[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Rules and Regulations]
[Pages 63631-63634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30261]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5344-9]


Clean Air Act Final Interim Approval of the Operating Permits 
Program; Nevada Division of Environmental Protection; Nevada

AGENCY: Environmental Protection Agency (``EPA'').

ACTION: Final Interim Approval.

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SUMMARY: The EPA is promulgating interim approval of the title V 
operating permits program submitted by the Nevada Division of 
Environmental Protection (``NDEP'' or ``State'') for the purpose of 
complying with federal requirements that mandate that states develop, 
and submit to EPA, programs for issuing operating permits to all major 
stationary sources and to certain other sources.

EFFECTIVE DATE: January 11, 1996.

ADDRESSES: A copy of NDEP's submittal and other supporting information 
used in developing the final approval are available for inspection 
(docket number NV-DEP-95-1-OPS) during normal business hours at the 
following location: U.S. Environmental Protection Agency, Region IX, 
Air & Toxics Division, 75 Hawthorne Street, San Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Celia Bloomfield (telephone 415/744-
1249), Mail Code A-5-2, U.S. Environmental Protection Agency, Region 
IX, Air & Toxics Division, 75 Hawthorne Street, San Francisco, CA 
94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    Title V of the 1990 Clean Air Act Amendments (sections 501-507 of 
the Clean Air Act (``Act'')), and 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 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.
    On August 7, 1995, EPA proposed interim approval of the operating 
permits program for NDEP (``NPRM''). See 60 FR 40140. In that Federal 
Register document, EPA also proposed approval of NDEP's interim 
mechanism for implementing section 112(g) and its program for 
delegation of section 112 standards as promulgated as they apply to 
title V and non-title V sources. Public comment was solicited on the 
three proposed actions, and EPA is responding to those comments in this 
document and in a separate ``Response to Comments'' document that is 
available in the docket at the Regional office.

II. Final Action and Implications

A. Analysis of State Submission and Response to Public Comments

    The August 7, 1995 Federal Register notice proposed interim 
approval of NDEP's title V operating permits program as submitted on 
February 8, 1995. EPA is aware that NDEP has revised its implementing 
regulations since the February 8, 1995 submission; however, those 
revisions have not been submitted to EPA for approval and are not part 
of the program being approved in today's final action.
    EPA received comments on the NPRM from two commenters: the National 
Mining Association (``NMA'') and NDEP. With one exception, the program 
deficiencies identified in the NPRM remain unchanged as a result of 
public comment. Based on public comment and further analysis, the 
deficiency identified in section II.B.1.(2) of the NPRM has been 
removed; i.e., NDEP's definition of ``regulated air pollutant'' is 
fully approvable. See section II.A.4. below for further discussion. The 
commenters also provided a few program clarifications which are 
discussed below. Furthermore, please note that an issue raised as a 
deficiency in the context of ``insignificant activities'' and discussed 
in section II.A.2.c. of the proposed notice has become a separate 
interim approval issue as a result of public comment. See section 
II.A.1. for more information. No adverse public comment was received on 
the proposed approvals of NDEP's program for delegation of section 112 
standards as promulgated or transition mechanism for implementing 
section 112(g), and hence, those approvals have not been altered as a 
result of public comment.
1. Applicability
    In response to a program deficiency identified by EPA in section 
II.B.1.(10) of the NPRM, NDEP commented that it does not plan to permit 
any source that is subject to the New Source Performance Standard 
(``NSPS'') for new residential wood heaters or the National Emissions 
Standard for Hazardous Air Pollutants (``NESHAP'') for asbestos 
demolition because the State has not accepted delegation for such 
standards.
    In order to have a fully approvable program, a state must have 
authority to permit all major sources and to write permits that assure 
compliance with all federal applicable requirements. If under State law 
NDEP must receive delegation of a federal requirement before it can 
write that requirement into a permit or assure compliance with that 
requirement, then NDEP must seek and receive delegation in sufficient 
time to issue the permit. It is possible for Nevada to obtain 
delegation of an NSPS or NESHAP requirement solely for title V sources.
    In the NPRM, EPA relied on the Nevada Attorney General's legal 
opinion (dated November 15, 1993) that NDEP has authority to issue 
permits to all 

[[Page 63632]]
sources required to have permits pursuant to section 502(a) of the Act 
and Sec. 70.3 of part 70 (p. 2 of legal opinion), and authority to 
``require that all applicable requirements be incorporated into an 
operating permit'' (p. 8 of legal opinion). In addition, NDEP has 
committed to implement all applicable requirements, including those 
that would necessitate State rule adoption prior to incorporation into 
the permit. (See Program Submittal, Section II.A.2., pp. II-1 to II-2.) 
EPA expects NDEP to issue permits to all major sources and to include 
all applicable requirements in those permits. If a regulatory 
impediment exists outside of the submitted program, then NDEP must 
eliminate it in order to have a fully approvable program.
    In response to EPA's discussion in the NPRM (section II.A.2.c.) on 
insignificant activities, NDEP commented that two of the listed 
insignificant activities, agricultural land use and equipment or 
contrivances used for food processing, are ``unpermittable 
activities.'' EPA regards this comment as ambiguous given that NAC 
445B.293.1 (previously NAC 445.705.1) requires, and the Attorney 
General's legal opinion confirms, that all major sources (with the two 
exceptions noted above) must obtain operating permits. Furthermore, EPA 
assumed that if information is provided in the application because it 
is needed to ``establish the basis for the applicability of standards'' 
(section 445B.295.2(b), previously 445.7054.2(b)), then the units 
subject to such standards (i.e., applicable requirements) would be 
contained in the permit. EPA expects NDEP to implement its 
insignificant activities provisions in a manner consistent with both 
part 70 and the provisions of the NAC relied upon in the NPRM, that is: 
(1) Emissions from insignificant activities must be considered in 
applicability determinations; (2) Class I permit applications may not 
omit any information needed to determine or impose any applicable 
requirement; and (3) if an applicable requirement applies to a unit at 
a major source, that unit must be permitted. In order to have a fully 
approvable program, NDEP must remove all ambiguity regarding the 
permitting of agricultural and food processing activities and clearly 
require all major sources to obtain Class I permits. If a regulatory 
impediment exists outside of the submitted program, then NDEP must 
eliminate that impediment prior to full program approval.
    Also, in the NPRM, EPA noted that NDEP's program contains 
inconsistencies with regard to the applicability of nonmajor sources to 
title V. (See 60 FR 40141-40142, section II.A.2.a. ``applicability.'') 
EPA requested a letter from NDEP clarifying how it intends to carry out 
the applicability requirements in its program.
    In the comment letter received from NDEP on September 6, 1995, the 
State informed EPA that it has already corrected the ambiguity 
regarding whether or not nonmajor sources subject to a section 111 or 
112 standard are subject to title V. NDEP revised the Nevada 
Administrative Code on April 4, 1995 to clearly state that ``major,'' 
and not ``minor,'' new sources subject to sections 111 and 112 will be 
permitted as Class I-B sources.
2. Insignificant Activities
    One commenter asserted that EPA's position in the NPRM regarding 
insignificant activities is inconsistent with the July 10, 1995 ``White 
Paper,'' which gives states flexibility in designating insignificant 
activities. EPA disagrees that the NPRM is inconsistent with the 
``White Paper'' with regard to insignificant activities. EPA is not 
questioning the State's authority to identify insignificant activities; 
rather, EPA is rejecting the unbounded nature of some of the listed 
activities.
    The meaning of the term ``insignificant'' as used in section 
70.5(c) is that information is unessential for determining whether and 
how an applicable requirement applies at a source. If emissions at an 
activity are extremely low, that activity is unlikely to be subject to 
an applicable requirement. That is why EPA suggested that NDEP create 
an across-the-board emissions threshold above which activities could 
not qualify as insignificant. Without an across-the-board threshold or 
unit-specific limits, activities on NDEP's list, such as ``agricultural 
land use'' and ``equipment or contrivances used exclusively for the 
processing of food'' could be construed as being ``insignificant'' even 
if subject to an applicable requirement. Where there is a chance that 
an activity is subject to an applicable requirement (e.g., food 
processing activities may be subject to the yeast manufacturing 
NESHAP), EPA needs additional criteria, such as an emissions threshold, 
to ensure that the activity is insignificant for part 70 permitting 
purposes.
    The commenter further contended that NDEP's regulation already 
prohibits activities subject to an applicable requirement from 
qualifying as insignificant. Nevertheless, the commenter asked whether 
the following language would resolve EPA's concerns: ``[N]o source 
subject to an applicable requirement may qualify as an insignificant 
activity.''
    EPA disagrees that NDEP's regulation clearly prohibits activities 
subject to an applicable requirement from qualifying as insignificant. 
In fact, NDEP's list of insignificant activities contains activities, 
such as air-conditioning equipment, that are almost certainly subject 
to an applicable requirement. Unless NDEP removes from the list of 
insignificant activities those activities that are likely to be subject 
to a unit-specific applicable requirement, the language proposed by the 
commenter might only cause confusion. However, the language proposed by 
the commenter would help clarify that insignificant activities 
provisions do not exempt sources from title V and do not relieve 
sources from having to comply with any applicable requirements.
    Another comment received on insignificant activities is that EPA's 
recommended emissions thresholds are arbitrary and unnecessary. The 
commenter pointed out that other state programs have allowed emission 
thresholds that are higher than EPA's recommended limits for HAP 
emissions.
    As stated in the proposed notice, EPA will review and evaluate any 
emissions thresholds proposed by NDEP. Emissions thresholds should 
reflect state-specific circumstances. Part 70 specifically provides 
that the permitting authority is responsible for providing the 
``criteria used to determine insignificant activities or emission 
levels.'' NDEP may use levels approved in other state programs as 
guidance.
3. Reporting of Permit Deviations
    Both commenters disagreed with EPA's statement that each permit 
must define ``prompt'' for purposes of prompt reporting of deviations. 
According to the commenters, ``prompt'' is already defined in NAC 
445B.232.4 (previously 445.667.4) as reporting any excess emissions 
within 24 hours. In addition, NAC 445B.326 (previously 445.7133) 
defines prompt for emergencies.
    The purpose of defining ``prompt'' in either the title V program or 
the title V permit is to notify the source of its exact reporting 
obligation. While NAC 445B.232.4 defines ``prompt'' in an acceptable 
manner, it is not currently part of NDEP's title V program. However, 
NAC 445B.326 was submitted as part of NDEP's title V program, and EPA 
agrees that ``prompt'' has already been defined for emergencies covered 
by that provision.
    Given that permits must contain ``all applicable reporting 
requirements'' and that the definition of ``applicable 

[[Page 63633]]
requirement'' in NDEP's program includes State-only requirements, EPA 
believes that sources are adequately notified of their reporting 
obligation for the interim period. Therefore, during the interim 
period, NDEP may rely on NAC 445B.232.4 to define ``prompt'' rather 
than defining it in each individual permit. For full approval, however, 
NDEP must either submit NAC 445B.232.4 for inclusion in its approved 
program, or define ``prompt'' in each permit.
4. Regulated Air Pollutant
    Both commenters disagreed with EPA's position that the definition 
of ``regulated air pollutant'' in NAC 445B.153 (previously 445.5905) is 
deficient. EPA identified NDEP's definition of ``regulated air 
pollutant'' as a program deficiency because it appeared to be 
inconsistent with the part 70 definition. Specifically, NDEP's 
definition seemed to exclude pollutants that are subject to 
requirements of the Act (such as title VI and sections 112(g), 112(j), 
and 112(r)), but are not subject to promulgated standards. This 
apparent inconsistency is not an issue, however, for Class I and Class 
II pollutants since they are all currently subject to promulgated 
requirements (57 FR 31242, July 14, 1992). It is also not an issue for 
section 112 requirements since NDEP's definition of ``regulated air 
pollutant'' can be interpreted broadly to include pollutants regulated 
by sections 112(g), 112(j), and 112(r) of the Act.
5. Duty to Apply
    One commenter asked EPA to clarify what application trigger is 
missing from the State's title V program. In order to understand the 
deficiency, one must look at the language in part 70 which states that 
an initial title V application is due ``within 12 months after the 
source becomes subject to the permit program'' (section 70.5(a)(1)). As 
is the case in NDEP's regulation, a source may ``become subject'' upon 
the effective date of the program or after commencing operation of a 
new source. However, these two situations are not the only scenarios 
that would make a source subject to title V for the first time. For 
instance, a source may become subject to title V upon promulgation of a 
MACT standard that does not exempt nonmajor sources to obtain title V 
permits. Similarly, the Administrator could designate a category of 
nonmajor sources to be subject to title V. Finally, facility 
modifications may increase a source's potential to emit to above the 
major source level, thus making a source newly subject to title V. For 
these reasons, NDEP's regulation must be revised for full approval.
6. Permit Shield
    NDEP disputed EPA's comment in the NPRM that the program's permit 
shield provisions are deficient. Because a permit shield may insulate a 
source from enforcement, it is essential for EPA and the public to know 
when a permit shield is in the permit and exactly which conditions the 
permit shield is covering. According to NDEP's regulation, permits may 
be written to provide the benefits of a permit shield without expressly 
stating that a permit shield exists. This approach is plainly 
inconsistent with Sec. 70.6(f)(2) which states that: ``[a] part 70 
permit that does not expressly state that a permit shield exists shall 
be presumed not to provide such a shield.'' NDEP must make all the 
changes identified in the proposed notice in order to have fully 
approvable permit shield provisions.
7. Emissions Trading
    NDEP commented that it does not intend to provide the emissions 
trading opportunity specified in Sec. 70.6(a)(10) and that it intends 
to remove the existing provisions for trading under a federally 
enforceable emissions cap, which are now located in NAC 445B.316.1(g) 
(previously NAC 445.7114.1(g)) and which satisfy the requirements of 
Sec. 70.4(b)(12)(iii). Consequently, NDEP indicated that it will not 
correct the regulatory deficiencies with regard to trading identified 
in the proposed approval notice under section II.B.1.(9). NDEP noted, 
however, that it will allow trading as an alternative operating 
scenario.
    The federal part 70 regulation does not give states discretion 
about whether to allow the emissions trading provisions of 
Secs. 70.6(a)(10) and 70.4(b)(12)(iii). First, Sec. 70.6(a)(10) says 
that the permitting authority cannot deny trading opportunities where 
such opportunities are provided by the underlying applicable 
requirement. For instance, if NDEP permits a source subject to the 
Hazardous Organic NESHAP (HON), which allows for trading without a 
case-by-case approval, and the source requests to take advantage of the 
trading provisions of the HON, then NDEP must establish trading terms 
and conditions in the source's permit. Second, Sec. 70.4(b)(12)(iii) 
states that the permitting authority ``shall'' allow for trading under 
a federally enforceable emissions cap. In the proposed approval, EPA 
relied on NAC 445.7114.1(g) to satisfy the requirements for trading 
under a federally enforceable emissions cap. If NDEP removes such 
trading provisions from its program, the program will become deficient 
with regard to operational flexibility. Moreover, EPA is not convinced 
that NDEP's alternative operating scenario provisions provide an 
adequate framework for these types of trading opportunities.

B. Final Action

1. Title V Operating Permits Program
    The EPA is promulgating interim approval of NDEP's title V 
operating permits program as submitted on February 8, 1995. In order to 
receive full approval, NDEP must correct the ten program deficiencies 
listed in the proposed interim approval document under section 
II.B.1.(1, 3-11) 1 as well as one additional deficiency regarding 
the unpermittable status of agricultural and food processing activities 
which was identified as a result of public comment and is discussed 
above in section II.A.1.

    \1\  Please see the proposed interim approval document (60 FR 
40143-40144, August 7, 1995) for a list of changes that must be made 
in order for NDEP's program to be fully approvable.
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    The scope of NDEP's part 70 program approved in this notice applies 
to all sources under NDEP's jurisdiction. It does not apply to 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 Act; see also 
59 FR 43956, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 21, 1993).
    This interim approval, which may not be renewed, extends until 
January 12, 1998. The specific conditions of the interim approval, 
NDEP's obligation to submit a complete corrective program, and the 
potential use of sanctions were set out in the proposed notice (60 FR 
40140, August 7, 1995, section I.B.) and will not be repeated in this 
document.
2. State Preconstruction Permit Program Implementing Section 112(g)
    EPA is approving the use of NDEP's integrated preconstruction/
operating permit program as a mechanism to implement section 112(g) 
during the transition period between promulgation of EPA's section 
112(g) rule and adoption by NDEP of rules specifically designed to 
implement section 112(g). 

[[Page 63634]]
EPA is limiting the duration of this approval to 18 months following 
promulgation by EPA of the section 112(g) rule.
3. Program for Delegation of Section 112 Standards as Promulgated
    EPA is promulgating approval under section 112(l)(5) and 40 CFR 
section 63.91 of NDEP's program for receiving delegation of section 112 
standards that are unchanged from federal standards as promulgated. EPA 
is approving NDEP's delegation mechanism for part 70 and non-part 70 
sources.

III. Administrative Requirements

A. Docket

    Copies of NDEP's submittal and other information relied upon for 
the final interim approval, including public comment letters received 
and reviewed by EPA on the proposal, are contained in docket number NV-
DEP-95-1-OPS 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 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 
review under 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 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

    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 approval action promulgated today does not include a federal 
mandate that may result in estimated costs of $100 million or more to 
either state, local, or tribal governments in the aggregate, or to the 
private sector. This federal action approves pre-existing requirements 
under state or local law, and imposes no new federal requirements. 
Accordingly, no additional costs to state, local, or tribal 
governments, or to the private sector, result from this action.

List of Subjects in 40 CFR Part 70

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

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

    Dated: December 1, 1995.
Felicia Marcus,
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 paragraph (a) to the 
entry for Nevada:

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

* * * * *
    The following state program was submitted by the Nevada Division of 
Environmental Protection:
    (a) Nevada Division of Environmental Protection: submitted on 
February 8, 1995; interim approval effective on January 11, 1996; 
interim approval expires January 12, 1998.
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[FR Doc. 95-30261 Filed 12-11-95; 8:45 am]
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