[Federal Register Volume 60, Number 209 (Monday, October 30, 1995)]
[Proposed Rules]
[Pages 55231-55237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26856]



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


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5321-9]


Clean Air Act Proposed Interim Approval of Operating Permits 
Program; Maryland

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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

SUMMARY: The EPA proposes interim approval of the operating permits 
program submitted by Maryland. This program was submitted by Maryland 
for the purpose of complying with federal requirements which mandated 
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 
November 29, 1995.

ADDRESSES: Comments should be addressed to Enid Gerena, (3AT23), Air, 
Radiation and Toxics Division, U.S. Environmental Protection Agency, 
Region III, 841 Chestnut Building, Philadelphia, PA 19107.
    Copies of Maryland'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: Air, 
Radiation, and 

[[Page 55232]]
Toxics Division, U.S. Environmental Protection Agency, Region III, 841 
Chestnut Building, Philadelphia, Pennsylvania 19107.

FOR FURTHER INFORMATION CONTACT: Enid A. Gerena (3AT23), Air, 
Radiation, and Toxics Division, U.S. Environmental Protection Agency, 
Region III, 841 Chestnut Building, Philadelphia, PA 19107, (215) 597-
8239.

SUPPLEMENTARY INFORMATION:

I. Background

A. Introduction

    As required under Title V of the Clean Air Act (CAA) as amended 
(1990), EPA has promulgated rules which 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 and require states to develop, and submit to 
EPA, programs for issuing these operating permits to all major 
stationary sources and to certain other sources. Due to pending 
litigation over several aspects of the Part 70 rule which was 
promulgated on July 21, 1992, Part 70 is in the process of being 
revised. When the final revisions to Part 70 are promulgated, the 
requirements of the revised Part 70 will define EPA's criteria for 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 program 
submittals. Until the date which the revisions to Part 70 are 
promulgated, the currently effective July 21, 1992 version of Part 70 
shall be used as the basis for EPA review.

B. Federal Oversight and Sanctions

    The CAA 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 1 year after receiving the submittal. EPA's program 
review occurs pursuant to section 502 of the CAA and the July 21, 1992 
version of Part 70, which together outline the currently applicable 
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 2 years. If EPA has not 
fully approved a program by 2 years after the November 15, 1993 date, 
or by the end of an interim program, EPA must establish and implement a 
federal operating permits program.
    Following final interim approval, if the State of Maryland fails to 
submit a complete corrective program for full approval by 6 months 
before the interim approval expires, EPA would start an 18-month clock 
for mandatory sanctions. If Maryland then failed to submit a complete 
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 CAA. Such sanction would remain in 
effect until EPA determined that Maryland had corrected the deficiency 
by submitting a complete corrective program. Moreover, if the 
Administrator found a lack of good faith on the part of Maryland, both 
sanctions under section 179(b) would apply after the expiration of the 
18-month period until the Administrator determined that Maryland had 
come into compliance. In any case, if, six months after application of 
the first sanction, Maryland still had not submitted a corrective 
program that EPA found complete, a second sanction would be required.
    If, following final interim approval, EPA disapproved Maryland'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 Maryland had submitted a 
revised program and EPA had determined that this program corrected the 
deficiencies that prompted the disapproval. Moreover, if the 
Administrator found a lack of good faith on the part of Maryland, both 
sanctions under section 179(b) would apply after the expiration of the 
18-month period until the Administrator determined that Maryland had 
come into compliance. In all cases, if, six months after EPA applied 
the first sanction, Maryland had not submitted a revised program that 
EPA had determined corrected the deficiencies that prompted the 
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 Maryland has 
not timely submitted a complete corrective program or EPA has 
disapproved a submitted corrective program. Moreover, if EPA has not 
granted full approval to a Maryland program by the expiration of an 
interim approval period, EPA must promulgate, administer and enforce a 
federal operating permits program for Maryland upon the date the 
interim approval period expires.

C. State of Maryland's Submittal

    On May 9, 1995, Maryland submitted an operating permits program for 
review by EPA. The submittal was supplemented by additional materials 
on June 9, 1995, and was found to be administratively complete pursuant 
to 40 CFR 70.4(e)(1). The submittal includes the following components: 
transmittal letter; description of Maryland's Title V operating permits 
program; state regulations; Attorney General's legal opinion; workload 
analysis, permit fee demonstration; permitting program documentation, 
and additional information (i.e., transition plan, data management, 
compliance tracking and enforcement description).

II. Summary and Analysis of Maryland's Submittal

    The analysis contained in this notice focuses on the major portions 
of Maryland's operating permits program submittal: regulations and 
program implementation, fees, support materials, and provisions 
implementing the requirements of Titles III and IV of the CAA. 
Specifically, this notice addresses the deficiencies in Maryland's 
submittal which will need to be corrected to fully meet the 
requirements of the July 21, 1992 version of Part 70. These 
deficiencies as well as other issues related to Maryland's operating 
permits program are discussed in detail in the Technical Support 
Document (TSD). The full program submittal and the TSD are available 
for review as part of the public docket. The docket may be viewed 
during regular business hours at the EPA Region III office listed in 
the ADDRESSES section of this notice.

A. Regulations and Program Implementation

    Maryland's operating permits program is primarily defined by 
regulations adopted as Code of Maryland Regulations (COMAR), Title 26, 
Subtitle 11. The specific regulations being adopted to implement the 
Part 70 requirements will appear at COMAR Sec. 26.11.02 (Permits, 
Approvals, and Registration) and COMAR Sec. 26.11.03 (Permits, 
Approvals, and Registration--Part 70 Permits). Provisions for 
enforcement authority are located in COMAR Sec. 26.11.02.05. Maryland 
submitted a list identifying ``Title V'' and ``Non-Title V'' provisions 
of its regulations. This list is provided in the TSD. In today's 
proposal, EPA is taking action only on the Title V portions of 
Maryland's submittal.

[[Page 55233]]

    During the review of Maryland's regulations, EPA identified several 
instances of vague language, misreferences, typographical errors, and 
errors of omission in the regulatory language. The provisions in which 
these errors occur are identified in the TSD and must be interpreted as 
if written correctly to fully meet the requirements of Part 70. The 
following analysis of Maryland's operating permit regulations 
corresponds directly with the format and structure of Part 70.

Section 70.4  State Program Submittals and Transition

    Maryland's regulations substantially meet the requirements of 40 
CFR 70.4 for the State program submittal. For consistency with section 
502(b)(6) of the Clean Air Act and 40 CFR 70.4(b)(3)(x), Maryland must 
address the following issue on standing for judicial review and the 
following changes must be made in order to fully meet the requirements 
of 40 CFR 70.4:
    1. The Attorney General of Maryland, in his opinion dated June 9, 
1995, states that ``the laws of Maryland provide adequate authority to 
carry out the program submitted on May 9, 1995 by the Maryland 
Department of the Environment (the Department) to the U.S Environmental 
Protection Agency for approval to administer and enforce the operating 
permit program under Title V of the CAA and 40 CFR Part 70 (the Part 70 
program).'' Section 502(b)(6) of the CAA and 40 CFR 70.4(b)(3)(x) 
require that the program provide standing for judicial review of a 
permit action to THE PERMIT APPLICANT, any person who participated in 
the public comment process and any other person who could obtain 
judicial review of that action under applicable law. EPA interprets 
section 502(b)(6) of the CAA and part 70 as requiring that approvable 
state title V permits programs must provide judicial review to any 
party who participated in the public comment process and who meets the 
threshold requirements of Article III of the U.S. Constitution for 
standing in federal courts.
    The Attorney General cites the Maryland Environmental Standing Act 
(MESA), Md. Nat. Res. Code Ann. Secs. 1-501 to 1-508 (1990), as the 
primary avenue for third parties to obtain judicial review of the 
Department's issuance of a Part 70 permit. The Attorney General 
interprets MESA to provide standing to challenge permit issuance in 
actions for mandamus or equitable relief (including declaratory relief) 
to several categories of persons. Those categories are: (1) The state, 
(2) any political subdivision of the state, and (3) any other person, 
regardless of whether that person possesses a special interest 
different from that possessed generally by the residents of Maryland or 
whether substantial personal or property damage to that person is 
threatened. The Attorney General recognizes that MESA does not provide 
standing for a direct judicial review of permit actions under 
Maryland's Administrative Procedure Act (APA), Md. State Gov't Code 
Ann. Sec. 10-201 (1990). Nonetheless, it appears that review of 
essentially equivalent scope as direct judicial review is available 
under MESA. The Attorney General notes that the Maryland Supreme Court 
has stated that an administrative proceeding such as permit issuance or 
denial, even if not subject to direct review under the APA, would be 
subject to judicial review of essentially the same scope in an action 
for mandamus or equitable relief (including certiorari, injunction, or 
declaratory judgment).
    For purposes of MESA, the term ``person'' includes any resident of 
Maryland, any Maryland corporation, and any partnership, organization, 
association or legal entity doing business in the state. Parties not 
falling within this definition of ``person'' (for example, individuals 
living in an adjacent state but near a Maryland source, or an 
organization not doing business in Maryland) can not take advantage of 
the standing provisions of MESA. Instead, those parties are required to 
establish standing for judicial review under the Maryland common law of 
standing. Under Maryland common law, in order to establish standing, a 
party must demonstrate it has a ``specific interest or property right'' 
such that the party will suffer harm that is different in kind from 
that suffered by the general public. There are no reported cases in 
Maryland that would preclude a non-economic interest (such as a 
recreational, conservational or aesthetic interest) from constituting 
the type of specific interest needed for standing. If a Maryland 
judicial decision having precedential effect is issued in the future 
limiting the special interest required for standing to economic 
interests, then the Maryland standing requirements would become more 
stringent than Article III standing requirements. In that event, EPA 
will take appropriate action under 40 CFR 70.11(c).
    With respect to organizations not doing business in Maryland, the 
Maryland standing requirements are somewhat less favorable than the 
standing requirements of Article III of the U.S. Constitution. The 
federal courts interpret Article III to provide standing for 
organizations in actions brought to protect the interests of its 
members, provided certain conditions are met. See Chesapeake Bay 
Foundation v. Bethlehem Steel Corp., 608 F.Supp. 440 (D. Md. 1985). 
Under Maryland common law of standing, an organization must have an 
interest of its own, separate and distinct from that of its individual 
members, in order to establish standing. Medical Waste Associates, Inc. 
v. Maryland Waste Coalition, 327 Md. 596 (1992). However, the Maryland 
Attorney General notes that if at least one plaintiff in an action for 
review of a permit establishes standing, the Maryland courts will not 
ordinarily inquire as to whether other plaintiffs have standing. 
Therefore, an organization doing business outside of Maryland may be 
able to participate in a permit challenge on behalf of its individual 
members if other parties having the requisite standing also join as 
plaintiffs in the action. (Of course, organizations doing business in 
Maryland can establish standing under MESA, as discussed above.)
    MESA must be amended to accord non-state residents and 
organizations not doing business in Maryland the same standing to 
challenge Part 70 permit decisions as other ``persons'' as defined in 
MESA, or, in the alternative, other appropriate legislative action must 
be taken to ensure that standing requirements for such organizations 
are not more restrictive than the minimum requirements of Article III 
of the U.S. Constitution as they apply to federal courts. A 
straightforward approach Maryland could take to resolving this issue 
would be to amend its state APA to directly provide for the opportunity 
for judicial review of permit actions in state court, consistent with 
CAA section 502(b)(6) and 40 CFR 70.4(b)(3)(x); this would avoid the 
risk of any future Maryland judicial decision interpreting MESA or 
Maryland's common law of standing potentially compromising Maryland's 
Part 70 approval status.

Section 70.5  Permit Applications

    Maryland's regulations substantially meet the requirements of 40 
CFR 70.5 for permit applications. The following changes must be made in 
order to fully meet the requirements of 40 CFR 70.5:
    1. COMAR Sec. 26.11.03.04 lists 17 types of emission units and 
activities that are exempt from being included in the Part 70 permit 
application. 40 CFR 70.5(c) allows EPA to approve a list of 
insignificant activities or emissions levels which need not be included 
in permit applications; however, the State must identify such emissions 
levels or 

[[Page 55234]]
insignificant activities based on size, emission rate or production 
rate. Maryland must make three changes to COMAR Sec. 26.11.03.04 in 
order to meet the requirements of 40 CFR 70.5(c):
    a. As part of the list of emission units and activities exempt from 
the Part 70 permit application, COMAR Sec. 26.11.03.04 A(18) lists 
``any other emission unit that is not subject to an applicable 
requirement of the Clean Air Act.'' Part 70 does not allow such a broad 
exemption of emission units from the permit application requirements. 
40 CFR 70.5(c)(3)(i) requires that a permit application describe all 
emissions of regulated air pollutants from any emissions unit, except 
where such units are exempted as part of a list of insignificant 
activities or emission levels. Insignificant activities or emissions 
levels must be clearly identified and established based on a 
justifiable limitation, such as a size or emissions threshold.
    b. Maryland must revise COMAR Sec. 26.11.03.04 B to provide that a 
permit applicant shall not omit information needed to determine the 
applicability of, or to impose, any applicable requirement, consistent 
with 40 CFR 70.5(c).
    c. Maryland must revise COMAR Sec. 26.11.03.04 A(2) to clarify the 
exemption for boilers used exclusively to operate steam engines for 
farm and domestic use. This exemption must be modified to impose a 
justifiable and objective emission limit, heat content limit, or size 
limitation to restrict this exemption to insignificant activities. 
Maryland must also provide enough information to identify the activity 
and/or unit qualifying for an exemption.

Section 70.7  Permit Issuance, Renewal, Reopenings, and Revisions

    Maryland's regulations substantially meet the requirements of 40 
CFR 70.7 for permit issuance, renewal, reopenings, and revisions. The 
following changes must be made in order to fully meet the requirements 
of 40 CFR 70.7:
    1. COMAR Sec. 26.11.03.21 A provides that general permits will be 
issued after notice and opportunity for public comment and hearing as 
required by the rule making provisions of the Administrative Procedure 
Act (APA), State Government Article Sec. 10-101 et seq., Annotated Code 
of Maryland, and Environmental Article Sec. 2-301, Annotated Code of 
Maryland. While the APA and Sec. 2-301 and Sec. 2-303 of the 
Environmental Article provide adequate public notice and comment 
provisions, they do not provide all necessary permit issuance 
procedures required by 40 CFR 70.7(h). COMAR Sec. 26.11.03.21 A also 
states that any general permit shall comply with all requirements 
applicable to other Part 70 permits.
    It is not clear, however, whether this provision applies to the 
issuance of general permits. Maryland's provisions for issuance of Part 
70 permits (COMAR Secs. 26.11.03.07-.09) are adequate, but the 
regulations do not specifically state whether they apply to general 
permits. Specifically, Maryland must require that the procedures for 
issuing general permits include notice and opportunity for 
participation by affected states consistent with 40 CFR 70.7(h)(3) and 
70.8 (COMAR Sec. 26.11.03.08) and a 45-day EPA review period, 
consistent with 70.8(a) and (c) (COMAR Sec. 26.11.03.09). Further, 
Maryland must keep a record of public commenters and issues raised 
during the public participation process so that EPA may fulfill its 
obligation under section 505(b)(2) of the Act to determine whether a 
citizen petition may be granted (COMAR Sec. 26.11.03.07(G)). EPA 
recommends that Maryland clarify that these provisions apply to the 
issuance of general permits by citing in COMAR Sec. 26.11.03.21 A the 
appropriate sections of Maryland's regulations.
    2. The procedures for revising a general permit under COMAR 
Secs. 26.11.03.21 J and L must be changed to meet the requirements of 
40 CFR 70.7(e) regarding permit revision procedures. COMAR 
Sec. 26.11.03.21 J allows the Department to revise or repeal a general 
permit using the procedures that are appropriate to the particular 
permit. COMAR Sec. 26.11.03.21 L states that the revision procedures 
set forth in Maryland's regulations do not apply to a general permit, 
except as provided in the general permit. These sections are 
inconsistent with Part 70 because they give the Department discretion 
to determine the appropriate procedures that should be followed to 
revise a general permit. Under 40 CFR 70.7(e)(1), the permitting 
authority is required to provide procedures for permit modifications 
that provide a level of public participation and review by the 
permitting authority, EPA and affected states that is at least equal to 
that provided in Part 70. Therefore, if the Department proposes a 
significant change in the general permit's terms and conditions, such 
as a relaxation of reporting requirements or an increase in the 
applicable emissions limit, the general permit would need to be revised 
according to procedures for a significant permit modification, 
including a 30 day public comment period, an opportunity for a public 
hearing, and review by EPA and affected states. Those proposed 
revisions to the general permit that meet the criteria for 
administrative permit amendments or minor permit modifications could be 
processed using procedures consistent with 40 CFR 70.7(d) and 
Sec. 70.7(e)(2), respectively. It should be made clear that the general 
permit cannot be modified for individual sources; rather, each source 
that applies for and is granted approval to operate under the general 
permit must adhere to the same permit terms and conditions. If the 
Department determines that a revision to the general permit is 
necessary, it must revise the permit using procedures consistent with 
40 CFR 70.7, as described above.
    3. Maryland's requirements for permit reopenings, including COMAR 
Secs. 26.11.03.07 A(2), 26.11.03.08 A and 26.11.03.20 C (4), (5) and 
(6), provide the State discretion to follow procedures other than the 
procedures for permit issuance. Maryland's COMAR Sec. 26.11.03.20 C(4) 
states that ``the procedures that the Department specifies to be 
followed if a permit is reopened shall be based on the Department's 
determination as to what type of change to the permitted source is 
likely to result from reopening the permit, using Regulations 
[26.11.03] .14-.17 [pertaining to permit revisions] of this chapter as 
guidance.'' By contrast, 40 CFR 70.7(f)(2) requires that procedures to 
reopen and issue a permit shall follow the same procedures as apply to 
initial permit issuance. Maryland's provisions for permit reopening 
procedures are inconsistent with Part 70. However, future revisions to 
Part 70 may provide flexibility in the procedures that States must use 
to reopen permits. On August 31, 1995, EPA proposed revisions to Part 
70 that would streamline the procedures for revising Title V operating 
permits. (See 60 FR 45530.)
    4. COMAR Sec. 26.11.03.17 F provides that a permittee shall submit 
an application for a significant permit modification not later than 12 
months after commencing operation of the changed source unless the 
change is prohibited by the Part 70 permit. This provision is 
inconsistent with 40 CFR 70.7(e)(4), which does not allow a source to 
make a significant permit modification prior to receiving a revised 
permit from the permitting authority. A significant permit modification 
is a change that does not qualify as an administrative permit amendment 
or a minor permit modification. Significant modifications include 
relaxations in monitoring, reporting, or recordkeeping. By allowing a 
source to submit its permit application 12 months after making a 
change, COMAR Sec. 26.11.03.17 

[[Page 55235]]
F is less stringent than 40 CFR 70.7(e)(4) and allows a source even 
more leniency in making a significant change than for making minor 
permit modifications or administrative permit amendments. This is 
clearly not the intent of the significant permit modification 
provisions of 40 CFR 70.7(e)(4). Future revisions to Part 70, as 
described above, may provide flexibility in the procedures that States 
must use to process permit revisions.
    5. COMAR Sec. 26.11.03.14 C allows the Department to approve 
changes to compliance plans or schedules as part of an administrative 
permit amendment or minor permit modification. This provision is less 
stringent than 40 CFR 70.7 because the relaxation of a compliance plan 
or schedule is a significant change that should be processed as a 
significant permit modification. Future revisions to Part 70, as 
described above, may provide flexibility in the procedures that States 
must use to revise permits.
    6. COMAR Sec. 26.11.03.15 B(7) contains the following sentence: 
``Notwithstanding Sec. [26.11.03.15] B(1)-(6) [pertaining to 
administrative permit amendments] of this regulation, for purposes of 
the acid rain portion of a Part 70 permit is governed by regulations 
promulgated under Title IV of the Clean Air Act.'' This sentence 
apparently was written in error. EPA assumes that this sentence is 
meant to reflect the provisions of 40 CFR 70.7(e), which states that a 
permit modification (other than an administrative permit amendment) for 
purposes of the acid rain portion of the permit shall be governed by 
regulations promulgated under Title IV of the Clean Air Act. Maryland 
must correct the wording of COMAR Sec. 26.11.03.15 B(7).

Section 70.8  Permit Review By EPA and Affected States

    Maryland's regulations substantially meet the requirements of 40 
CFR 70.8 for permit review by EPA and affected states. The following 
changes must be made in order to fully meet the requirements of 40 CFR 
70.8:
    1. COMAR Sec. 26.11.03 appears to allow the Department to make 
changes in a final permit after EPA has completed its review of the 
permit. For example, COMAR Sec. 26.11.03.11 includes provisions for 
implementing changes to a final permit subsequent to a contested case 
hearing and the issuance of a proposed decision by an Administrative 
Law Judge (ALJ). On the basis of past experience with other air quality 
control programs, Maryland believes that it will be an extremely rare 
occasion when an applicant seeks such a hearing. In the event that such 
proceeding does occur, COMAR Sec. 26.11.03.11 affords EPA the 
opportunity to participate in the hearing. In the event that EPA does 
not participate, COMAR Sec. 26.11.03.11 affords EPA a thirty (30) day 
opportunity to comment on the proposed decision of the ALJ prior to the 
Department's issuance of a final decision in the matter. However, in 
the event that the Department thereafter issues a final decision which 
modifies or changes conditions in the final permit, federal and state 
requirements (the Clean Air Act, 40 CFR 70.8 and COMAR 
Sec. 26.11.03.09) should be read as requiring the Department to provide 
EPA with an additional (45 day) period in which to review and comment 
on the final permit. Maryland must revise its Attorney General's 
Opinion to acknowledge that in the event the Department implements 
changes to any final permit, EPA will have an additional (45 day) 
period to review and comment on the final permit, as revised by the 
Department.

B. Variances

    Maryland Environmental Article sections 2-501, 606, 610(c), 611, 
and 613 are cited by the Department as variance provisions which 
authorize the Department to deviate from certain applicable 
requirements within and outside the permitting process. EPA has no 
authority to approve provisions of State law, such as the variance 
provisions referred to in these sections, which are inconsistent with 
the CAA. 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. 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.

C. Permit Fee Demonstration

    COMAR Sec. 26.11.02.19(A) states that owners or operators of Part 
70 sources will be required to pay an annual fee consisting of a base 
fee of two hundred dollars ($200) plus an emissions-based fee for each 
ton of regulated emissions. Beginning in January 1, 1996, the fee rate 
will be twenty-five dollars per ton ($25) of regulated emissions. On 
January 1, 1997, this annual fee will be adjusted by the Consumer Price 
Index (CPI). Fee revenues received from Part 70 facilities will be 
placed in a segregated portion of the Department's Air and Radiation 
Management Administration budget. Surplus funds from any prior year of 
the program will be carried over to the following year to be used 
solely for Part 70 permitting activity.
    Only program-related fees from facilities subject to Part 70 
applicability will be used to fund the program. Maryland's fee 
calculation, based upon recent (September 1994) emissions inventory 
data, shows that revenues will be able to cover the estimated costs of 
the program. In chapter IV of the submittal entitled, ``Workload 
Analysis and Fee Demonstration'', Maryland estimates revenues and costs 
associated with the implementation of its operating permits program. 
The Air and Radiation Management Administration proposes an accounting 
method whereby Part 70 program activities performed by technical 
personnel in the Air Quality Permits and Compliance Program will be 
coded directly to specified Part 70 program cost accounts. In the 
submittal, Maryland stated that in the event of a temporary shortfall 
of revenues, the Department will have the option to prorate fees 
collected from facilities with Phase I units (acid rain) so as to allow 
fees from non-Phase I units at these sites to be used for Part 70 
activities. According to 40 CFR 70.9(b)(3), the permitting authority is 
allowed to calculate fees on any particular basis or in the same manner 
for all Part 70 sources, or all regulated air pollutants, provided that 
the state collects a total amount of fees sufficient to meet the 
program. Maryland meets the requirements of 40 CFR 70.9(b)(3). However, 
it will be necessary for the State to demonstrate how these revenues 
will be prorated. EPA recommends that Maryland establish an account 
tracking system that will distinguish between revenues and expenditures 
attributable to Phase I from non-Phase I units. The estimates of 
revenues from the authorized collection of emission-based fees reveal 
that Maryland's program will have adequate funding to cover the direct 
and indirect costs of implementing the permit program during each of 
the first four years.

D. Provisions Implementing the Requirements of Title III Implementing 
Title III Standards Through Title V Permits

    Maryland's regulations provide general authority to administer and 
enforce the requirements of the Clean Air Act regarding hazardous air 
pollutants, and thus generally meet the requirements of 40 CFR 70.3 
(a)-(b). The following issue must be addressed in order to fully meet 
the requirements of 40 CFR 70.3 (a)-(b). 

[[Page 55236]]

    1. In its May 9, 1995 submittal, Maryland advised EPA that it was 
not seeking full Part 70 program approval regarding hazardous air 
pollutants, but was considering whether to request EPA approval of its 
existing air toxics program (COMAR Sec. 26.11.15) under Subpart E of 40 
CFR Part 63. As a result, the Attorney General did not review the 
State's Part 70 program regarding current federal requirements for 
hazardous air pollutants. Maryland must resolve the issue of how it 
will address the CAA's section 112 applicable requirements and revise 
its Attorney General's opinion to include a detailed review of the 
State's Part 70 program regarding current federal requirements for 
hazardous air pollutants.
    Under Environment Article, Title 2, of the Annotated Code of 
Maryland and COMAR Sec. 26.11.03.06 A(1), Maryland, in its Title V 
program submittal, has demonstrated broad legal authority to 
incorporate all applicable requirements into permits and to enforce its 
permit requirements. In its May 9, 1995 submittal, Maryland indicated 
that the Part 70 permits will be the mechanism to implement mandatory 
Section 112 requirements and that other federally-enforceable 
mechanisms may be used to carry out specific CAA section 112 activities 
but only if approved by EPA. EPA regards this commitment as an 
obligation to obtain further legal authority as needed to issue permits 
that assure compliance with the CAA's section 112 applicable 
requirements.
    For a further discussion in support of this interpretation, please 
refer to the TSD accompanying this rulemaking, which is located in the 
public docket, and the April 13, 1993 guidance memorandum entitled 
``Title V Program Approval Criteria for Section 112 Activities,'' 
signed by John Seitz, Director, Office of Air Quality Planning and 
Standards, Office of Air and Radiation, USEPA.
Implementation of 112(g) Upon Program Approval
    EPA is proposing to approve Maryland's operating permits program 
for the purpose of implementing CAA section 112(g) during the 
transition period between federal promulgation of a section 112(g) rule 
and Maryland's adoption of section 112(g) implementing regulations. 
Until recently, EPA had interpreted the CAA to require sources to 
comply with section 112(g) beginning on the date of approval of the 
Title V program regardless of whether EPA had completed its section 
112(g) rulemaking. EPA has since revised this interpretation of the CAA 
as described in a February 14, 1995 Federal Register notice (see 60 FR 
83333). The revised interpretation postpones the effective date of 
section 112(g) until after EPA has promulgated a rule addressing that 
provision. The rationale for the revised interpretation is set forth in 
detail in the February 14, 1995 interpretive notice.
    The section 112(g) interpretive notice explains that EPA is still 
considering whether the effective date of section 112(g) should be 
delayed beyond the date of promulgation of the federal rule 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), Maryland must be able to implement 
section 112(g) during the transition period between promulgation of the 
federal section 112(g) rule and adoption of implementing Maryland 
regulations.
    EPA believes that, although Maryland currently lacks a program 
designed specifically to implement section 112(g), Maryland's Title V 
operating permits program will serve as an adequate implementation 
vehicle during the transition period because the program will allow 
Maryland to select control measures that would meet Maximum Achievable 
Control Technology (MACT) on a case-by-case basis, as defined in 
section 112, and incorporate these measures into federally enforceable 
source-specific permits.
    This proposed approval clarifies that Maryland's operating permits 
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 Maryland of rules established to implement section 
112(g). EPA is proposing to limit the duration of this approval to an 
outer limit of 18 months following EPA's promulgation of the section 
112(g) rule. Comment is solicited on whether 18 months is an 
appropriate period taking into consideration the State's procedures for 
adoption of regulations. However, since this proposed 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 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.
    Although section 112(l) generally provides the authority for 
approval of state air toxics programs, Title V and section 112(g) 
provide authority for this limited approval because of the direct 
linkage between implementation of section 112(g) and Title V.
    If Maryland does not wish to implement section 112(g) through the 
proposed mechanisms discussed above and can demonstrate that an 
alternative means of implementing section 112(g) exists during the 
transition period, EPA may, in the final action approving Maryland's 
Part 70 program, approve such alternative.
Program for Straight Delegation of Section 112 Standards
    As previously noted, Maryland has advised EPA that it currently is 
not seeking full Part 70 program approval regarding hazardous air 
pollutants, but is considering a request for approval of its existing 
air toxics program (COMAR Sec. 26.11.15) under Subpart E of 40 CFR Part 
63. However, prior to receiving EPA approval of its existing air toxics 
program, Maryland must agree that the requirements specified in 40 CFR 
70.4(b), encompass section 112(l)(5) requirements for a program for 
delegation of unchanged section 112 standards. Section 112(l)(5) 
requires state programs to contain adequate authorities and resources 
for implementation, and an expeditious compliance schedule, which are 
also requirements under Part 70. Prior to a decision by EPA regarding 
approval of its existing air toxics program, EPA proposes to grant 
approval under section 112(l)(5) and 40 CFR 63.91 of Maryland's program 
for receiving delegation of section 112 standards that are unchanged 
from the federal standards as promulgated. For EPA-promulgated rules 
which are applicable to sources in the State, the State intends to 
request delegation after adopting the rules. The details of this 
delegation mechanism will be established prior to delegating any 
section 112 standards. This program applies to both existing and future 
standards but is limited to sources covered by the Part 70 program.

E. Title IV Provisions/Commitments

    As part of the May 9, 1995 program submittal, Maryland committed to 
submit all missing portions of the Title IV acid rain program by 
November 15, 1995, including its State acid rain regulations.

III. Request for Public Comments

    EPA is soliciting public comments on the issues discussed in this 
notice or on other relevant matters. These comments will be considered 
before taking final action. Interested parties may participate in this 
federal rulemaking action by submitting written comments 

[[Page 55237]]
to the EPA Regional office listed in the ADDRESSES section of this 
notice.

Proposed Action

    EPA is proposing to grant interim approval of the operating permits 
program submitted by Maryland on May 9, 1995, and the Attorney 
General's Legal Opinion submitted on June 9, 1995. The scope of 
Maryland's Part 70 program applies to all Part 70 sources (as defined 
in the program) within Maryland, except for 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 
CAA as ``any 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.'' See section 302(r) of the 
CAA; see also 59 FR 43956, 43962 (Aug. 25. 1994); 58 FR 54364 (Oct. 21, 
1993). Prior to full approval by EPA, Maryland must make the following 
changes:
    1. The Maryland Environmental Standing Act (MESA) must be amended 
to accord non-state residents and organizations not doing business in 
Maryland the same standing to challenge Part 70 permit decisions as 
other ``persons'' as defined in MESA, or, in the alternative, other 
appropriate legislative action must be taken to ensure that standing 
requirements for such organizations are not more restrictive than the 
minimum requirements of Article III of the U.S. Constitution as they 
apply to federal courts.
    2. Revise the provisions for insignificant activities under COMAR 
Sec. 26.11.03.04 as follows, to achieve consistency with the 
requirements of 40 CFR 70.5(c):
    a. Remove the exemption for ``any other emission unit that is not 
subject to an applicable requirement of the Clean Air Act'' under COMAR 
Sec. 26.11.03.04 A(18).
    b. Revise COMAR Sec. 26.11.03.04 B to provide that a permit 
applicant shall not omit information needed to determine the 
applicability of, or to impose, any applicable requirement.
    c. Revise COMAR Sec. 26.11.03.04 A(2) to add a justifiable 
limitation on the exemption for boilers used exclusively to operate 
steam engines for farm and domestic use.
    3. Revise COMAR Sec. 26.11.03.21 to clarify that the procedures for 
issuing general permits must include affected state and EPA review, and 
that the state must keep a record of the public commenters and issues 
raised during the public participation process, consistent with 40 CFR 
70.7(h) and 70.8.
    4. Revise COMAR Secs. 26.11.03.21 J and L to require that general 
permits are revised according to procedures consistent with 40 CFR 
70.7(e).
    5. Revise COMAR Secs. 26.11.03.07 A(2), 26.11.03.08 A, and 
26.11.03.20 C (4), (5) and (6) to provide that the procedures for 
initial permit issuance also must be followed for permit reopenings, to 
achieve consistency with the requirements of 40 CFR 70.7(f)(2).
    6. Remove subsection F of COMAR Sec. 26.11.03.17, which 
impermissibly allows sources to submit a permit application within 12 
months after making a significant permit modification.
    7. Revise COMAR Sec. 26.11.03.14 C to require that any relaxation 
of a compliance plan or schedule will be processed as a significant 
permit modification, consistent with 40 CFR 70.7(e)(4).
    8. Revise the wording of COMAR Sec. 26.11.03.15 B(7), pertaining to 
permit modifications for acid rain permits, consistent with 40 CFR 
70.7(e).
    9. Amend the Attorney General's Opinion to clarify that if the 
Department proposes to change a final permit as a result of a contested 
case decision by an Administrative Law Judge and pursuant to COMAR 
Sec. 26.11.03.11, the Department will revoke the final permit and 
reissue it with the proposed changes so as to provide EPA with the (45 
day) review and comment period required pursuant to the CAA, 40 CFR 
70.8 and COMAR Sec. 26.11.03.09.
    10. Revise the Attorney General's Opinion to include a detailed 
review of the State's Part 70 program regarding current federal 
requirements for hazardous air pollutants.
    This interim approval, which may not be renewed, extends for a 
period of up to 2 years. During the interim approval period, Maryland 
is protected from sanctions for failure to have a fully approved Title 
V, Part 70 program, and EPA is not obligated to promulgate a federal 
permits program in Maryland. 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.
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
the CAA's section 112(l)(5) requirements for approval of a program for 
delegation of section 112 standards applicable to Part 70 sources as 
promulgated by EPA. Section 112(l)(5) requires that the State's program 
contain adequate authorities, adequate resources for implementation, 
and an expeditious compliance schedule, which are also requirements 
under Part 70. Therefore, EPA is also proposing under section 112(l)(5) 
and 40 CFR 63.91 to grant approval of Maryland'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.
    The Office of Management and Budget has exempted this action from 
Executive Order 12866 review.
    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 to 
propose interim approval of Maryland's operating permits program 
pursuant to Title V of the CAA and 40 CFR Part 70 does not impose any 
new requirements, it does not have a significant impact on a 
substantial number of small entities.

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: October 20, 1995.
W. Michael McCabe,
Regional Administrator.
[FR Doc. 95-26856 Filed 10-27-95; 8:45 am]
BILLING CODE 6560-50-P