tobin,
Acting Regional Administrator.
[FR Doc. 95-22723 Filed 9-12-95; 8:45 am]
BILLING CODE 6560-50-P