[Federal Register Volume 60, Number 216 (Wednesday, November 8, 1995)]
[Proposed Rules]
[Pages 56285-56289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27698]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[TN-CHAT-95-01; FRL-5328-1]


Clean Air Act Proposed Approval or, in the Alternative, Proposed 
Interim Approval of Operating Permits Program; Hamilton County, 
Tennessee

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed approval.

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SUMMARY: EPA proposes full approval of the operating permit program 
submitted by the State of Tennessee on behalf of the Chattanooga-
Hamilton County Air Pollution Control Bureau (``CHCAPCB'' or ``the 
County'') if certain changes are made prior to final EPA action on this 
program. Alternatively, EPA proposes to grant interim approval if the 
necessary changes are not made. CHCAPCB's operating permit program was 
submitted 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 in the state.

DATES: Comments on this proposed action must be received in writing by 
December 8, 1995.

ADDRESSES: Written comments on this action should be addressed to Carla 
E. Pierce, Chief, Air Toxics Unit/Title V Program Development Team, Air 
Programs Branch, at the EPA Region 4 office listed below. Copies of 
CHCAPCB's submittal and other supporting information used in developing 
the proposed full/interim approval are available for inspection during 
normal business hours at the following location: U.S. Environmental 
Protection Agency, Region 4, third floor, 345 Courtland Street NE, 
Atlanta, GA 30365.

FOR FURTHER INFORMATION CONTACT: Kelly Fortin, Title V Program 
Development Team, Air Programs Branch, Air Pesticides & Toxics 
Management Division, U.S. Environmental Protection Agency, Region 4, 
345 Courtland Street NE, Atlanta, GA 30365, (404) 347-3555, Ext. 4223.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the Clean Air Act (``the Act'') as 
amended by the 1990 Clean Air Act Amendments, EPA promulgated rules on 
July 21, 1992 (57 FR 32250) that define the minimum elements of an 
approvable state operating permit program and the corresponding 
standards and procedures by which EPA will approve, oversee, and 
withdraw approval of state and local operating permit programs. These 
rules are codified at 40 Code of Federal Regulations (CFR) part 70. 
Title V and part 70 require that states develop, and submit to EPA, 
programs for issuing operating permits to all major stationary sources 
and to certain other sources.
    The Act requires states to develop and submit these programs to EPA 
by November 15, 1993, and EPA to approve to disapprove each program 
within one year after receiving the submittal. If the state's 
submission is materially changed 

[[Page 56286]]
during the one-year review period, 40 CFR 70.4(e)(2) allows EPA to 
extend the review period for no more than one year following receipt of 
the additional materials.
    EPA reviews state operating permit programs pursuant to section 502 
of the Act and 40 CFR part 70, which together outline criteria for 
approval or disapproval. Where a program substantially, but not fully, 
meets the requirements of part 70, EPA may grant the program interim 
approval for a period of up to two years. If EPA has not fully approved 
a program by November 15, 1995, or by the end of an interim program, it 
must establish and implement a Federal operating permit program.

II. Proposed Action and Implications

A. Analysis of State Submission

    EPA has concluded that the operating permit program submitted by 
the State of Tennessee on behalf of the Chattanooga-Hamilton County Air 
Pollution Control Board substantially meets the requirements of title V 
and part 70, and proposes to grant interim approval to the program or, 
in the alternative, to grant full approval to the program if specified 
changes are made, as will be discussed below. 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 Act, each state must develop and 
submit to the Administrator an operating permit program under state or 
local law or under an interstate compact meeting the requirements of 
title V of the Act. On November 22, 1993, EPA received the title V 
operating permit program submitted by the State of Tennessee on behalf 
of the Chattanooga-Hamilton County Air Pollution Control Board. The 
State of Tennessee Department of Environment and Conservation 
requested, under signature of the Tennessee Governor's designee, 
approval of the CHCAPCB's operating permit program. The State 
supplemented the program submittal, on behalf of the County, on January 
23, 1995, February 24, 1995, and October 13, 1995.
    The program submittal includes a legal opinion from independent 
legal council for the Chattanooga-Hamilton County Air Pollution Control 
Board demonstrating adequate legal authority for the implementation and 
enforcement of the local part 70 program. The program submittal 
contains a description of how the CHCAPCB intends to implement the 
program consistent with the requirements of the Clean Air Act 
Amendments of 1990 (42 U.S.C. 7401-7671q) and 40 CFR part 70. The 
program submittal also includes supporting documentation, such as 
evidence of the procedurally correct adoption of the permitting rules, 
permit application forms, and a detailed enforcement agreement with 
EPA. The submittal was determined to be administratively complete on 
January 24, 1995.
2. Regulations and Program Implementation
    The Chattanooga-Hamilton County Air Pollution Control Board, 
operating under a certificate of exemption pursuant to Tennessee Code 
Annotated, Section 68-201-115, has authority to administer the 
operating permits program in all areas of Hamilton County, Tennessee, 
with the exception of Indian reservations and tribal lands. The CHCAPCB 
operating permits program is implemented and enforced through: (1) the 
Chattanooga Air Pollution Control Ordinance (within the incorporated 
municipality of the City of Chattanooga, Tennessee); (2) the Hamilton 
County Air Pollution Control regulation (in the unincorporated areas of 
Hamilton County, Tennessee); and (3) air pollution control ordinances 
prepared for and enacted in the incorporated municipalities of East 
Ridge, Red Bank, Soddy-Daisy, Signal Mountain, Lakesite, Walden, 
Collegedale, Lookout Mountain, and Ridgeside.
    EPA has determined that the above regulations, constituting the 
Chattanooga-Hamilton County operating permits program, substantially 
meet the requirements of 40 CFR 70.2 and 70.3 for applicability; 40 CFR 
70.4, 70.5, and 70.6 for permit content (including operational 
flexibility); 40 CFR 70.7 and 70.8 for permit processing requirements 
(including public participation and permit modifications); and 40 CFR 
70.11 for requirements for enforcement authority. The CHCAPCB's 
operating permit program closely follows the federal part 70 
regulations. The TSD contains a detailed analysis of CHCAPCB's program 
and references the sections of the applicable local regulations that 
meet the required elements of an approvable program under 40 CFR part 
70.
    Under part 70, a state must request approval of, and EPA may 
approve as part of that state or local program, any activities or 
emission levels that the state wishes to consider insignificant. Part 
70, however, does not establish emissions thresholds for insignificant 
activities. EPA has accepted emissions thresholds of five tons per year 
for criteria pollutants, and the lesser of 1000 pounds per year or 
section 112(g) de minimis levels for hazardous air pollutants, as 
reasonable.
    Section 70.4(b)(2) requires states to include in their part 70 
programs any criteria used to determine insignificant activities or 
emission levels for the purposes of determining complete applications. 
Section 70.5(c) states that an application for a part 70 permit may not 
omit information needed to determine the applicability of, or to 
impose, any applicable requirement, or to evaluate appropriate fee 
amounts.
    Section 7(c)(11) of the Hamilton County Regulation (section 4-56.11 
of the Chattanooga Code) lists certain units or activities that, due to 
de minimis emission levels, need not be included in a part 70 permit 
application. CHCAPCB believes that these activities generally have a 
potential to emit below 5 tons per year of criteria or regulated 
hazardous air pollutants without size or production rate limitations. 
Section 7(c)(12) of the Hamilton County Regulation (section 4-56.12 of 
the Chattanooga Code) lists activities that are deemed to be 
insignificant due to size and production rate and that must be listed 
in a part 70 permit application but need not have emissions related 
information reported. CHCAPCB believes these activities have a 
potential to emit of less that 5 tons per year of any criteria or 
regulated hazardous air pollutant. CHCAPCB's regulations specify that 
an application may not omit information needed to determine the 
applicability of, or to impose, any applicable requirement, or to 
evaluate the fee amount required.
    CHCAPCB specified that the listed insignificant activities are 
expected to have emissions below five tons per year of criteria and 
regulated hazardous air pollutants. As stated above, EPA has accepted 
emissions thresholds of the lesser of 1000 pounds per year or section 
112(g) de minimis levels for hazardous air pollutants. In addition, 
while CHCAPCB specified the 5 ton per year threshold as the criteria 
used to develop the insignificant activities list, no emission 
thresholds were specified in the regulations. The submittal also did 
not include any information on the estimated level of emissions from 
activities, nor a demonstration that these activities are not likely to 
be subject to an applicable requirement.
    EPA has reviewed CHCAPCB's significant activities lists and is 
concerned that several of the activities 

[[Page 56287]]
may conflict with applicable requirements and may not have emissions 
levels that are sufficiently below the applicability thresholds to 
assure that no unit potentially subject to an applicable requirement is 
left off a title V application, especially with respect to emissions of 
hazardous air pollutants. EPA has identified these activities of 
concern in the technical support document available in the docket for 
this rulemaking.
    As a condition of full approval, CHCAPCB must remove, clarify, or 
limit the activities in question and/or document that they are not 
potentially subject to an applicable requirement. In revising the 
insignificant activities lists, CHCAPCB must consider emissions of all 
regulated air pollutants, not just criteria and hazardous air 
pollutants. In addition, CHCAPCB must establish emission threshold 
criteria that will not conflict with section 112(g) de minimis levels 
for hazardous air pollutants. As stated above, EPA has accepted 
emissions thresholds of the lesser of 1000 pounds per year or section 
112(g) de minimis levels, as reasonable.
    Part 70 requires prompt reporting of deviations from the permit 
requirements. Section 70.6(a)(3)(iii)(B) requires the permitting 
authority to define ``prompt'' in relation to the applicable 
requirements and type of deviation likely to occur. Although the permit 
program regulations should define ``prompt'' for purposes of 
administrative efficiency and clarity, an acceptable alternative is to 
define ``prompt'' in each individual permit. EPA believes that 
``prompt'' should generally be defined as requiring reporting within 
two to ten days of the deviation. Two to ten days is sufficient time in 
most cases to protect public health and safety as well as to provide a 
forewarning of potential problems. For sources with a low level of 
excess emissions, a longer time period may be acceptable. However, 
prompt reporting must be more frequent than the semiannual reporting 
requirement, given this is a distinct reporting obligation under 
section 70.6(a)(3)(iii)(A). Where ``prompt'' is defined in the 
individual permit but not in the program regulations, EPA may veto 
permits that do not contain sufficiently prompt reporting of 
deviations. CHCAPCB has not defined ``prompt'' in its program, but 
rather intends to require the prompt reporting of deviations in the 
individual permits.
    The Chattanooga-Hamilton County Air Pollution Control Board has the 
authority to issue variances from requirements imposed by local law. 
Section 4-21 of the Chattanooga ordinance, and the corresponding 
chapters of the Hamilton County and local municipalities' regulations, 
allow CHCAPCB discretion to grant relief from compliance with local 
requirements for up to one year. EPA regards this provision as wholly 
external to the program submitted for approval under part 70, and 
consequently proposes to take no action on this provision of the local 
program.
    EPA has no authority to approve provisions of local law, such as 
the variance provision referred to, that are inconsistent with title V. 
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 the procedures 
allowed by part 70. A part 70 permit may be issued or revised 
(consistent with part 70 permitting procedures) to incorporate those 
terms of a variance that are consistent with applicable requirements. A 
part 70 permit may also incorporate, via part 70 permit issuance or 
modification procedures, the schedule of compliance set forth in a 
variance. However, EPA reserves the right to pursue enforcement of 
applicable requirements notwithstanding the existence of a compliance 
schedule in a permit to operate. This is consistent with 40 CFR 
70.5(c)(8)(iii)(C), which states that a schedule of compliance ``shall 
be supplemental to, and shall not sanction noncompliance with, the 
applicable requirements on which it is based.''
3. Permit Fee Demonstration
    Section 502(b)(3) of the Act requires each permitting authority to 
collect fees sufficient to cover all reasonable direct and indirect 
costs necessary for the development and administration of its title V 
operating permit program. Each title V program submittal must contain 
either a detailed demonstration of fee adequacy or a demonstration that 
aggregate fees collected from title V sources meet or exceed $25 per 
ton of emissions per year (adjusted from 1989 by the Consumer Price 
Index (CPI)). The $25 per ton is presumed, for program approval, to be 
sufficient to cover all reasonable program costs and is thus referred 
to as the ``presumptive minimum.''
    The Chattanooga-Hamilton County Air Pollution Control Board has 
elected to adopt a presumptive minimum fee of $29.32 per ton for each 
annual accounting period (adjusted by the CPI as required). The fee 
demonstration showed that the fees collected will adequately cover the 
anticipated costs of the operating permit program. The program 
activities that will constitute CHCAPCB's title V operating permit 
program are consistent with the activities described in 40 CFR 
70.9(b)(1). Section 4-60 of the Chattanooga Code provides that an 
annual accounting of the operating permit program will be performed to 
ascertain whether the annual fees collected are sufficient to support 
the direct and indirect costs of the title V program.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority for Section 112 Implementation. In its program 
submittal, Chattanooga-Hamilton County demonstrates adequate legal 
authority to implement and enforce all section 112 requirements through 
the title V permit. This legal authority is contained in regulatory 
provisions defining ``applicable requirements'' and requiring each 
permit to incorporate conditions that assure compliance with all 
applicable requirements. In addition, this definition includes language 
that clarifies that in the period after federal adoption, and before 
local adoption, the part 70 permit will specify that the source is 
subject to the cited federal standard. EPA is interpreting the above 
legal authority to mean that Chattanooga-Hamilton County is able to 
carry out all section 112 activities with respect to part 70. For 
further discussion, please refer to TSD accompanying this action and 
the April 13, 1993 guidance memorandum entitled, ``Title V Program 
Approval Criteria for Section 112 Activities,'' signed by John Seitz.
    b. Implementation of Section 112(g) Upon Program Approval. EPA 
issued an interpretive notice on February 14, 1995 (60 FR 8333), which 
outlines EPA's revised interpretation of section 112(g) applicability. 
The notice postpones the effective date of section 112(g) until after 
EPA has promulgated a rule addressing that provision. The notice sets 
forth in detail the rationale for the revised interpretation.
    The section 112(g) interpretative notice explains that EPA is 
considering whether the effective date of section 112(g) should be 
delayed beyond the date of promulgation of the Federal rule so as to 
allow states time to adopt rules implementing the Federal rule, and 
that EPA will provide for any such additional delay in the final 
section 112(g) rulemaking. Unless and until EPA provides for such an 
additional postponement of section 112(g), Chattanooga-Hamilton County 
must have a Federally enforceable mechanism for implementing section 
112(g) during the period between promulgation of the 

[[Page 56288]]
Federal section 112(g) rule and adoption of implementing local 
regulations.
    EPA is aware that Chattanooga-Hamilton County lacks a program 
designed specifically to implement section 112(g). However, 
Chattanooga-Hamilton County does have a preconstruction review program 
that can serve as an adequate implementation vehicle during the 
transition period because it would allow the County to select control 
measures that would meet the maximum achievable control technology 
(MACT), as defined in section 112, and incorporate these measures into 
a Federally enforceable preconstruction permit.
    For this reason, EPA proposes to approve the use of Chattanooga-
Hamilton County's preconstruction review programs found in Section 4-8 
of the Chattanooga Code, and the corresponding sections of the Hamilton 
County and local municipalities' regulations, under the authority of 
title V and part 70, solely for the purpose of implementing section 
112(g) to the extent necessary during the transition period between 
section 112(g) promulgation and adoption of a local rule implementing 
EPA's section 112(g) regulations. Although section 112(l) generally 
provides authority for approval of state and local air programs to 
implement section 112(g), title V and section 112(g) provide for this 
limited approval because of the direct linkage between the 
implementation of section 112(g) and title V. The scope of this 
approval is narrowly limited to section 112(g) and does not confer or 
imply approval for purpose of any other provision under the Act (e.g., 
section 110). This approval will be without effect if EPA decides in 
the final section 112(g) rule that sources are not subject to the 
requirements of the rule until local regulations are adopted. The 
duration of this approval is limited to 18 months following 
promulgation by EPA of the section 112(g) rule to provide adequate time 
for Chattanooga, Hamilton County, and the affected municipalities to 
adopt regulations consistent with the Federal requirements.
    c. Program for Delegation of Section 112 Standards as Promulgated. 
The requirements for part 70 program approval, specified in 40 CFR 
70.4(b), encompass section 112(1)(5) requirements for approval of a 
state program for delegation of section 112 standards promulgated by 
EPA as they apply to title V sources. Section 112(1)(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 also proposes to grant 
approval, under section 112(1)(5) and 40 CFR 63.91, of Chattanooga-
Hamilton County's program for receiving delegation of section 112 
standards that are unchanged from the Federal standards as promulgated 
and to delegate existing standards and programs under 40 CFR parts 61 
and 63 for part 70 sources and non-part 70 sources. This program for 
delegation applies to both existing and future standards, and to part 
70 and non-part 70 sources. CHCAPCB has informed EPA that it intends to 
accept delegation of section 112 standards through incorporation by 
reference. The details of the CHCAPCB's delegation mechanism is set 
forth in a letter to EPA, dated October 19, 1995, and is contained in 
the docket for this action
    d. Commitment to Implement Title IV of the Act. On March 29, 1995, 
EPA published a Federal Register Notice (60 FR 16127) notifying 
affected sources that the CHCAPCB's acid rain program had been 
established and that CHCAPCB's regulations are acceptable for the 
purposes of administering an acid rain program. Chattanooga-Hamilton 
County has committed to incorporate by reference, following 
promulgation by EPA, any new or revised provision of 40 CFR part 72 or 
provisions implementing sections 407 and 410 of the Act.

B. Proposed Actions

1. Full Approval
    The EPA proposes to fully approve the operating permits program 
submitted to the EPA by the State of Tennessee of behalf of the 
Chattanooga-Hamilton County Air Pollution Control Board on November 22, 
1995, if certain changes are made to the program and submitted to EPA 
prior to EPA's final action on this proposal. As a condition of full 
approval, CHCAPCB must remove, clarify, or limit certain insignificant 
activities and/or document that they are not potentially subject to an 
applicable requirement. EPA has determined that the program is 
otherwise adequate to meet the minimum elements of a local operating 
permits program as specified in 40 CFR part 70.
2. Interim Approval
    EPA is proposing to grant interim approval to the operating permits 
program under 40 CFR 70.4(d) if the changes required for full approval, 
as described above, are not made prior to final promulgation of this 
rulemaking. EPA can grant interim approval because CHCAPCB's permit 
program substantially meets the approval process and requirements of 
part 70, as discussed in section II(A) of this notice. The problems 
noted above will not prevent CHCAPCB for issuing permits that are 
consistent with part 70 on an interim basis.
    If EPA grants interim approval to CHCAPCB, the interim approval 
would extend for two years following the effective date of final 
interim approval, and could not be renewed. During the interim approval 
period, Hamilton County would not be subject to sanctions, and EPA 
would not be obligated to promulgate, administer, and enforce a Federal 
operating permit program for the County. Permits issued under a program 
with interim approval are fully effective with respect to part 70 and 
the three-year time period for processing the initial permit 
applications will begin upon the effective date of final interim 
approval.
    Following the granting of final interim approval, if the 
Chattanooga-Hamilton County Air Pollution Control Board fails to submit 
a complete corrective program for full approval by the date six months 
before expiration of the interim approval, EPA will start an 18-month 
clock for mandatory sanctions. If the Chattanooga-Hamilton County Air 
Pollution Control Board then fails to submit a corrective program that 
EPA finds complete before the expiration of that 18-month period, EPA 
is required to apply one of the sanctions in section 179(b) of the Act, 
which will remain in effect until EPA determines that the Chattanooga-
Hamilton County Air Pollution Control Board has corrected the 
deficiency by submitting a complete corrective program.
3. Program for Straight Delegation of Section 112 Standards
    As discussed previously in section II.A.4.b., EPA proposes to 
approve Chattanooga-Hamilton County's preconstruction review program, 
under the authority of title V and part 70 solely for the purpose of 
implementing section 112(g) to the extent necessary during the 
transition period between 112(g) promulgation and adoption of a local 
rule implementing EPA's section 112(g) regulations.
    In addition, as discussed in section II.A.4.c., EPA proposes to 
grant approval under section 112(1)(5) and 40 CFR 63.91 to CHCAPCB for 
receiving delegation of section 112 standards that are unchanged from 
Federal standards as promulgated. EPA also proposes to delegate all 
existing standards under 40 

[[Page 56289]]
CFR part 61 and 63 both part 70 and non-part 70 sources.
4. Other Implications
    The scope of Chattanooga-Hamilton County's part 70 program that EPA 
proposes to approve, or interimly approve in the alternative, in this 
notice would apply to all part 70 sources (as defined in the approved 
program) within Hamilton County, 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. 24, 
1994); 58 FR 54364 (Oct. 21, 1993).

III. Administrative Requirements

A. Request for Public Comments

    EPA requests comments on all aspects of this proposed full/interim 
approval. Copies of CHCAPCB's submittal and other information relied 
upon for the proposed alternatives of full approval and interim 
approval are contained in docket number TN-CHAT-95-01, maintained at 
the EPA Regional Office. The docket is an organized and complete file 
of all the information submitted to, or otherwise considered by, EPA in 
the development of this proposed full/interim approval. The principal 
purposes of the docket are:
    (1) to allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process; and
    (2) to serve as the record in case of judicial review. EPA will 
consider any comments received by December 8, 1995.

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    EPA's actions under section 502 of the Act do not create any new 
requirements, but simply address operating permit programs submitted to 
satisfy the requirements of 40 CFR part 70. Because this action does 
not impose any new requirements, it does not have a significant impact 
on a substantial number of small entities.

D. Unfunded Mandates Reform Act of 1995

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate, or to 
the private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the proposed action promulgated today does 
not include a Federal mandate that may result in estimated costs of 
$100 million or more to State, local, or tribal governments in the 
aggregate, or to the private sector. This Federal action approves pre-
existing requirements under State or local law, and imposes no new 
Federal requirements. Accordingly, no additional costs to State, local, 
or tribal governments, or to the private sector, result from this 
action.

List of Subjects in 40 CFR Part 70

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

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

    Dated: October 31, 1995.
Patrick M. Tobin,
Acting Regional Administrator.
[FR Doc. 95-27698 Filed 11-7-95; 8:45 am]
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