[Federal Register Volume 60, Number 219 (Tuesday, November 14, 1995)]
[Proposed Rules]
[Pages 57204-57207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28065]



=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[PROO1; FRL-5331-1]


Clean Air Act Proposed Full Approval of Operating Permits 
Program: the Commonwealth of Puerto Rico

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed full approval.

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

SUMMARY: The EPA proposes full approval of the operating permits 
program submitted by the Commonwealth of Puerto Rico for the purpose of 
complying with Federal requirements for an approvable state program to 
issue operating permits to all major stationary sources and to certain 
other sources.

DATES: Comments on this proposed action must be received in writing by 
December 14, 1995.

ADDRESSES: Written comments should be addressed to Steven C. Riva, 
Chief, Permitting and Toxics Support Section, at the New York Region II 
Office listed below. Copies of the State's submittal and other 
supporting information used in developing the proposed full approval as 
well as the Technical Support Document are available for inspection 
during normal business hours at the following locations:
    EPA Region II, 290 Broadway, 21st Floor, New York, New York 10007-
1866, Attention: Steven C. Riva.
    EPA Region II, Caribbean Field Office, Centro Europa Building, 
Suite 417, 1492 Ponce de Leon Avenue, Stop 22, San Juan, Puerto Rico 
00907-4127, Attention: Jose Ivan Guzman.
    Puerto Rico Environmental Quality Board, Air Programs Area, 
Eurobank Building, 431 Ponce de Leon Avenue, Hato Rey, PR 00910, 
Attention: Francisco Claudio.

FOR FURTHER INFORMATION CONTACT: Christine Fazio, Permitting and Toxics 
Support Section, at the above EPA office in New York or at telephone 
number (212) 637-4015. Jose Ivan Guzman of the Caribbean Field Office 
can be reached at (809) 729-6951, extention 223.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    As required under title V of the Clean Air Act (``the Act'') 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 the EPA will approve, 
oversee, and withdraw approval of State operating permits programs (see 
57 FR 32250 (July 21, 1992)). These rules are codified at 40 Code of 
Federal Regulations (CFR) Part 70. Title V requires States to develop, 
and submit to EPA, programs for issuing these operating permits to all 
major stationary sources and to certain other sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within 1 year after receiving the submittal. The EPA's 
program review occurs pursuant to section 502 of the Act and the part 
70 regulations, which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, 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, it must establish and implement a Federal program.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials
    The Chairman of the Environmental Quality Board (EQB) submitted a 
part 70 permitting program for the Commonwealth of Puerto Rico with a 
letter requesting EPA's approval on November 15, 1993 and a 
supplemental package on March 22, 1994. The program contains a 
description of how the EQB intends to implement the program consistent 
with the requirements of the Act and 40 CFR part 70. The program 
includes supporting documentation such as evidence of the procedurally 
correct adoption of the permitting rule, permit application forms, and 
a sample permit form. On April 11, 1994 the Attorney General of Puerto 
Rico submitted a legal opinion stating that EQB has adequate legal 
authority to carry out the program. On September 29, 1995, EQB 
submitted a revised regulation which included minor changes to the 
regulation submitted on March 22, 1994. The EPA intends to develop an 
implementation agreement with Puerto Rico which will define EPA's and 
EQB's responsibilities and commitments for administering the program, 
although this proposed action does not depend on the implementation 
agreement.
2. Regulations and Program Implementation
    Puerto Rico's part 70 permitting regulation is contained in Part I, 
Rule 102; Part II, Rule 206; Part VI, Rules 601 through 610; and 
Appendices A through E of the Regulation For The Control Of Atmospheric 
Pollution (RCAP) dated September 1995. Puerto Rico's regulation meets 
the main requirements of Part 70 as described below:
    a. applicability (40 CFR 70.2 and 70.3): Sources required to obtain 
a permit under Puerto Rico's regulation are defined as ``Title V 
sources'' and 

[[Page 57205]]
include all major part 70 sources. The rule defers non-major sources 
until the Administrator completes a rulemaking to determine how the 
title V program should be structured for non-major sources and the 
appropriateness of any permanent exemptions. The regulation permanently 
exempts any source that would be required to obtain a permit solely 
because it is subject to Standards of Performance for New Residential 
Wood Heaters or the National Emission Standard for Hazardous Air 
Pollutants for Asbestos, Standards for Demolition and Renovation. 
(Rules 102 and 601 of the RCAP)
    b. permit content (40 CFR 70.6): Rule 603 requires that each permit 
contain emission limitations and standards to ensure compliance with 
all applicable requirements. Permits may also contain certain 
operational flexibility requirements such as terms and conditions for 
reasonably anticipated operating scenarios (including worst-case 
operational scenarios) and for the trading of emissions increases and 
decreases (to the extent the applicable requirements provide for such 
trading) in the permitted facility. Such operational flexibility 
provisions are explained more fully in Rules 603 and 607 of the RCAP.
    c. public participation (40 CFR 70.7): The public will be provided 
with notice of, and an opportunity to comment on, draft permits 
relating to initial permit issuance, permit renewals, and significant 
modifications (Rule 609 of the RCAP).
    d. permit modifications (40 CFR 70.7): Sources may apply for 
expedited permit changes for minor permit modifications. Significant 
modifications must undergo all part 70 permit issuance procedures (Rule 
606 of the RCAP).
    e. EPA oversight (40 CFR 70.8): Each permit, renewal, and minor or 
significant modification is subject to EPA oversight and veto (Rule 609 
of the RCAP).
    f. insignificant activities (40 CFR 70.5): The lists of 
insignificant activities can be found at Rule 206 and Appendix B of the 
RCAP (the two lists are different). Insignificant activities which need 
not be described in the permit application include sources on the two 
lists provided no applicable requirements apply to the source and the 
source emits 2 tons per year or less of a criteria pollutant or 5 tons 
per year or less of any combination of criteria pollutants; and 2 tons 
per year or the de minimis rates for hazardous air pollutants listed in 
Appendix E (whichever is lower). For insignificant activities exempted 
because of size or production rate, a list of such insignificant 
activities must be included in the permit application. In addition, any 
unit with allowable emission rates less than certain quantities 
identified in Item P of Appendix B (e.g., from 1 to 2 tpy depending on 
pollutant) can be listed on the permit application as an insignificant 
activity if no applicable requirements apply to the unit.
    g. enforcement authority (40 CFR 70.11): Article 17 of Law No. 9 of 
June 18, 1970 as amended on November 12, 1993 (``Law No. 9'') directly 
provides for enforcement and penalties for civil and criminal 
violations of permits and rules. Penalties will be assessed up to 
$25,000 per day per violation.
    h. complete application forms (40 CFR 70.5): Rule 602 defines what 
elements must be in an application in order for it to be complete. All 
information is included in EQB's permit application.
    i. variance provisions: Part III, Rule 301 of the RCAP contains 
provisions for EQB to approve variances from the strict application of 
substantive requirements of the Puerto Rico regulation, except for NSPS 
and NESHAP requirements. Rule 301 also states that no variance will be 
approved by EQB unless it has been approved by EPA. Under Rule 302, EQB 
may provide for an emergency variance of up to 90 days under very 
special circumstances such as to avoid an imminent health threat. EPA 
regards Rules 301 and 302 as wholly external to the program submitted 
for approval under part 70. 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 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
    Puerto Rico's workload analysis and fee demonstration shows that 
the state will collect sufficient revenue to implement the Title V 
program. Puerto Rico will collect permit fees beginning at $25 adjusted 
by the Consumer Price Index (base year 1989) per ton of allowable 
emissions of regulated pollutants. However, the state-owned utility 
will be capped at a fee of $1 million per year for its existing 
facilities and the state hospital is exempt from fees. Puerto Rico's 
fee demonstration and regulation (Rule 610 of the RCAP) state that 
Puerto Rico may raise fees if necessary in the future. Furthermore, 
Article 11 of Law No. 9 requires that sufficient fees be collected to 
cover the direct and indirect expenses necessary to develop, administer 
and enforce Puerto Rico's Title V program, including the Small Business 
Technical and Environmental Compliance Assistance Program as required 
by section 507 of the Act. Article 11 of Law No. 9 establishes a 
special account which is independent and separate from any other 
account in Puerto Rico and must be used only for the Air Quality 
Program.
4. Provisions Implementing Section 112 of the Act
    a. authority for Section 112 Implementation: Puerto Rico has 
demonstrated in its title V program submittal adequate legal authority 
to implement and enforce all section 112 requirements through the title 
V permit. This legal authority is contained in Puerto Rico's enabling 
legislation (Article 12 of Law No. 9) and in regulatory provisions 
defining ``applicable requirements'' and stating that the permit must 
incorporate all applicable requirements. EPA has determined that this 
is sufficient to allow Puerto Rico to issue permits that assure 
compliance with all section 112 requirements. The Attorney General's 
legal opinion also certifies that EQB has authority to implement the 
air toxics program and to accept automatic delegation of future 
national emission standards for hazardous air pollutants. Rule 
110(A)(2) of the Regulation for the Control of Atmospheric Pollution 
(RCAP) provides that NESHAPs when promulgated by the EPA Administrator 
will become effective as part of Puerto Rico's rules and regulations. 
Rule 604 of the RCAP provides for the following section 112 
requirements:
    i. case-by-case MACT determinations: In the event that no 
applicable emissions limitations have been established by the 
Administrator, EQB will make case-by-case Maximum Achievable Control 
Technology (MACT) determinations as required under sections 112 (j) and 
(g) of the Act. 

[[Page 57206]]

    ii. early reductions: Rule 604 authorizes EQB to issue permits with 
an alternate emission limit under the Act's section 112(i)(5) early 
reductions program.
    iii. implementation of section 112(r): Rule 604 requires sources 
subject to section 112(r) of the Act to prepare and submit risk 
management plans. A source must submit an annual certification ensuring 
the proper implementation of the risk management plan.
    b. implementation of section 112(g): The EPA issued an interpretive 
notice on February 14, 1995 (60 FR 8333), which outlines EPA's revised 
interpretation of 112(g) applicability. The notice postpones the 
effective date of 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) 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 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 postponing of section 112(g), Puerto Rico must be able to 
implement section 112(g) during the period between promulgation of the 
Federal section 112(g) rule and the adoption of Puerto Rico rules 
implementing EPA's section 112(g) regulations.
    The EPA is proposing to approve Puerto Rico's preconstruction 
permitting program found in Rule 203 of the RCAP 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 
title V approval and adoption of a State rule implementing EPA's 
section 112(g) regulations. Furthermore, EQB has provided broad 
language in its regulation that will allow the implementation of 112(g) 
immediately after EPA establishes and adopts final guidelines (Rule 604 
of the RCAP). EQB defines the de minimis levels under Appendix E based 
on the 112(g) draft rule but stipulates if the final 112(g) rule 
differs in any way, the federal de minimis levels prevail (Rule 102 of 
the RCAP--definition of de minimis).
    c. Section 112(l): Requirements for approval specified in 40 CFR 
70.4(b), encompass section 112(l)(5) approval requirements for 
delegation of section 112 standards as they apply to part 70 sources. 
Section 112(l)(5) requires that the state's program contain adequate 
authorities, adequate resources for implementation, an expeditious 
compliance schedule, and adequate enforcement ability, which are also 
requirements under part 70. In a letter dated December 29, 1994, EQB 
requested delegation through 112(l) of all existing 112 standards and 
all future 112 standards for both part 70 and non-part 70 sources and 
infrastructure programs. In the letter, EQB demonstrated that they have 
sufficient legal authorities, adequate resources, the capability for 
automatic delegation of future standards, and adequate enforcement 
ability for implementation of section 112 of the Act for both part 70 
sources and non-part 70 sources. Therefore, the EPA is proposing to 
grant approval under section 112(l)(5) and 40 CFR 63.91 to Puerto Rico 
for its program mechanism for receiving delegation of all existing and 
future section 112(d) standards for both part 70 and non-part 70 
sources, and section 112 infrastructure programs that are unchanged 
from Federal rules as promulgated.
    Puerto Rico commits to appropriately implementing the existing and 
future requirements of sections 111, 112 and 129 of the Act, and all 
MACT standards promulgated in the future, in a timely manner.

B. Options for Approval/Disapproval and Implications

    The EPA is proposing full approval of the operating permits program 
submitted to EPA by the Commonwealth of Puerto Rico on November 15, 
1993 and supplemented on March 18, 1994, April 8, 1994, and September 
29, 1995. Among other things, Puerto Rico has demonstrated that the 
program will be adequate to meet the minimum elements of a State 
operating permits program as specified in 40 CFR part 70.
    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 and standards as promulgated by EPA as they apply to 
part 70 sources. 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, the EPA is also proposing to grant approval 
under section 112(l)(5) and 40 CFR 63.91 to Puerto Rico for its program 
mechanism for receiving delegation of all existing and future section 
112(d) standards for both part 70 and non-part 70 sources, and 
infrastructure programs under section 112 that are unchanged from 
Federal rules as promulgated.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed full 
approval. Copies of the State's submittal and other information relied 
upon for the proposed full approval are contained in a docket 
maintained at the EPA Regional Offices located in New York and San Juan 
and at the EQB. 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 rulemaking. 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 December 14, 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 Act

    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 

[[Page 57207]]
costs of $100 million or more to either State, local, or tribal 
governments in the aggregate, or to the private sector. This federal 
action approves pre-existing requirements under State or local law, and 
imposes no new federal requirements. Accordingly, no additional costs 
to State, local, or tribal governments, or to the private sector, 
result from this action.

List of Subjects in 40 CFR Part 70

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

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

    Dated: October 30, 1995.
William J. Muszynski,
Acting Regional Administrator.
[FR Doc. 95-28065 Filed 11-13-95; 8:45 am]
BILLING CODE 6560-50-P