[Federal Register Volume 60, Number 220 (Wednesday, November 15, 1995)]
[Rules and Regulations]
[Pages 57357-57361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28186]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[NC-95-01; FRL-5332-2]


Clean Air Act Final Interim Approval Of Operating Permits 
Program; State of North Carolina, Western North Carolina, Forsyth 
County, and Mecklenburg County

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: EPA is promulgating interim approval of the operating permit 
program submitted by the State of North Carolina Department of Health 
(DEHNR), Western North Carolina Regional Air Pollution Control Agency 
(WNCRAPCA), Forsyth County Department of Environmental Affairs (FCDEA), 
and Mecklenburg County Department of Environmental Protection (MCDEP) 
for the purpose of complying with Federal requirements for an 
approvable State program to issue operating permits to all major 
stationary sources, and to certain other sources.

EFFECTIVE DATE: December 15, 1995.

ADDRESSES: Copies of the North Carolina State and local agency 
submittals and the other supporting information used in developing the 
final interim approval are available for inspection during normal 
business hours at the following location: U.S. Environmental Protection 
Agency, Region 4, 345 Courtland Street, NE., Atlanta, Georgia 30365. 
Interested persons wanting to examine these documents, contained in EPA 
docket number NC-95-01, should make an appointment at least 24 hours 
before the visiting day.

FOR FURTHER INFORMATION CONTACT: Scott Miller, Title V Program 
Development Team, Air Programs Branch, Air Pesticides & Toxics 
Management Division, U.S. EPA Region 4, 345 Courtland Street NE., 
Atlanta, GA 30365, (404) 347-3555 extension 4153.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    Title V of the 1990 Clean Air Act Amendments (the Act) and the 
implementing regulations at 40 Code of Federal Regulations (CFR) part 
70 require that States develop and submit operating permits programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within one year after receiving the submittal. If the 
State or local agency submittals are changed 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 

[[Page 57358]]
receipt of additional materials. EPA received the North Carolina State 
and local agency submittals on November 12, 1993. The State and local 
agencies provided EPA with additional materials in supplemental 
submittals dated December 17, 1993; February 28, 1994; May 31, 1994; 
and August 9, 1995. Because the supplements materially changed the 
State and local agency title V program submittals, EPA extended the 
one-year review period.
    EPA reviews state and local operating permit programs pursuant to 
section 502 of the Act and the part 70 regulations, which together 
outline criteria for approval or disapproval. Where a program 
substantially, but not fully, meets the requirements of part 70, EPA 
may grant the program interim approval for a period of up to two years. 
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 for the state or local agency.
    On August 29, 1995, EPA proposed interim approval of the operating 
permits program for the DEHNR, WNCRAPCA, FCDEA, and MCDEP. See 60 FR 
44805. The August 29, 1995 notice also proposed approval of the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP interim mechanism for implementing section 
112(g) and for delegation of section 112 standards and programs that 
are unchanged from the Federal rules as promulgated. Public comment was 
solicited on these proposed actions. In this document, EPA is 
responding to the comments received and taking final action to 
promulgate interim approval of the North Carolina State and local 
operating permit programs.

II. Final Action and Implications

A. Analysis of State Submission and Response to Public Comments

    On August 29, 1995, EPA proposed interim approval of the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP title V operating permit programs. See 60 FR 
44805. The program elements discussed in the proposal notice are 
unchanged from the proposal notice and continue to substantially meet 
the requirements of title V and part 70. For detailed information on 
EPA's analysis of North Carolina State and local program submittals, 
please refer to the Technical Support Document (TSD) contained in the 
docket at the address noted above.
    EPA received one letter during the 30-day public comment period 
held on the proposed interim approval of the North Carolina State and 
local agency programs. The commenter requests that EPA extend the title 
V permit application submittal deadline for at least two years from the 
effective date of approval for the DEHNR, WNCRAPCA, FCDEA, and MCDEP 
due to the complexity and evolving nature of the title V program. The 
application submittal deadline is a function of North Carolina State 
and local law in response to the original part 70 regulations 
promulgated July 21, 1992. See 57 FR 32250. Section 503(c) of the Act 
requires all title V facilities to submit an application to the 
relevant state and local permitting authorities within one year after 
the effective date of the title V program approval. The DEHNR, 
WNCRAPCA, FCDEA, and MCDEP programs fulfill this statutory requirement. 
Therefore, EPA denies the request to extend the title V permit 
application submittal deadline for at least two years from the 
effective date of approval for the DEHNR, WNCRAPCA, FCDEA, and MCDEP 
title V operating permit programs.
    The commenter requests that insignificant activity levels for 
hazardous air pollutants (HAP) should be set no lower than the section 
112(g) de minimis levels for individual pollutants. The commenter is 
concerned that ``increases above the 112(g) de minimis levels trigger a 
complex review process and the State should be given the flexibility to 
reserve limited resources for more significant modifications.'' Section 
70.4(b)(2) requires state and local agencies to include in their part 
70 programs any criteria used to determine insignificant activities or 
emission levels for the purpose 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 70.5(c) also states that EPA may approve, as part of a 
state program, a list of insignificant activities and emissions levels 
which need not be included in permit applications. Under part 70, a 
state or local agency must request and EPA may approve as part of that 
state's or local agency's program any activities or emission levels 
that they wish to consider insignificant. Part 70, however, does not 
establish emission thresholds for insignificant activities. EPA has 
accepted emission 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 HAP, as reasonable.
    The commenter urges EPA to limit the amount of fees that may be 
charged to a facility to be limited to the presumptive minimum ($25/ton 
of actual emissions adjusted annually to the Consumer Price Index 
(CPI)). The Act leaves to state discretion the structure of the title V 
fee schedule provided it meets the requirement of presumptive minimum 
or cost of the program. The DEHNR, FCDEA, and MCDEP fee schedules were 
set to raise, in the aggregate, the presumptive minimum based on 
estimates of title V source numbers and emissions. The flat fee plus 
tonnage fee formula was recommended by a State-legislatively 
established Clean Air Act Advisory Council to reflect work effort to 
issue and enforce permits. It was adopted by the Environmental 
Management Commission after public hearings. This fee formula means 
that some sources will pay less than a straight $25 plus inflation per 
ton fee, and some will pay more. In the aggregate, fee revenue has not 
exceeded the presumptive minimum. In the North Carolina State and local 
agency proposed program approval notice, EPA noted submittal of fee 
demonstrations from the DEHNR, FCDEA, and MCDEP that showed each 
program will collect the presumptive minimum fee. The WNCRAPCA 
submitted a title V program fee demonstration that demonstrated that it 
will collect less than the presumptive minimum. Therefore, the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP have in effect accommodated the commenter's 
request.
    The commenter requested that EPA urge the DEHNR, WNCRAPCA, FCDEA, 
and MCDEP to set aside any surplus monies generated in the title V 
operating permit program to be placed in a separate interest-bearing 
account. The commenter further requests that these funds should be 
applied as a credit against fees required in succeeding years, 
according to the proportion of the total of all emissions fees which 
were paid by a title V facility in a timely manner. As previously 
stated, the Act leaves to state discretion the structure of the title V 
fee schedule provided it meets the requirement of presumptive minimum 
or cost of the program. State statutes provide that the fees go into a 
separate title V nonreverting account. State statutes do not provide 
for interest, as they would have to for interest to be credited. State 
statutes do provide for reductions of fees when and if the funds in the 
account exceed the title V program cost for the next fiscal year.
    The commenter requests that EPA urge DEHNR, WNCRAPCA, FCDEA, and 
MCDEP to adopt a list of ``trivial activities,'' as outlined in the 
EPA's ``White Paper for Streamlined 

[[Page 57359]]
Development of Part 70 Permit Applications'' as well as develop a 
process for approving trivial activities on a case-by-case basis. EPA 
notes that DEHNR, WNCRAPCA, FCDEA, and MCDEP have an insignificant 
activities list found at 15A NCAC 2Q.0102 and respective local agency 
regulations which include activities that do not have to be included in 
a title V permit application. Should the State and local programs elect 
to utilize the list of trivial activities from the ``White Paper for 
Streamlined Development of Part 70 Permit Applications,'' they may do 
so at their own discretion. In addition, DEHNR, WNCRAPCA, FCDEA, and 
MCDEP have complete discretion over whether to create a process for 
case-by-case determinations of trivial activities. EPA recommends that 
the commenter make any such request to DEHNR, WNCRAPCA, FCDEA, and 
MCDEP.
    Finally, the commenter took opportunity to make comments regarding 
provisions of the part 70 supplemental revisions published on August 
31, 1995. See 60 FR 45530. This rulemaking exclusively covers the 
DEHNR, WNCRAPCA, FCDEA, and MCDEP title V operating permit programs 
which are being approved under the existing regulations found at 40 CFR 
part 70. EPA recommends that the commenter provide comment on the 
proposed part 70 revisions to the appropriate rulemaking docket for the 
subject rulemaking found at 60 FR 45530 (August 31, 1995).

B. Final Action

1. Title V Operating Permit Program
    EPA is promulgating interim approval of the operating permits 
program submitted by the DEHNR, WNCRAPCA, FCDEA, and MCDEP on November 
12, 1993, and supplemented on December 17, 1993; February 28, 1994; May 
31, 1994; and August 9, 1995. The DEHNR, WNCRAPCA, FCDEA, and MCDEP 
must make the following changes to receive full program approval:
    (a) Revise Regulation 15A NCAC 2Q.0507 (MCAPCO Regulation 1.5507, 
FCAQTC Regulation 3Q.0507, and WNCRAPCARR Regulation 17.0507) to 
require an applicant to include all fugitive emissions regardless of 
whether such emissions will be used to determine title V applicability. 
These fugitive emissions estimates may be of a qualitative nature as 
opposed to a numerical quantitative emission estimate.
    (b) Revise Regulation 15A NCAC 2Q.0502(c) (MCAPCO Regulation 
1.5502(c), FCAQTC Regulation 3Q.0502(c), and WNCRAPCARR Regulation 
17.0502(c)) to assure that R&D facilities which are collocated with 
manufacturing facilities and which are under common control and 
belonging to a single major industrial grouping will be considered as 
the same facility for determining title V major source applicability 
for a facility. This change will not be necessary in the event that EPA 
promulgates revisions to part 70 that are similar to the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP current treatment of R&D facilities for 
purposes of title V applicability.
    (c) Revise Regulation 15A NCAC 2Q.0102(b)(2)(B) and respective 
local agency regulations to adjust the insignificant emission threshold 
levels downward from potential emissions of 40 tpy to potential per 
emission unit levels for insignificant activities of 5 tons per year 
for criteria pollutants and the lesser of 1000 pounds per year or 
section 112(g) de minimis levels for HAP. The DEHNR, WNCRAPCA, FCDEA, 
and MCDEP must also revise Regulation 15A NCAC 2Q.0102(b)(2)(F) and 
respective local agency regulations to provide that the list granted 
under 15A NCAC 2Q.0102(b)(2)(F) must be subject to the above-mentioned 
potential emission caps.
    (d) Revise Regulation 15A NCAC 2Q.0514(a)(4) and respective local 
agency regulations to clarify that administrative permit amendments may 
be used to change test dates or construction dates only as long as no 
applicable requirements would be violated by doing so. Also, the DEHNR, 
WNCRAPCA, FCDEA, and MCDEP agencies must change the language of 
Regulation 15A NCAC 2Q.0514(a)(4) and respective local agency 
regulations to clarify that an administrative permit amendment may be 
used to move terms and conditions from the State-enforceable side of 
the permit to the State and Federal enforceable portion of the permit 
provided that the term being moved is a requirement which has become 
Federally enforceable through sections 110, 111, or 112 or other parts 
of the Clean Air Act.
    (e) Revise Regulation 15A NCAC 2Q.0515(f) and respective local 
agency regulations to stipulate that a permit shield may not be granted 
for a minor permit modification. In addition, the DEHNR, WNCRAPCA, 
FCDEA, and MCDEP must change Regulation 15A NCAC 2Q.0515(d) and 
respective local agency regulations to specify that in the event an 
applicant submits a single minor permit modification which exceeds the 
thresholds listed in 15A NCAC 2Q.0515(c), the minor permit modification 
must be processed within 90 days after receiving the application or 15 
days after the end of EPA's 45 day review period, whichever is later.
    (f) Revise Regulation 15A NCAC 2Q.0517(b) and respective local 
agency regulations to provide that a title V permit shall be reopened 
and reissued within 18 months after a newly applicable requirement is 
promulgated. Also, the DEHNR, WNCRAPCA, FCDEA, and MCDEP must amend 
Regulation 15A NCAC 2Q.0517(b)(2) and respective local agency 
regulations to clarify that no reopening of a permit is required only 
if the effective date of a newly applicable requirement is after the 
expiration of the permit, unless the term of the permit was extended 
based on the fact that the DEHNR, WNCRAPCA, FCDEA, and MCDEP had not 
renewed the permit prior to its expiration.
    (g) Revise Regulation 15A NCAC 2Q.0518(f) and respective local 
agency regulations to remove the phrase ``subject to adjudication.''
    The scope of the DEHNR, WNCRAPCA, FCDEA, and MCDEP part 70 programs 
approved in this document applies to all part 70 sources (as defined in 
the approved program) within the State, except any sources of air 
pollution over which an Indian Tribe has jurisdiction. See, e.g., 59 FR 
55813, 55815-55818 (November 9, 1994). The term ``Indian Tribe'' is 
defined under the Act as ``any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village, 
which is Federally recognized as eligible for the special programs and 
services provided by the United States to Indians because of their 
status as Indians.'' See section 302(r) of the CAA; see also 59 FR 
43956, 43962 (August 25, 1994); 58 FR 54364 (October 21, 1993).
    This interim approval, which may not be renewed, extends until 
December 15, 1997. During this interim approval period, the State of 
North Carolina is protected from sanctions, and EPA is not obligated to 
promulgate, administer, and enforce a Federal operating permits program 
in the State. Permits issued under a program with interim approval have 
full standing with respect to part 70, and the one-year time period for 
submittal of permit applications by subject sources begins upon the 
effective date of this final interim approval, as does the three-year 
time period for processing the initial permit applications.
    If the State of North Carolina fails to submit a complete 
corrective program for full approval by June 16, 1997, EPA will start 
an 18-month clock for mandatory sanctions. If North Carolina then fails 
to submit a corrective program that EPA finds complete before the 

[[Page 57360]]
expiration of that 18-month period, EPA will be required to apply one 
of the sanctions in section 179(b) of the Act, which will remain in 
effect until EPA determines that North Carolina has corrected the 
deficiency by submitting a complete corrective program. Moreover, if 
the Administrator finds a lack of good faith on the part of North 
Carolina, both sanctions under section 179(b) will apply after the 
expiration of the 18-month period until the Administrator determines 
that North Carolina has come into compliance. In any case, if, six 
months after the application of the first sanction, North Carolina has 
not submitted a corrective program that EPA has found complete, a 
second sanction will be required.
    If EPA disapproves North Carolina's complete corrective program, 
EPA will be required to apply one of the section 179(b) sanctions on 
the date 18 months after the effective date of the disapproval, unless 
prior to that date the State has submitted a revised program and EPA 
has determined that it corrected the deficiencies that prompted the 
disapproval. Moreover, if the Administrator finds a lack of good faith 
on the part of North Carolina, both sanctions under section 179(b) will 
apply after the expiration of the 18-month period until the 
Administrator determines that the State has come into compliance. In 
all cases, if, six months after EPA applies the first sanction, North 
Carolina has not submitted a revised program that EPA determines to 
have corrected the deficiencies that prompted disapproval, a second 
sanction will be required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the expiration of an interim approval period if a state 
has not timely submitted a complete corrective program. Moreover, if 
EPA has not granted full approval to a state program by the expiration 
of an interim approval and that expiration occurs after November 15, 
1995, EPA must promulgate, administer, and enforce a Federal operating 
permit program for that state upon interim approval expiration.
2. Preconstruction Review Program Implementing Section 112(g)
    EPA is approving the use of the North Carolina State and local 
agency's preconstruction review programs found in Regulation 15A NCAC 
2Q.0300 and respective local agency regulations as a mechanism to 
implement section 112(g) during the transition period between 
promulgation of EPA's section 112(g) rule and the North Carolina State 
and local programs adoption of rules specifically designed to implement 
section 112(g). This approval is limited to the implementation of the 
112(g) rule and is effective only during any transition time between 
the effective date of the 112(g) rule and the adoption of specific 
rules by the North Carolina State and local agencies to implement 
112(g). The duration of this approval is limited to 18 months following 
promulgation by EPA of section 112(g) regulations, to provide the North 
Carolina State and local agencies with adequate time to adopt 
regulations consistent with Federal requirements.
3. 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(l)(5) requirements for approval of a 
state and local program for delegation of section 112 standards 
promulgated by EPA as they apply to title V sources. Section 112(l)(5) 
requires that the State and local programs contain adequate 
authorities, adequate resources for implementation, and an expeditious 
compliance schedule, which are also requirements under part 70. 
Therefore, EPA is approving under section 112(l)(5) and 40 CFR 63.91, 
the North Carolina State and local programs for receiving delegation of 
section 112 standards and programs that are unchanged from the Federal 
rules as promulgated. EPA is also approving the delegation of all 
existing standards under 40 CFR parts 61 and 63. This program for 
delegation applies to both part 70 and non-part 70 sources.1

    \1\ The radionuclide National Emission Standards for Hazardous 
Air Pollutant (NESHAP) is a section 112 regulation and therefore, 
also an applicable requirement under the State and local operating 
permit programs for part 70 sources. There is not yet a Federal 
definition of ``major'' for radionuclide sources. Therefore, until a 
major source definition for radionuclide is promulgated, no source 
would be a major section 112 source solely due to its radionuclide 
emissions. However, a radionuclide source may, in the interim, be a 
major source under part 70 for another reason, thus requiring a part 
70 permit. EPA will work with the State and local agencies in the 
development of a radionuclide program to ensure that permits are 
issued in a timely manner.
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    Based on the delegation requests North Carolina submitted by North 
Carolina and each local agency, EPA has determined that all 
requirements (i.e., legal authority, available resources, 
implementation schedules, and compliance mechanisms) necessary for 
delegation have been satisfied. As the delegation relates to the 
existing NESHAP standards, the effective date of the delegations would 
be the date the individual standards become effective as a matter of 
State or local law. For future standards, the State of North Carolina, 
once State approved, will utilize automatic adoption as its delegation 
mechanism. Hence, all standards will be state effective on the date of 
EPA promulgation. Subsequent (or within thirty days) to the State's 
delegation, the local programs will seek delegation of Federal 
authorities. During the interim period between Federal promulgation and 
the effective local delegations, the North Carolina State and local 
programs will continue to implement the standards, excluding 
enforcement actions, under a Memorandum of Agreement entered into with 
EPA. EPA will retain primary enforcement authority until the respective 
effective dates for each promulgated standard becomes State and locally 
effective. The most efficient use of State, local and EPA resources 
would dictate usage of this streamlined approval approach, thereby, 
negating the need for either the North Carolina State or any of the 
local programs to submit additional demonstrations of authority 
sufficiency, resource availability, and/or implementation mechanisms 
for any requests that are not approved with this title V approval 
action.

III. Administrative Requirements

A. Docket

    Copies of the State and local agency submittals and other 
information relied upon for the final interim approval, including the 
one public comment letter received and reviewed by EPA on the proposal 
notice, are contained in docket number NC-95-01 maintained at the EPA 
Region 4 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 final interim approval. The docket is available for 
public inspection at the location listed under the ADDRESSES section of 
this document.

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. 

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D. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995, 
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 interim approval 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, 
Reporting and recordkeeping requirements.

    Dated: November 2, 1995.
Patrick M. Tobin,
Acting Regional Administrator.
    Part 70, title 40 of the Code of Federal Regulations is amended as 
follows:

PART 70--[AMENDED]

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

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

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

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

* * * * *
    North Carolina
    (a) Department of Environment, Health and Natural Resources, 
Western North Carolina Regional Air Pollution Control Agency, Forsyth 
County Department of Environmental Affairs and the Mecklenburg County 
Department of Environmental Protection: submitted on November 12, 1993, 
and supplemented on December 17, 1993; February 28, 1994; May 31, 1994; 
and August 9, 1995; interim approval effective on December 15, 1995; 
interim approval expires December 15, 1997.
    (b) (Reserved)
* * * * *
[FR Doc. 95-28186 Filed 11-14-95; 8:45 am]
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