[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9125-9132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5415]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 70

[PA65-1; AD-FRL-5436-7]


Clean Air Act Proposed Full Approval of the Operating Permits 
Program; Approval of Construction Permit and Plan Approval Programs 
Under Section 112(l); Proposed Approval of State Implementation Plan 
Revision for the Issuance of Federally Enforceable State Plan Approval 
and Operating Permits Under Section 110; Commonwealth of Pennsylvania

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed full approval of Title V Operating Permit Program and 
proposed approval of State Operating Permit and Plan Approval Programs.

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SUMMARY: The EPA proposes full approval, under Title V of the Clean Air 
Act (the Act), of the Operating Permits Program submitted by the 
Commonwealth of Pennsylvania 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. EPA is 
also proposing to approve Pennsylvania's Operating Permit and Plan 
Approval Programs pursuant to Section 110 of the Act for the purpose of 
creating Federally enforceable operating permit and plan approval 
conditions for sources of criteria air pollutants. In order to extend 
the federal enforceability of State operating permits and plan 
approvals to include hazardous air pollutants (HAPs), EPA is also 
proposing approval of Pennsylvania's plan approval and operating 
permits program regulations pursuant to Section 112 of the Act. Today's 
action also proposes approval of Pennsylvania's mechanism for receiving 
straight delegation of Section 112 standards.

DATES: Comments on this proposed action must be received in writing by 
April 8, 1996.

ADDRESSES: Comments should be addressed to the contact indicated below. 
Copies of the State's submittal and other supporting information used 
in developing these proposed approvals are available for inspection 
during normal business hours at the following location: U.S. 
Environmental Protection Agency, Region 3, 841 Chestnut Building, 
Philadelphia, Pennsylvania 19107.

FOR FURTHER INFORMATION CONTACT: Michael H. Markowski, 3AT23, U.S.

[[Page 9126]]

Environmental Protection Agency, Region 3, 841 Chestnut Building, 
Philadelphia, Pennsylvania, 19107, (215) 597-3023.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under Title V of the 1990 Clean Air Act Amendments 
(sections 501-507 of the Clean Air Act (``the Act'')), EPA has 
promulgated rules which define the minimum elements of an approvable 
State operating permits program and the corresponding standards and 
procedures by which the EPA will approve, oversee, and withdraw 
approval of State operating permits programs (see 57 FR 32250 (July 21, 
1992)). These rules are codified at 40 Code of Federal Regulations 
(CFR) part 70. Title V requires States to develop, and submit to EPA, 
programs for issuing these operating permits to all major stationary 
sources and to certain other sources.
    The Act requires that states develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within 1 year after receiving the submittal. The EPA's 
program review occurs pursuant to section 502 of the Act and the part 
70 regulations, which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, EPA may grant the program interim approval for 
a period of up to 2 years. If EPA has not fully approved a program by 2 
years after the November 15, 1993 date, or by the end of an interim 
program, it must establish and implement a Federal program.
    On June 28, 1989 (54 FR 27274) EPA published criteria for approving 
and incorporating into the SIP regulatory programs for the issuance of 
federally enforceable state operating permits. Permits issued pursuant 
to an operating permit program meeting these criteria and approved into 
the SIP are considered federally enforceable. EPA has encouraged States 
to consider developing such programs in conjunction with Title V 
operating permit programs for the purpose of creating federally 
enforceable limits on a source's potential to emit. This mechanism 
would enable sources to reduce their potential to emit of criteria 
pollutants to below the Title V applicability thresholds and avoid 
being subject to Title V. (See the guidance document entitled, 
``Limitation of Potential to Emit with Respect to Title V Applicability 
Thresholds,'' dated September 18, 1992, from John Calcagni, Director of 
EPA's Air Quality Management Division).
    Also as part of this action, EPA is proposing to approve 
Pennsylvania's plan approval (i.e., construction permit) and operating 
permit programs pursuant to Section 112(l) of the Clean Air Act for the 
purpose of allowing the State to issue plan approvals and operating 
permits which limit source's potential to emit hazardous air pollutants 
(HAPs). Section 112(l) of the Clean Air Act provides the underlying 
authority for controlling emissions of HAPs. Therefore, in order to 
extend federal enforceability of the State's operating permit and plan 
approval programs to include HAPs, EPA today proposes to approve 
Pennsylvania's plan approval and operating permit program submittals 
pursuant to Section 112(l) of the Act.

II. Proposed Action and Implications

A. Analysis of State Submission

    EPA has concluded that the operating permit program submitted by 
Pennsylvania meets the requirements of Title V and is proposing to 
grant full approval to the program. For more detailed information on 
the analysis of the State's submission, please refer to the technical 
support document (TSD) included in the docket at the address noted 
above.
1. Title V Support Materials
    On November 15, 1993, the Commonwealth of Pennsylvania submitted an 
operating permits program for review by EPA. The submittal was found to 
be administratively incomplete pursuant to 40 CFR 70.4(e)(1) on January 
18, 1994. Additional materials were submitted on May 18, 1995. Based on 
additional information received in the May 18, 1995 submittal, EPA 
found the submittal to be administratively and technically complete on 
May 31, 1995. The Commonwealth submitted supplemental information on 
November 28, 1995. The submittal includes a letter from the Secretary 
of the Department of Environmental Resources, as the designee of the 
Governor of the Commonwealth of Pennsylvania, requesting approval of 
the Commonwealth's Title V program, a legal opinion from the State 
Attorney General stating that the laws of the Commonwealth provide 
adequate legal authority to carry out all aspects of the program, and a 
description of how the Commonwealth intends to implement the program. 
The submittal additionally contains evidence of proper adoption of the 
program regulations, a permit fee demonstration, a description of the 
State's Title V program, and a proposed draft of an implementation 
agreement (IA) to be negotiated between EPA and the Commonwealth of 
Pennsylvania.
2. Title V Operating Permit Program Regulations and Program 
Implementation
    The Commonwealth of Pennsylvania's Title V regulations were adopted 
and became effective on November 26, 1994. They include 25 Pa. Code 
Chapter 127, Subchapters F and G, as well as the definitions provided 
in 25 Pa. Code Chapter 121.1. EPA has determined that these regulations 
``fully meet'' the requirements of 40 CFR Part 70, Sections 70.2 and 
70.3 with respect to applicability; parts 70.4, 70.5, and 70.6 with 
respect to permit content including operational flexibility; part 70.5 
with respect to complete application forms and criteria which define 
insignificant activities; part 70.7 with respect to public 
participation and minor permit modifications; and part 70.11 with 
respect to requirements for enforcement authority. The TSD contains a 
detailed analysis of Pennsylvania's program and describes the manner in 
which the State's program meets all the operating permit program 
requirements of 40 CFR Part 70. However, several issues were identified 
by EPA during its review of Pennsylvania's Title V operating permit 
program which warrant a more detailed discussion and analysis. These 
issues are outlined below.
    a. Absence of Part 70 Emergency Defense Provisions--Pennsylvania 
has incorporated by reference New Source Performance Standards (NSPS), 
National Emission Standards for Hazardous Air Pollutants (NESHAP), and 
Maximum Available Control Technology (MACT) technology-based emissions 
limitations/standards in 25 Pa. Code 122.1, 124.1, and 127.35, 
respectively. Where these technology-based standards incorporate an 
emergency defense, that emergency defense becomes part of Pennsylvania 
law by reference. Pennsylvania's program does not provide for any other 
emergency defense, and does not specifically provide for a Part 70 
emergency defense. While it is true that a specific Part 70 emergency 
defense is lacking, EPA clarified, in its August 31, 1995, supplemental 
Part 70 notice, that ``the Part 70 rule does not require the States to 
adopt the emergency defense. A State may include such a defense in its 
Part 70 program to the extent it finds appropriate, although it may not 
adopt an emergency defense less stringent than that set forth at 40 CFR 
70.6(g).'' 60 FR 45530, 45559. Thus, since State

[[Page 9127]]

adoption of emergency defense provisions under Part 70 is 
discretionary, Pennsylvania's failure to include such a defense in its 
Part 70 program is not inconsistent with 70.6(g).
    b. Origin of and Authority for Permit Terms and Conditions--40 CFR 
70.6(a)(1)(I) requires that each Title V permit, as issued by the 
permitting authority, specify and reference the origin of and authority 
for each permit term or condition, and identify any difference in form 
as compared to the applicable requirement upon which the term or 
condition is based. These requirements for permit content related to 
specification of the origin and authority for permit terms and 
conditions in Title V permits have been met by the Pennsylvania program 
primarily through the language of Section IV.B.16(a)(1) of the 
Commonwealth's Title V program description and through relevant 
provisions of an Implementation Agreement (IA) that has been negotiated 
between EPA and PADEP (the rulemaking docket includes an IA that was 
signed by PADEP on January 31, 1996, and by EPA on February 15, 1996).
    Section IV.B.16(a)(1) of the PADEP's Title V program description 
provides that Title V permit applications shall require sources to 
identify all applicable requirements, including citations to the origin 
of and authority for each requirement. EPA regards this language, along 
with the Title V permit application form itself and the relevant 
provisions of an IA that has been negotiated between EPA and PADEP, as 
sufficient assurance that Pennsylvania's Title V operating permits will 
include citation to the origin of and authority for each permit term 
and condition.
    c. 45 Day EPA Review Prior to Permit Issuance--Under 
Sec. 127.522(f) of the Commonwealth's regulations, EPA is afforded a 45 
day period to review proposed permits for conformity with Clean Air Act 
and Part 70 requirements. Section Sec. 127.522(f) further specifies 
that EPA may veto a permit within this review period.
    It is noted that Sec. 127.522 does not ensure that EPA will have an 
opportunity for a 45 day period of pre-issuance review of permits that 
are revised as a result of the public and affected State's comments. It 
appears that pursuant to Sec. 127.521(d) and (e) and Sec. 127.522(f), 
the 30 day public comment period may commence at the same time as EPA's 
45 day review period. Thus, it is possible that Pennsylvania could 
modify and issue the proposed permit on the basis of public (or 
affected State) comments.
    However, Sec. 127.522(f) does provide that the final permit shall 
be provided to EPA ``upon issuance if material substantive changes are 
made to the proposed permit.'' If EPA objects within 45 days of final 
permit issuance, ``the permit will be revoked.'' Both Section 
IV.B.17(h) of the program description and Sec. 127.522(f) state that if 
EPA objects to the issuance of the final revised permit within 45 days, 
the permit will be revoked. EPA concludes from the regulatory language 
and program description that post-issuance revocation will be 
straightforward and automatic, in the event that EPA objects (within 45 
days of receipt of the revised permit) to permit conditions that result 
from public or affected state comments.
    Provisions defining ``material substantive changes'' are included 
in the IA that has been negotiated between EPA and PADEP. The IA will 
help to clarify the criteria to be used by Pennsylvania in determining 
which final permits must be provided to EPA for post-issuance review. 
Moreover, the IA will confirm that post-issuance permit revocation is 
indeed automatic for revised permits issued by Pennsylvania but 
objected to by EPA within 45 days of issuance.
    EPA believes that the provisions in the regulation and the IA 
regarding EPA review of permits that are revised on the basis of public 
and affected state comments are adequate to protect EPA's oversight 
function.
    d. Insignificant Activities--Under Part 70, EPA may approve as part 
of a State program a list of insignificant activities and emission 
levels which need not be included in permit applications. Pennsylvania 
has not requested EPA approval of such a list of insignificant 
activities or emission levels.
    e. Proposed Exemption from Title V for R&D Facilities--Under 25 Pa. 
Code Sec. 127.502(c) of the Commonwealth's Title V operating permit 
program regulations, Research and Development (R&D) facilities located 
at a Title V facility are not required to be included as part of the 
Title V facility. However, for the purpose of determining Title V 
applicability, emissions from R&D facilities are aggregated with the 
rest of the facility's emissions. R&D facilities are defined in 25 Pa. 
Code Sec. 121.1 as a stationary source whose purpose is to conduct 
research and development of products and processes, or basic research 
``for education or the general advancement of technology and 
knowledge'' under the ``close supervision of technically trained 
personnel.'' R&D facilities may not engage in the manufacture of 
products for commercial sale or internal manufacturing use ``except in 
deminimus amounts on an infrequent basis.'' The emissions from the R&D 
facility must be less than the Title V threshold.
    EPA interprets the Commonwealth's regulations as providing an 
exemption from Title V requirements for co-located R&D facilities. The 
current Part 70 rule does not provide any specific exemption from Title 
V for co-located R&D facilities. However, EPA's August 31, 1995 (60 FR 
45530) and August 29, 1994 supplemental Part 70 notices and the 
preamble to the original Part 70 rule do provide for the separate 
treatment of co-located R&D activities under Title V. In the August 
1995 notice, EPA proposed to revise the Part 70 definition of ``major 
source'' so that R&D activities could be considered separately for the 
purpose of determining whether a source is major. EPA further stated in 
that notice that it believes it appropriate to continue to implement 
the current Part 70 rule to allow for the separate treatment of co-
located R&D activities. Thus, EPA believes that co-located R&D 
facilities may be treated separately for purposes of determining Title 
V applicability, and determining whether the Title V facility and the 
co-located R&D facility are major sources.
    Pursuant to the August 1995 notice, emissions from R&D activities 
need not be aggregated with those of co-located stationary sources 
unless the R&D activities contribute to the product produced or service 
rendered by the co-located sources in a more than deminimus manner. As 
a result of this approach, nonmajor R&D facilities are exempted from 
Title V. The separate treatment of co-located R&D facilities, as 
provided for in EPA's August 1995 notice, exempts non-major R&D 
facilities from Title V since only major sources are required to obtain 
a Title V permit at this time. Under the EPA's August 1995 proposal, 
research and development activities would be required to have a Title V 
permit only if the R&D facility itself were a major source.
    The Sec. 121.1 definition of ``Research and Development Facility'' 
provided in the Commonwealth's regulations is reserved exclusively for 
those research and development activities ``with emissions less than 
the emissions thresholds for a Title V facility.'' Thus, by definition, 
only non-major research and development activities qualify as ``R&D 
facilities'' under the Pennsylvania regulations. Section 127.502(c) of 
the Commonwealth's regulations further requires that emissions from a 
co-located R&D facility be included when evaluating Title V 
applicability. In its

[[Page 9128]]

August 1995 supplemental Part 70 notice, however, EPA proposed to 
exempt non-major R&D facilities not only from Title V applicability but 
also from the need to aggregate emissions from the R&D facility with 
emissions from the Title V facility for the purpose of determining 
whether a major source is present. Therefore, the Pennsylvania Title V 
operating permit program is at least as stringent in this regard than 
is required by EPA for program approval.
    f. Acid Rain Requirements- Section 6.5 of Pennsylvania's Air 
Pollution Control Act (``APCA''), 35 P.S. Sec. 4006.5, and 25 Pa. Code 
Sec. 127.531 contain special operating permit provisions related to 
Title IV of the Clean Air Act, the legislation's ``acid rain'' section. 
In pertinent part, APCA Section 6.5 authorizes DEP to develop an acid 
rain permit program; incorporates the definitions of sections 402 and 
501 of the Clean Air Act; establishes a schedule for permit application 
and compliance plan submission; and establishes certain permit 
requirements for permits concerning sulfur dioxide emissions and 
allowances.
    25 Pa. Code Sec. 127.531 sets out an appropriate schedule for 
submission of acid rain permits and compliance plans (Sec. 127.531(b)); 
provides that the permit application and compliance plan is binding and 
enforceable until permit issuance (Sec. 127.531(c)); requires the 
source to comply with permit conditions ``no later than the date 
required by the Clean Air Act or regulations thereunder'' 
(Sec. 127.531(d)); allows permit revisions any time after submission of 
the application and compliance plan (Sec. 127.531(e)); prohibits 
emissions in excess of allowances or applicable emission limitations, 
premature use of allowances, or contravention of any permit term 
(Sec. 127.531 (f) and (g)); and requires compliance with accounting 
procedures for allowances promulgated under Title IV 
(Sec. 127.531(g)(3)).
    It is noted that Pennsylvania has not directly incorporated by 
reference EPA's Title IV regulations found at 40 CFR Part 72, and has 
not adopted EPA's model rules. However, several regulatory provisions 
require that Pennsylvania's Title V program be operated in accordance 
with the requirements of Title IV and its implementing regulations. 
Section 127.531(a) provides that the acid rain provisions of that 
section ``shall be interpreted in a manner consistent with the Clean 
Air Act and the regulations thereunder.'' Section 127.531(b) requires 
that affected sources submit a permit application and compliance plan 
``that meets the requirements of * * * the Clean Air Act and the 
regulations thereunder.'' Further, the Sec. 121.1 definition of 
``applicable requirements'' for Title V sources includes standards or 
other requirements ``of the acid rain program under Title IV of the 
Clean Air Act * * * or the regulations thereunder.''
    The statute and regulations cited above support the Pennsylvania 
Attorney General's opinion that ``Commonwealth law is consistent with, 
and cannot be used to modify, the Acid Rain requirements of 40 CFR Part 
72.'' Attorney General Opinion at 8-9.
    For additional assurance that Pennsylvania's operating permit 
program will operate in compliance with applicable acid rain 
requirements, the Commonwealth has agreed to accept delegation of the 
applicable provisions of 40 C.F.R. Parts 70, 72, and 78 for the purpose 
of implementing the Title IV requirements of its operating permit 
program. PADEP shall apply these provisions for purposes of 
incorporating Acid Rain program requirements into each affected 
source's operating permit; identifying designated representatives; 
establishing permit application deadlines; issuing, denying, modifying, 
reopening, and renewing permits; establishing compliance plans; 
processing permit appeals; and issuing written exemptions under 40 
C.F.R. Secs. 72.7 and 72.8. This commitment is contained in the IA that 
has been negotiated between EPA and PADEP.
    Furthermore, at EPA's request, Pennsylvania's Title V program 
description has been revised to clarify that the Commonwealth will 
implement its acid rain program in accordance with applicable 
provisions of 40 C.F.R. Parts 70, 72, and 78; and that PADEP will 
perform completeness and substantive reviews of acid rain permit 
applications, and that acid rain permits will be issued in accordance 
with EPA's acid rain permit writer's guidance. The revised program 
description also states Pennsylvania will initiate appropriate 
enforcement activities to compel compliance with permit conditions.
3. Title V Permit Fee Demonstration
    Section 502(b)(3) of the Act requires that each permitting 
authority collect fees sufficient to cover all reasonable direct and 
indirect costs required to develop and administer its Title V operating 
permits program. Each Title V program submittal must contain either a 
detailed demonstration of fee adequacy or a demonstration that 
aggregate fees collected from Title V sources meet or exceed $25 per 
ton of emission per year (adjusted from 1989 by the Consumer Price 
Index (CPI)). The $25 per ton amount is presumed, for program approval, 
to be sufficient to cover all reasonable program costs and is thus 
referred to as the ``presumptive minimum'' [Section 70.9(b)(2)(I)].
    Pennsylvania has opted to make a presumptive minimum fee 
demonstration. Pennsylvania's existing fee schedule, under Section 
127.705 of the Commonwealth's regulations, requires Title V facilities 
to pay an annual Title V emission fee of $37 per ton for each ton of a 
regulated pollutant actually emitted from the facility. This amount 
exceeds the $25 per ton presumptive minimum. Section 127.705 also 
includes a provision that ties the amount of the fee to the Consumer 
Price Index (CPI) as required by 40 CFR 70.9(b)(2)(iv). The $37 per ton 
amount was derived by dividing the total annual estimated Title V 
operating permit program cost by the total annual number of billable 
tons of emissions. Pennsylvania used actual operating hours and 
production rates, and considered in-place control equipment and the 
types of materials processed, stored, or combusted in calculating the 
total actual billable tons figure. EPA has determined that these fees 
will result in collection and retention of revenues sufficient to cover 
the Title V operating permit program costs.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Section 112--Pennsylvania 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 Pennsylvania's enabling legislation (the Air Pollution 
Control Act, ``APCA'') and in regulatory provisions defining 
``applicable requirements'' and ``Title V facility'' and mandating that 
permits must incorporate all applicable requirements. EPA has 
determined that this legal authority is sufficient to allow 
Pennsylvania to issue permits that assure compliance with all section 
112 requirements, and to carry out all section 112 activities, 
including those required under section 112(g). For further rationale on 
this interpretation, please refer to the Technical Support Document 
accompanying this rulemaking and the April 13, 1993 guidance memorandum 
entitled ``Title V Program Approval Criteria for Section 112 
Activities,'' signed by John Seitz, Director of the Office of Air 
Quality Planning and Standards.
    b. Program for Straight Delegation of Section 112 Standards--The 
requirements for approval, specified in 40 CFR 70.4(b), encompass 
section 112(l)(5) requirements for approval of a

[[Page 9129]]

program for delegation of the provisions of 40 CFR part 63, Subpart A, 
and section 112 standards promulgated by EPA as they apply to part 70 
sources, as well as non-part 70 sources. Section 112(l)(5) requires 
that the State's program contain adequate authorities, adequate 
resources for implementation, and an expeditious compliance schedule, 
which are also requirements under part 70. Therefore, EPA is also 
proposing to grant approval under section 112(l)(5) and 40 CFR part 
63.91 of the State's program for receiving delegation of section 112 
standards that are unchanged from the Federal standards as promulgated. 
Because Pennsylvania has historically accepted delegation of Section 
112 standards through automatic delegation, EPA proposes to approve the 
delegation of Section 112 standards and requirements through automatic 
delegation. The details of this delegation mechanism have been set 
forth in an Implementation Agreement (IA) between Pennsylvania and EPA. 
This approval applies to both existing and future standards but is 
limited to sources covered by the Part 70 operating permit program.
    c. Limiting HAP Emissions Through FESOP and Plan Approval 
Programs--As part of this action EPA proposes to approve, pursuant to 
Section 112(l) of the Clean Air Act, the Commonwealth's request for 
authority to regulate HAPs through the issuance of federally 
enforceable State operating permits and plan approvals. As explained 
more fully in the Technical Support Document accompanying this proposed 
rulemaking, EPA proposes to approve and incorporate into the SIP 
Pennsylvania's operating permit and plan approval (i.e., construction 
permit) programs codified in Subchapters F and B, respectively, of the 
PADEP's air quality regulations. This would grant the PADEP authority 
to issue plan approvals and operating permits which limit potential to 
emit of criteria pollutants. However, as part of this action, EPA also 
proposes to approve both State programs under Section 112(l) of the Act 
for the purpose of extending Pennsylvania's authority to create 
federally enforceable limits to include HAPs in addition to criteria 
pollutants. Please refer to the Technical Support Document for a 
thorough analysis of Pennsylvania's operating permit and plan approval 
programs in accordance with applicable federal approval criteria.
    d. Program for Implementing Title IV of the Act--Pennsylvania's 
program contains adequate authority to issue permits which reflect the 
requirements of Title IV of the Act, and Pennsylvania commits to adopt 
the rules and requirements promulgated by EPA to implement an acid rain 
program through the Title V permit.

B. Proposed Action

1. Title V Operating Permits Program
    EPA is proposing full approval of the operating permits program 
submitted to EPA by the Commonwealth of Pennsylvania on May 18, 1995. 
Among other things, Pennsylvania 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. The scope of the Pennsylvania 
program that EPA proposes to approve in this notice would apply to all 
Title V facilities (as defined in the approved program) within the 
Commonwealth of Pennsylvania, except for those areas where a separate 
local agency Title V operating permits program has been approved by 
EPA.
    EPA also proposes approval of Pennsylvania's Plan Approval and 
Operating Permit Programs, found in Subchapters B and F, respectively, 
of Chapter 127 of the State's regulations, under section 112(l) of the 
Act for the purpose of creating Federally enforceable permit conditions 
for sources of hazardous air pollutants (HAPs) listed pursuant to 
Section 112(b) of the Act.
2. Program for Delegation of Section 112 Standards as Promulgated
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
Section 112(l)(5) requirements for approval of a program for delegation 
of section 112 standards as promulgated by EPA as they apply to part 70 
sources. Section 112(l)(5) requires that the State's program contain 
adequate authorities, adequate resources for implementation, and an 
expeditious compliance schedule, which are also requirements under part 
70. Therefore, EPA is also proposing to grant approval under section 
112(l)(5) and 40 CFR part 63.91 of the State's program for receiving 
delegation of section 112 standards that are unchanged from Federal 
standards as promulgated. Because Pennsylvania has historically 
accepted delegation of Section 112 standards through automatic 
delegation, EPA proposes to approve the delegation of Section 112 
standards and requirements through automatic delegation. The details of 
this delegation mechanism are set forth in an Implementation Agreement 
(IA) that has been negotiated between Pennsylvania and EPA. This 
approval applies to both existing and future standards but is limited 
to sources covered by the Part 70 operating permit program.

III. Proposed Approval of State Operating Permit and Plan Approval 
Programs Under Section 110 of the Act

A. Background

    As part of the May 18, 1995 submittal, PADEP submitted to EPA for 
review and approval a revision to its State Implementation Plan (SIP) 
designed to create federally enforceable limits on a source's potential 
to emit. The revision consists of regulations establishing a State 
operating permit program and a plan approval program, codified in 
Subchapters F and B, respectively, of the Commonwealth's air quality 
regulations. Pennsylvania refers to construction permits as ``plan 
approvals.'' The proposed SIP revision generally strengthens the 
Pennsylvania SIP by establishing a comprehensive operating permit and 
plan approval program and by making the operating permit program 
regulations consistent with the Title V operating permit regulations 
codified in Chapter 127, Subchapter G of the Commonwealth's 
regulations.
    Limiting a source's potential to emit to below major source 
thresholds through the use of federally enforceable terms and 
conditions in a State operating permit or plan approval exempts such a 
source from Title V permitting requirements. State operating permit 
programs which have been incorporated into the SIP renders operating 
permits issued pursuant to such a program as federally enforceable, and 
the program itself is referred to as a federally enforceable State 
operating permit program, or ``FESOP'' program. This FESOP mechanism 
will allow sources to reduce their potential to emit to below the Title 
V applicability thresholds and avoid being subject to Title V. 
Similarly, construction permit (i.e., plan approval) programs which 
have been incorporated into the SIP renders construction permits, or, 
in Pennsylvania's case, plan approvals, issued pursuant to such a 
program as federally enforceable.
    Pennsylvania's FESOP and plan approval program regulations were 
adopted and became effective on November 26, 1994. The operating permit 
program regulations are codified under Chapter 127, Subchapter F of the 
Commonwealth's air quality regulations, and the plan approval program 
regulations are codified under Chapter 127, Subchapter B of the 
Commonwealth's air quality regulations.

[[Page 9130]]

EPA found the SIP submittal complete on May 31, 1995.
    EPA's review of this submittal indicates that the operating permit 
and plan approval programs both meet applicable federal criteria for 
approval. Accordingly, EPA is today proposing to approve the 
Pennsylvania SIP revision for the plan approval and operating permit 
programs, which was submitted on May 18, 1995.

B. Federal Criteria for Approval of Pennsylvania's FESOP and Plan 
Approval Programs Pursuant to Section 110 of the Act

    The five criteria for approving a State operating permit program 
into a SIP were set forth in the June 28, 1989 Federal Register 
document (54 FR 27282). Permits issued under an approved program are 
federally enforceable and may be used to limit the potential to emit of 
sources of criteria pollutants. Pennsylvania's FESOP provisions of 
Subchapter F, Chapter 127 meet the June 28, 1989 criteria by ensuring 
that the limits will be permanent, quantifiable, and practically 
enforceable and by providing adequate notice and comment to both EPA 
and the public. Please refer to the Technical Support Document for a 
thorough analysis of the June 28, 1989 criteria as applied to 
Pennsylvania's FESOP program.
    EPA is proposing to approve pursuant to Section 110 of the Act and 
the approval criteria specified in the June 28, 1989 Federal Register 
document the following regulations that were submitted to make permits 
issued pursuant to the Commonwealth's FESOP program federally 
enforceable and to make the program consistent with it's Title V 
operating permit program: Subchapter F, Chapter 127, Sections 127.401 
through 127.464, inclusive.
    As described above, Pennsylvania also submitted on May 18, 1995 for 
EPA approval revisions to its existing new source review (NSR) 
construction permit (i.e., plan approval) program. Pennsylvania's new 
source review construction permit is called a ``plan approval.'' The 
Commonwealth's plan approval program has been part of its SIP for many 
years and meets the requirements in Section 110(a)(2)(C) of the Act 
which requires all SIPs to provide for the regulation of the 
modification and construction of any stationary source within the areas 
covered by the plan implementation as necessary to assure that national 
ambient air quality standards (NAAQS) are achieved. Pennsylvania's plan 
approval regulations referenced above were originally approved by EPA 
into the SIP on May 31, 1972 (37 FR 10842) for the purpose of meeting 
the Section 110(a)(2)(C) requirement.
    In order to make its program consistent with the Clean Air Act 
Amendments of 1990, Pennsylvania had previously submitted, on February 
10, 1994, its new source review (NSR) construction permit program to 
EPA for review and approval. EPA is reviewing this program submittal 
and will take the appropriate approval/disapproval action at a later 
date. As part of this action, Pennsylvania is making changes to its 
public hearing and administrative procedures in order to achieve 
consistency of such procedures throughout all of its permitting 
programs. EPA has reviewed these proposed changes to Pennsylvania's 
plan approval program and has determined that they meet all applicable 
federal requirements for approval.

C. Proposed Approval of Pennsylvania's Plan Approval and FESOP Programs 
Under Section 112(1)

    On May 18, 1995, PADEP requested approval of Pennsylvania's FESOP 
and plan approval programs under Section 112 of the Act for the purpose 
of creating federally enforceable limitations on the potential to emit 
of HAPs. As described above, the Commonwealth's plan approval program 
regulations were initially approved by EPA and incorporated into the 
Pennsylvania SIP on May 31, 1972. EPA is today proposing to approve and 
incorporate into the SIP Pennsylvania's operating permit and plan 
approval program regulations submitted May 18, 1995.
    EPA approval of the Commonwealth's plan approval and FESOP programs 
under Section 112(l) of the Act is necessary to extend Pennsylvania's 
existing authority under Section 110 of the Act to include authority to 
create federally enforceable limits on the potential to emit HAPs. 
EPA's previous rulemaking actions on the various Pennsylvania permit 
programs for incorporation into the SIP provides a mechanism only for 
controlling criteria air pollutants which does not extend to HAPs. Only 
Section 112 of the Act provides the underlying authority for States to 
limit potential to emit of HAPs in federally enforceable State 
operating permits and construction permits. This necessitates EPA 
approval of Pennsylvania's operating permit and plan approval programs 
pursuant to Section 112(l) of the Act.
    The criteria used by EPA for the original SIP approval of 
Pennsylvania's plan approval program are located in 40 CFR 51.160-164. 
EPA believes that the PADEP's existing plan approval program meets the 
requirements of 40 CFR 51.160 through 51.164.
    EPA has determined that the five approval criteria for approving 
FESOP programs into the SIP, as specified in the June 28, 1989 Federal 
Register notice referenced above, are also appropriate for evaluating 
and approving the programs under Section 112(l). The June 28, 1989 
notice does not address HAPs because it was written prior to the 1990 
amendments to Section 112 of the Act. Hence, the following five 
criteria are applicable to FESOP approvals under Section 112(l): (1) 
the program must be submitted to and approved by EPA; (2) the program 
must impose a legal obligation on the operating permit holders to 
comply with the terms and conditions of the permit, and permits that do 
not conform with the June 28, 1989 criteria shall be deemed not 
federally enforceable; (3) the program must contain terms and 
conditions that are at least as stringent as any requirements contained 
in the SIP or enforceable under the SIP or any other Section 112 or 
other Clean Air Act standard or requirement; (4) permits issued under 
the program must contain conditions that are permanent, quantifiable, 
and enforceable as a practical matter; and (5) permits issued under the 
program must be subject to public participation. Please refer to the 
TSD for a thorough analysis of how Pennsylvania's operating permits 
program satisfies each of the five approval criteria. Since the State's 
operating permits program meets the five program approval criteria for 
both criteria and hazardous air pollutants, the Pennsylvania program 
may be used to limit the potential to emit of both criteria and 
hazardous air pollutants.
    In addition to meeting the criteria discussed above, Pennsylvania's 
plan approval and operating permits programs for limiting potential to 
emit of HAPs must meet the statutory criteria for approval under 
Section 112(l)(5) of the Act. This section allows EPA to approve a 
program only if it: (1) contains adequate authority to assure 
compliance with any Section 112 standard or requirement; (2) provides 
for adequate resources; (3) provides for an expeditious schedule for 
assuring compliance with Section 112 requirements; and (4) is otherwise 
likely to satisfy the objectives of the Act.
    The EPA plans to codify the approval criteria for programs limiting 
the potential to emit of HAPs through amendments to Subpart E of 40 CFR 
part 63, the regulations promulgated to implement section 112(l) of the 
Act.

[[Page 9131]]

(See 58 Fed. Reg. 62262, November 26, 1993). The EPA currently 
anticipates that these criteria, as they apply to FESOP programs, will 
mirror those set forth in the June 28, 1989 notice, with the addition 
that the State's authority must extend to HAPs instead of or in 
addition to VOC's and PM10. The EPA currently anticipates that 
FESOP programs that are approved pursuant to Section 112(l) prior to 
the planned Subpart E revisions will have had to meet these criteria, 
and hence will not be subject to any further approval action.
    The EPA believes it has the authority under section 112(l) to 
approve programs to limit potential to emit of HAPs directly under 
section 112(l) prior to this revision to Subpart E. Section 112(l)(5) 
requires the EPA to disapprove programs that are inconsistent with 
guidance required to be issued under section 112(l)(2). This might be 
read to suggest that the ``guidance'' referred to in section 112(l)(2) 
was intended to be a binding rule. Even under this interpretation, the 
EPA does not believe that section 112(l) requires this rulemaking to be 
comprehensive. That is, it need not address every possible instance of 
approval under section 112(l). The EPA has already issued regulations 
under section 112(l) that would satisfy any section 112(l)(2) 
requirement for rulemaking. Given the severe timing problems posed by 
impending deadlines set forth in ``maximum achievable control 
technology'' (MACT) emission standards under section 112 and for 
submittal of Title V permit applications, the EPA believes it is 
reasonable to read section 112(l) to allow for approval of programs to 
limit potential to emit prior to promulgation of a rule specifically 
addressing this issue. The EPA is therefore proposing approval of 
Pennsylvania's FESOP and plan approval programs now so that 
Pennsylvania may begin to issue federally enforceable operating permits 
and plan approvals limiting potential to emit as soon as possible. This 
will allow Pennsylvania to immediately begin exempting sources from 
Title V requirements where this is possible and appropriate.
    The EPA proposes approval of Pennsylvania's FESOP and plan approval 
programs pursuant to Section 112(l) of the Act because the programs 
meet applicable approval criteria specified in the June 28, 1989 
Federal Register document and in Section 112(l)(5) of the Act. 
Regarding the statutory criteria of Section 112(l)(5) of the Act 
referred to above, the EPA believes Pennsylvania's FESOP and plan 
approval programs contain adequate authority to assure compliance with 
Section 112 requirements since neither program provides for waiving any 
Section 112 requirement(s). Sources would still be required to meet 
Section 112 requirements applicable to non-major sources. Regarding 
adequate resources, Pennsylvania has included in its FESOP and plan 
approval programs provisions for collecting fees from sources making 
application for either a plan approval, an operating permit, or both. 
Furthermore, EPA believes that Pennsylvania's FESOP and plan approval 
programs provide for an expeditious schedule for assuring compliance 
because they allow a source to establish a voluntary limit on potential 
to emit and avoid being subject to a federal Clean Air Act requirement 
applicable on a particular date. Nothing in Pennsylvania's plan 
approval or operating permit programs would allow a source to avoid or 
delay compliance with a federal requirement if it fails to obtain the 
appropriate federally enforceable limit by the relevant deadline. 
Finally, Pennsylvania's FESOP and plan approval programs are consistent 
with the objectives of the Section 112 program because their purpose is 
to enable sources to obtain federally enforceable limits on potential 
to emit to avoid major source classification under Section 112. The EPA 
believes that this purpose is consistent with the overall intent of 
Section 112.

IV. Administrative Requirements

A. Request for Public Comments

    The EPA is soliciting public comments on all aspects of this 
proposed full approval. Interested parties may participate in the 
Federal rulemaking procedure by submitting written comments to the EPA 
Regional office listed in the Addresses section of this notice. These 
comments will be considered before taking final action. Copies of the 
State's submittal and other information relied upon for the proposed 
Title V and section 112(l) approvals and the approval of Pennsylvania's 
SIP revision pertaining to its plan approval and FESOP programs are 
contained in a docket 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 these proposed 
approvals. The principal purposes of the docket are:
    (1) to allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process, and
    (2) to serve as the record in case of judicial review. The EPA will 
consider any comments received by April 8, 1996.

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 sections 502, 110 and 112 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, the 
creation of Federally enforceable permit conditions for sources of 
hazardous air pollutants listed pursuant to section 112(b) of the Act, 
and plan approval and FESOP requirements that the State is already 
imposing. Because this action does not impose any new requirements, it 
does not have a significant impact on a substantial number of small 
entities.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    SIP approvals under section 110 and subchapter I, part D of the 
Clean Air Act do not create any new requirements but simply approve 
requirements that the State is already imposing. Therefore, because the 
Federal SIP approval does not impose any new requirements, the 
Administrator certifies that it does not have a significant impact on 
any small entities affected. Moreover, due to the nature of the 
Federal-State relationship under the Act, preparation of a flexibility 
analysis would constitute Federal inquiry into the economic 
reasonableness of state action. The Clean Air Act forbids EPA to base 
its actions concerning SIPs on such grounds. Union Electric Co. v. U.S. 
EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any State implementation plan. Each request for revision to 
the State implementation plan shall be considered separately in light 
of specific technical, economic,

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and environmental factors and in relation to relevant statutory and 
regulatory requirements.

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 
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.
    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.
    This action proposing approval of Pennsylvania's Title V program 
has been classified as a Table 3 action for signature by the Regional 
Administrator under the procedures published in the Federal Register on 
January 19, 1989 (54 FR 2214-2225), as revised by a July 10, 1995 
memorandum from Mary Nichols, Assistant Administrator for Air and 
Radiation. The Office of Management and Budget (OMB) has exempted this 
regulatory action from E.O. 12866 review.

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

    Dated: February 23, 1996.
Stanley L. Laskowski,
Acting Regional Administrator, EPA Region III.
[FR Doc. 96-5415 Filed 3-6-96; 8:45 am]
BILLING CODE 6560-50-P