[Federal Register Volume 60, Number 241 (Friday, December 15, 1995)]
[Proposed Rules]
[Pages 64403-64407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30554]



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[[Page 64404]]


ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5346-6]


Clean Air Act (CAA) Proposed Interim Approval of Operating 
Permits Program and Delegation of 112(l) Authority; State of Missouri

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the operating permits 
program submitted by the state of Missouri for the purpose of complying 
with Federal requirements for states which develop, and submit to EPA, 
programs for issuing operating permits to all major stationary sources 
and to certain other sources. This notice explains EPAs rationale for 
the proposed action, and identifies revisions to the program which must 
be made before EPA can take final action to fully approve it.

DATES: Comments on this proposed action must be received in writing by 
January 16, 1996.
ADDRESSES: Comments should be addressed to Joshua A. Tapp, U.S. 
Environmental Protection Agency, Region VII, Air Branch, 726 Minnesota 
Avenue, Kansas City, Kansas 66101.
    Copies of the Missouri submittal and other supporting information 
used in developing the proposed interim approval are available for 
inspection during normal business hours at the U.S. Environmental 
Protection Agency, Region VII, Air Branch, 726 Minnesota Avenue, Kansas 
City, Kansas 66101.

FOR FURTHER INFORMATION CONTACT: Joshua Tapp at (913) 551-7606.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    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 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 one 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 two years. If EPA has not fully approved a program by 
two years after the November 15, 1993, date, or by the end of an 
interim period, it must establish and implement a Federal program.

B. Federal Oversight and Sanctions

    If EPA were to finalize this proposed interim approval, it would 
extend for 18 months following the effective date of final interim 
approval and could not be renewed. During the interim approval period, 
the state of Missouri would be protected from sanctions for failure to 
have an approved program, and EPA would not be obligated to promulgate, 
administer, and enforce a Federal permits program for Missouri. 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 interim approval, as does the three-year time period for processing 
the initial permit applications.
    Following the final interim approval, if Missouri has failed to 
submit a complete corrective program for full approval by the date six 
months before expiration of the interim approval, an 18-month clock for 
mandatory sanctions would commence. If Missouri then failed to submit a 
corrective program that EPA found complete before the expiration of 
that 18-month period, EPA would apply sanctions as required by section 
502(d)(2) of the Act, which would remain in effect until EPA determined 
that the state of Missouri had corrected the deficiency by submitting a 
complete corrective program.
    If, following final interim approval, EPA were to disapprove 
Missouri's complete corrective program, EPA would be required under 
section 502(d)(2) to apply sanctions on the date 18 months after the 
effective date of the disapproval, unless prior to that date Missouri 
had submitted a revised program and EPA had determined that it 
corrected the deficiencies that prompted the disapproval.
    If EPA has not granted full approval to Missouri's program by the 
expiration of an interim approval, EPA must promulgate, administer, and 
enforce a Federal permits program for Missouri upon interim approval 
expiration.

II. Proposed Action and Implications

A. Analysis of Submission by State Authority

    The analysis contained in this notice focuses on specific elements 
of the Missouri Department of Natural Resources (MDNR) Title V 
operating permits program that must be corrected to meet the minimum 
requirements of part 70. The full program submittal; the Technical 
Support Document (TSD), which contains a detailed analysis of the 
submittal; and other relevant materials are available for inspection as 
part of the public docket. The docket may be viewed during regular 
business hours at the address listed above.

1. Support Materials

    The Governor of Missouri submitted an administratively and 
technically complete Title V Operating Permit Program on January 13, 
1995. The EPA deemed the program submittal complete on March 2, 1995. 
At EPA's request, the State provided supplemental program information 
on August 14, 1995; September 19, 1995; and October 16, 1995.
    The program submittal includes a legal opinion from the Attorney 
General of Missouri stating that the laws of the State provide adequate 
legal authority to carry out all aspects of the program, and a 
description of how the state intends to implement the program. The 
submittal additionally contains evidence of proper adoption of the 
program regulations, permit application forms, a data management 
system, and a permit fee demonstration.
2. Program Description
    The Governor's letter states that the entire geography of Missouri 
will be covered by this program. There are no Indian tribal lands in 
Missouri. The letter also states that MDNR will be the official 
permitting authority responsible for implementation of the program. 
Finally, the state requested approval and delegation of authority to 
implement section 112(l) of the Act.
    In addition to the state's part 70 permit rules, the state has 
established a State Implementation Plan (SIP) based permit system for 
creating Federally enforceable limitations, called the intermediate 
program. This permit mechanism will allow qualifying sources to avoid 
having to obtain a part 

[[Page 64405]]
70 operating permit. The EPA published a direct final approval of this 
program in the Federal Register on September 25, 1995 (60 FR 49340). 
Finally, Missouri will issue a third class of permit to all other air 
emission sources that meet or exceed the de minimis levels, yet fall 
below the major source threshold. This third class of source will 
require a basic permit. The basic operating permit program is not a 
Federal program and has not been submitted to EPA for approval.
    The state has been collecting emission fees for two years, which 
have been used for ``ramp-up'' activities, including the hiring of 
additional staff. The state emissions fee is currently set at $25.70 
per ton, which may be adjusted by the Missouri Air Conservation 
Commission through an administrative revision of rule 10 CSR 10-6.110. 
The state provided a resource demonstration, discussed later, to 
justify deviating from the presumptive minimum of $25 per ton, Consumer 
Price Index (CPI) adjusted. The state is also authorized under its 
statute to collect fees for non-Title V program activities.
    The program submittal also contains information on the 
organizational structure and function of the components of the air 
program, including the regional and local offices which are available 
to assist in implementation of the program.
3. Regulations and Program Implementation
    The Missouri program, including the core operating permit 
regulations, 10-CSR 6.065 (Division 10, Chapter 6, MDNR) substantially 
meets the minimum requirements for interim approval as they are denoted 
in 40 CFR part 70.4(d)(3). These requirements pertain to: (1) Adequate 
fees, (2) applicable requirements, (3) fixed terms, (4) public 
participation, (5) EPA and affected state review, (6) permit issuance, 
(7) enforcement, (8) operational flexibility, (9) streamlined 
procedures, (10) permit application, and (11) alternative scenarios.
    However, Missouri must make the following program revisions for 
full approval: (1) Revise its definitions rule, 10 CSR 10-6.020 to: (a) 
revise (2)(I)7 to update a reference to the Standard Industrial 
Classification Manual, and (b) revise (3)(B), Table 2--List of Named 
Installations, to make it consistent with the list in the definition of 
major source in 70.2; (2) revise rule 10 CSR 10-6.065, Operating 
Permits by: (a) revising (1)(D)2 to clarify the meaning of ``fugitive 
air pollutant'' as it relates to part 70 installations; (b) revise 
(3)(D) to clarify part 70 applicability with respect to emissions from 
exempt installations and emission units; (c) revise (6)(C)1.C.(II)(b) 
to clarify the retention of record requirements in permits, consistent 
with 70.6(a)(3); (d) revise (6)(C)1.G.(I) to clarify the general 
requirements for permit compliance and noncompliance, consistent with 
70.6(a)(6); (e) revise (6)(C)4.A. to correct a citation error and to 
clarify that the requirement for EPA and affected state review applies 
to general permits, consistent with 70.6(d)(1); (f) revise 
(6)(C)7.B.(IV) to make the emergency provision notice consistent with 
70.6(g)(3); (g) revise (6)(C)8, operational flexibility provisions, to 
clarify the term ``emissions allowable under the permit''; (h) revise 
(6)(E)5.B.(I), minor permit modification criteria, to be consistent 
with 70.7(e)(2)(I)(A)(3); (i) revise (6)(E)5.B.(I) to add a paragraph 
(b) to incorporate the economic incentive provisions consistent with 
70.7(e)(2)(I)(B); (j) revise (6)(E)5.C.(I)(b) to correct the threshold 
for group processing of minor permit modifications to be consistent 
with 70.7(e)(2)(I)(B); and (k) revise (6)(E)5.D.(II)(a), significant 
permit modification procedures, to be consistent with 70.4(b)(2) and 
70.5(c), and make minor citation corrections to rules (6)(B)3.I.(IV), 
(6)(E)5.B.(II)(a), (6)(E)5.C.(V), and (6)(E)6.C. A detailed discussion 
of the necessary rule revisions is included in the TSD, and in the 
docket for this rulemaking. In addition, the rule changes proposed by 
Missouri to meet the requirements noted above are included in the 
docket.
    Missouri has the authority to issue a variance from state 
requirements under section 643.110 of the state statutes. This 
provision was not included by the state in its operating permit program 
submittal, and EPA regards this provision as wholly external to the 
program submitted for approval under part 70, and consequently is 
proposing to take no action on this provision of state law. The EPA has 
no authority to approve provisions of state law, such as the variance 
provision referred to, which are inconsistent with the Act. The EPA 
does not recognize the ability of a permitting authority to grant 
relief from the duty to obtain or 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 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.''
4. Fee Demonstration
    The state provided a detailed fee demonstration because the 
emissions fee, $25.70 per ton (not adjusted), is below the presumptive 
minimum of $25 plus CPI. The fee demonstration included a detailed 
analysis of projected hourly program requirements and costs for each of 
the next four years. An emission inventory of Title V sources for two 
preceding years (1993 and 1994) and emissions fees collected was also 
provided. Missouri describes a cash receipts system that identifies 
Title V fee receipts, a time accounting system that tracks Title V 
program labor costs, and an accounts payable system that tracks Title V 
program expenses.
5. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority and/or commitments for section 112 implementation. 
Missouri has demonstrated in its program submittal adequate legal 
authority to implement and enforce all section 112 requirements through 
the Title V permit. This legal authority is contained in Missouri's 
enabling legislation and in regulatory provisions defining ``applicable 
requirements,'' and states that the permit must incorporate all 
applicable requirements. EPA has determined that this legal authority 
is sufficient to allow Missouri to issue permits that ensure compliance 
with all section 112 requirements. The EPA is interpreting the above 
legal authority to mean that Missouri is able to carry out all section 
112 activities. For further rationale on this interpretation, please 
refer to the TSD accompanying this rulemaking and the April 13, 1993, 
guidance memorandum titled ``Title V Program Approval Criteria for 
Section 112 Activities,'' signed by John Seitz.
    b. Section 112(g) Case-by-Case Maximum Achievable Control 
Technology (MACT) For Modified/Constructed and Reconstructed Major 
Toxic Sources.
    The EPA issued an interpretive notice on February 14, 1995 (60 FR 
8333), which outlines EPA's revised interpretation of 112(g) 
applicability. 

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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 postponement of section 112(g), Missouri must have a 
Federally enforceable mechanism for implementing section 112(g) during 
the period between promulgation of the Federal section 112(g) rule and 
adoption of implementing Federal regulations.
    The EPA is aware that Missouri lacks a program designed 
specifically to implement section 112(g). However, Missouri does have a 
program for review of new and modified hazardous air pollutant sources 
that can serve as an adequate implementation vehicle during the 
transition period, because it would allow Missouri to select control 
measures that would meet MACT, as defined in section 112, and 
incorporate these measures into a Federally enforceable preconstruction 
permit.
    The EPA is proposing to approve Missouri's preconstruction 
permitting 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 state rule implementing EPA's section 112(g) regulations. Although 
section 112(l) generally provides authority for approval of state 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 purposes 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 state regulations are adopted. The 
duration of this approval is limited to 18 months following 
promulgation by EPA of the 112(g) rule to provide adequate time for the 
state to adopt regulations consistent with the Federal requirements.
    c. Section 112(l)--State Air Toxics Programs.
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
section 112(l)(5) approval requirements for delegation of section 112 
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. 
Missouri has demonstrated that it meets these requirements. Therefore, 
EPA is proposing to grant approval under section 112(l)(5) and 40 CFR 
part 63.91 to Missouri 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. 
Missouri has informed EPA that it intends to accept delegation of 
section 112 standards through adoption by reference. In addition, EPA 
is also proposing delegation of all existing standards and programs 
under 40 CFR parts 61 and 63 for part 70 and non-part 70 sources.
    d. Title IV/Acid Rain. The legal requirements for approval under 
the Title V operating permits program for a Title IV program were cited 
in EPA guidance distributed on May 21, 1993, titled ``Title V-Title IV 
Interface Guidance for States.'' Missouri has met the criteria of this 
guidance and has adopted by reference acid rain rules at 40 CFR 72.

B. Options for Approval/Disapproval and Implications

    1. The EPA is proposing to grant interim approval for two years to 
the operating permits program submitted by the state of Missouri. In 
order to receive full approval, the state must adopt and submit to the 
EPA the rule changes identified above within 18 months of receiving 
final interim approval. Specifically, the state must amend rules 10 CSR 
10-6.020, Definitions, and 10 CSR 10-6.065, Operating permits, for 
consistency with part 70.
    2. Program for Straight Delegation of Section 112 Standards.
    As discussed above, EPA is proposing to grant approval under 
section 112(l)(5) and 40 CFR part 63.91 to Missouri 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. In addition, EPA proposes to delegate 
existing standards under 40 CFR parts 61 and 63 for both part 70 and 
non-part 70 sources.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of the state's submittal and other information 
relied upon for the proposed approval are contained in a docket 
maintained at 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 interim 
approval. The principal purposes of the docket are:
    1. To allow interested parties a means to identify and locate 
documents for participating in the rulemaking process, and
    2. To serve as the record in case of judicial review. The EPA will 
consider any comments received by Janaury 16, 1996.

B. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
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

    Under sections 202, 203, and 205 of the Unfunded Mandates Reform 
Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22, 
1995, EPA must undertake various actions in association with proposed 
or final rules that include a Federal mandate that may result in 
estimated costs of $100 million or more to the private sector, or to 
state, local, or tribal governments in the aggregate.
    Through submission of this state operating permit program the state 
has elected to adopt the program provided for under Title V of the CAA. 
These rules may bind the state government to perform certain actions 
and also require the private sector to perform certain duties. To the 
extent that the rules being proposed for approval by this action will 
impose new requirements, sources are already subject to these 
regulations under state law. Accordingly, no additional costs to state, 
local, or tribal governments, or to the private sector, result from 
this action. The EPA has 

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also determined that this proposed action does not include a 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.

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. sections 7401-7671q.

    Dated: December 6, 1995.
Dennis Grams,
Regional Administrator.
[FR Doc. 95-30554 Filed 12-14-95; 8:45 am]
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