[Federal Register Volume 61, Number 38 (Monday, February 26, 1996)]
[Rules and Regulations]
[Pages 7073-7076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4255]



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


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[PR001; FRL-5428-8]


Clean Air Act Final Full Approval of Operating Permits Program: 
The Commonwealth of Puerto Rico

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final full approval.

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

SUMMARY: The EPA is promulgating full approval of the operating permits 
program submitted by the Commonwealth of Puerto Rico for the purpose of 
complying with Federal requirements which mandate that States develop, 
and submit to EPA, programs for issuing operating permits to all major 
stationary sources, and to certain other sources.

EFFECTIVE DATE: This action is effective March 27, 1996.

ADDRESSES: Copies of the State's submittal and other supporting 
information used in developing the final 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, extension 223.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    Title V of the Clean Air Act (``the Act''), and implementing 
regulations at 40 Code of Federal Regulations (CFR) part 70 require 
that States develop and submit operating permits programs to the EPA by 
November 15, 1993, and that the 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. If a state does not have an approved program by two years 
after the November 15, 1993 date, EPA must establish and implement a 
Federal program.
    On November 14, 1995, the EPA proposed full approval of the 
Operating Permits Program submitted for Puerto Rico. (See 60 FR 57204). 
Two comment letters were received on the Proposed Approval Notice. None 
of the comments regarded EPA's proposed approval of Puerto Rico's Title 
V program; in fact, both commenters supported EPA's proposed full 
approval. The comments, 

[[Page 7074]]
however, deal with implementation of the program and EPA's responses 
are below. In this notice, the EPA is taking final action to promulgate 
full approval of the Operating Permits Program for Puerto Rico.

II. Final Action and Implications

A. Analysis of State Submission

    On November 14, 1995, the EPA proposed full approval of PREQB's 
Title V Operating Permits Program. The program elements discussed in 
the proposed notice are unchanged from the analysis in the Full 
Approval Notice and continue to fully meet the requirements of 40 CFR 
part 70.

B. Response to Public Comments

1. Comment by Eli Lilly and Company
    Eli Lilly and Company (Lilly) asked EPA to clarify that the terms 
``modifications under any provision of Title I of the Act'' and ``case 
by case determination'' as they appear in Puerto Rico's Title V 
regulation (Part VI of the Regulation for the Control of Atmospheric 
Pollution (RCAP)) do not include minor new source review requirements. 
As stated by Lilly, in both a June 20, 1995 letter from Mary Nichols, 
Assistant Administrator for Air and Radiation, to members of Congress 
and a November 7, 1995 letter from Lydia Wegman, Deputy Director of the 
Office of Air Quality Planning and Standards, to William Becker of 
STAPPA/ALAPCO, the EPA has clarified that EPA's current interpretation 
of Title I modification does not include modifications subject to minor 
new source review. While the Puerto Rico Environmental Quality Board 
(PREQB) did not define Title I modification in its regulation, by 
letter dated January 24, 1996, PREQB confirmed that it plans to follow 
EPA's current interpretation of Title I modification. PREQB, therefore, 
does not consider modifications subject to its minor new source review 
program to be Title I modifications. Accordingly, under Puerto Rico's 
Title V program, changes subject to minor new source review can be 
processed following minor modification procedures (See RCAP Rule 
606(b)(2)) and are eligible for the operational flexibility provisions 
of RCAP Rule 607 provided the changes meet the other eligibility 
criteria of RCAP Rules 606(b)(2) and 607.
2. Comment by the Puerto Rico Manufacturer's Association
    The Puerto Rico Manufacturer's Association (PRMA) raised several 
questions regarding implementation of the Title V program.
    a. The PRMA requested that PREQB adopt EPA's July 10, 1995 ``White 
Paper for Streamlined Development of Part 70 Permit Applications'' 
(``White Paper'') as part of the Title V approval process in order to 
provide sources a clear and duly notified directive and to avoid random 
application of the White Paper. PRMA requested that EPA Region II 
assist PREQB in the implementation of Puerto Rico's Title V program 
consistent with the White Paper guidelines.
    Although EPA encourages states to implement the White Paper, EPA 
does not require a state to adopt the White Paper as part of EPA's 
program approval. The White Paper was drafted as guidance and, 
therefore, cannot be relied upon to create any rights enforceable by 
any party. Nevertheless, PREQB has ``adopted'' the White Paper. In 
other words, PREQB has included the White Paper as part of its Title V 
docket and has committed, at least during the early phases of program 
implementation, to follow all the guidelines of the White Paper. The 
EPA does agree with the commenter that EPA should work with Puerto Rico 
on the implementation of the Program consistent with the White Paper 
and EPA will work closely with PREQB (as well as the PRMA) on this 
streamlined implementation.
    b. The PRMA proposed that the current state operating permits which 
Title V applicants are complying with (issued under RCAP Rule 204) be 
presumptively defined to incorporate new source review (NSR) permit 
terms and conditions. Because PREQB often revises the operating permit 
without first reviewing the terms of the corresponding preconstruction 
permit, this practice has resulted in operating permits with terms and 
conditions which supersede and render obsolete the original 
preconstruction permits. In addition, searching for the old NSR permits 
would be extremely burdensome to both PREQB and the applicant.
    The EPA agrees that for minor NSR requirements, applicants and 
PREQB can use the existing state operating permits in lieu of minor NSR 
permits in defining the applicable requirements under minor New Source 
Review. PREQB's practice is that the minor NSR permit expires after one 
year and all conditions roll into the operating permit, and then only 
the operating permit conditions are revised as a result of plant 
modifications. Therefore, it would be impractical to require applicants 
to use only minor NSR permits, instead of the operating permits, as the 
basis for determining their applicable requirements. EPA supports 
PRMA's suggestion and has stated on page 15 of the White Paper: ``Where 
a permitting authority has already converted the NSR permit into an 
existing State operating permit before incorporation into the part 70 
permit, the terms of the current permit to operate will presumptively 
define how NSR permit terms should be incorporated into part 70 
permits.'' However, this flexibility does not necessarily apply to 
Major NSR and PSD or to minor NSR permits which were used in a final 
PSD non-applicability determination. First, if there are 
inconsistencies between the source's operating permit and a Major NSR 
or PSD permit, the conditions in the NSR or PSD permit take precedence 
and must be included as an applicable requirement in the source's Title 
V application. Second, the flexibility to use the state operating 
permit in lieu of the minor NSR permit to define the applicable 
requirement when the minor NSR permit was used in a final PSD non-
applicability determination will be decided on a case by case basis.
    c. The PRMA suggested that current operating permit terms that are 
environmentally insignificant and irrelevant and are not required under 
federal laws or regulations or under federally enforceable conditions 
of the RCAP (``the SIP'') should be considered as appropriate 
exclusions from part 70 permits (or could remain on the state-only side 
of part 70 permits). PRMA also suggested that current operating permit 
conditions that do not implement federal regulatory requirements and 
objectives, or that may have been provided in good faith by sources in 
permit applications, are also good candidates for exclusion from part 
70 permits.
    As correctly cited by PRMA, the White Paper states that NSR permit 
terms (or operating permit terms if being used in lieu of a minor NSR 
permit) that are obsolete, extraneous, environmentally insignificant or 
otherwise not required by the SIP or a federally enforceable NSR 
program need not be incorporated into part 70 permits. The White Paper 
also explains and provides examples of the above types of permit 
conditions. For instance, NSR terms regulating construction activity 
during the building or modification of a source, where the construction 
is long completed and the statute of limitations on construction-phase 
activities has run out, may no longer be necessary for inclusion in a 
part 70 permit. Another example of information that may not need to be 
incorporated into a part 70 permit is information incorporated by 
reference from an application for a 

[[Page 7075]]
preconstruction permit, as long as this information is not needed to 
enforce NSR permit terms. The White Paper states that sources as part 
of their Title V application could propose which conditions of the 
minor NSR permit (or operating permit if being used in lieu of minor 
NSR permit) should be considered for revision, deletion or state-only 
status. PREQB could then agree or disagree with the suggestions while 
reviewing and drafting the permit (note: this process could be delayed 
until the first renewal if necessary). PREQB as part of its issuance of 
the part 70 permit (including the public participation process) could 
then simultaneously revise the minor NSR (or operating) permit. As a 
note, EPA does not believe that most of Puerto Rico's operating permits 
include irrelevant or extraneous terms. EPA believes there should only 
be a few cases where the procedure discussed in the White Paper will 
take place. Because most decisions will need to be made on a case by 
case basis, EPA will work closely with PREQB on the issuance of these 
permits. It should be noted that PSD permits are not minor NSR permits. 
If any applicant believes their PSD permit contains extraneous 
conditions, the applicant must request a revision of the PSD permit 
from EPA (the permitting authority for PSD in Puerto Rico) before 
excluding the condition from its Title V application.
    d. The PRMA requested that certain rules of the RCAP which are 
currently included as part of Puerto Rico's approved SIP be considered 
state enforceable only as those rules are not necessary for Puerto 
Rico's strategy to achieve and maintain compliance with the National 
Ambient Air Quality Standards. The rules suggested for deletion include 
Rule 404--Fugitive Emissions, Rule 411--Hydrogen Sulfide, Rule 418--
Waste Gas Disposal, Rule 419--Volatile Organic Compounds, Rule 420--
Objectionable Odors, Rule 421--Increment Of Progress, and Rule 424--
Roof Surface Coating.
    With Puerto Rico's submittal of the revised RCAP for approval into 
the SIP, Puerto Rico requested that the above rules be deleted from the 
SIP. The EPA agrees that all the above rules except Rule 404 should be 
state enforceable only. Rule 404 is required for compliance with Puerto 
Rico's PM-10 SIP (See 60 FR 28333, May 31, 1995). EPA plans to delete 
Rules 411, 418, 419, 420, and 421 from the SIP when EPA makes its final 
SIP determination on the revised RCAP. Rule 424 on Roof Surface Coating 
was never approved into the SIP and is currently state enforceable 
only. In the meantime, while EPA processes Puerto Rico's regulation for 
SIP approval, applicants can, for purpose of application completeness, 
propose to address requirements of Rules 411, 418, 419, 420, and 421 as 
state enforceable only. If requesting that the conditions of these 5 
rules be state enforceable only, applicants should provide a notation 
in their application which states ``pending deletion from the SIP''. 
However, PREQB may not issue Title V permits with state enforceable 
only conditions for these five rules until after EPA has approved 
Puerto Rico's SIP revision. EPA will expedite the processing of this 
SIP in order not to adversely impact Puerto Rico's schedule for issuing 
permits.

C. Options for Approval/Disapproval

    The EPA is promulgating full approval of the Operating Permits 
Program submitted to the EPA by the PREQB on November 15, 1993 with 
supplemental packages on March 22, 1994 and April 11, 1994 and a 
revised regulation on September 29, 1995. Among other things, the PREQB 
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 Sec. 70.4(b), 
encompass section 112(l)(5) requirements for approval of a program for 
delegation of section 112 standards as promulgated by the 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, an expeditious compliance schedule, and adequate 
enforcement ability, which are also requirements under part 70. In a 
letter dated December 29, 1994, PREQB 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, PREQB 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 also promulgating full 
approval under section 112(l)(5) and 40 CFR part 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.

III. Administrative Requirements

A. Docket

    Copies of the State's submittal and other information relied upon 
for the final full approval, including the public comments received and 
reviewed by EPA on the proposal, are contained in the docket maintained 
at the EPA Regional Offices in New York and Puerto Rico and at PREQB. 
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 full 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

    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 Section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, the 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, the 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 of the Unfunded Mandates Act 
requires the EPA to establish a plan for informing and advising any 
small governments that may be significantly or uniquely impacted by the 
rule.
    The 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 

[[Page 7076]]
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: February 6, 1996.
Jeanne M. Fox,
Regional Administrator.

    40 CFR part 70 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 Puerto 
Rico in alphabetical order to read as follows:

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

* * * * *

Puerto Rico

    (a) The Puerto Rico Environmental Quality Board submitted an 
operating permits program on November 15, 1993 with supplements on 
March 22, 1994 and April 11, 1994 and revised on September 29, 1995; 
full approval effective on March 27, 1996.
    (b) [Reserved]
* * * * *
[FR Doc. 96-4255 Filed 2-23-96; 8:45 am]
BILLING CODE 6560-50-P