[Federal Register Volume 61, Number 102 (Friday, May 24, 1996)] [Proposed Rules] [Pages 26145-26149] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-13151] ======================================================================= ----------------------------------------------------------------------- ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 70 [AD-FL-5510-2] Clean Air Act Interim Approval of Operating Permits Program; Delegation of Section 112 Standards; State of Vermont AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: The EPA proposes interim approval of the Operating Permits Program submitted by Vermont 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 approving Vermont's authority to implement hazardous air pollutant requirements. DATES: Comments on this proposed action must be received in writing by June 24, 1996. ADDRESSES: Comments should be addressed to Donald Dahl, Air Permits, CAP, U.S. Environmental Protection Agency, Region I, JFK Federal Building, Boston, MA 02203-2211. Copies of the State's submittal and other supporting information used in developing the proposed interim approval are available for inspection during normal business hours at the following location: U.S. Environmental Protection Agency, Region 1, One Congress Street, 11th floor, Boston, MA 02203-2211. FOR FURTHER INFORMATION CONTACT: Donald Dahl, CAP, U.S. Environmental Protection Agency, Region 1, JFK Federal Building, Boston, MA 02203- 2211, (617) 565-4298. 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. B. Federal Oversight and Sanctions If EPA were to finalize this proposed interim approval, it would extend for two years following the effective date of final interim approval, and could not be renewed. During the interim approval period, the State of Vermont would be protected from sanctions, and EPA would not be obligated to promulgate, administer and enforce a Federal permits program for the State of Vermont. Permits issued under a program with interim approval have full standing with respect to part 70, and the 1-year time period for submittal of permit applications by subject sources begins upon the effective date of interim approval, as does the 3-year time period for processing the initial permit applications 1. --------------------------------------------------------------------------- \1\ Note that states may require applications to be submitted earlier than required under section 503(c). See Subchapter X, Section 5-1005 of Vermont's rules. --------------------------------------------------------------------------- Following final interim approval, if the State of Vermont failed to submit a complete corrective program for full approval by the date 6 months before expiration of the interim approval, EPA would start an 18-month clock for mandatory sanctions. If the State of Vermont 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 Vermont had corrected the deficiency by submitting a complete corrective program. If, six months after application of the first sanction, the State of Vermont still has not submitted a corrective program that EPA finds complete, a second sanction will be required. If, following final interim approval, EPA were to disapprove the State of Vermont'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 the State of Vermont had submitted a revised program and EPA had determined that it corrected the deficiencies that prompted the disapproval. If, six months after EPA applies the first sanction, the State of Vermont has not submitted a revised program that EPA has determined corrected the deficiencies that prompted disapproval, a second sanction will be required. Moreover, if EPA has not granted full approval to the State of Vermont's program by the expiration of an interim approval and that expiration occurs after November 15, 1995, EPA must promulgate, administer and enforce a Federal permits program for the State of Vermont upon interim approval expiration. II. Proposed Action and Implications A. Analysis of State Submission The analysis contained in this document focuses on specific elements of Vermont's title V operating permits program that must be corrected to meet the minimum requirements of 40 CFR part 70. The full program submittal, technical support document (TSD), dated April 19, 1996 entitled ``Technical Support Document--Vermont Operating Permits Program'', 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. Title V Program Support Materials Vermont's title V program was submitted by the State on April 28, 1995 (PROGRAM). The submittal was found to be administratively complete on June 12, 1995. The PROGRAM consisted of a Governor's letter, program description, Attorney General's legal opinion, permitting regulations and enabling legislation, and permitting program documentation. Included with the PROGRAM submittal was a draft implementation agreement which will be finalized by EPA and Vermont. The [[Page 26146]] agreement outlines procedures for EPA oversight, the state's administration of the PROGRAM, and state commitments for implementing future air toxic regulations. On March 6, 1996, Vermont submitted a supplement to their PROGRAM, which included a revised Attorney General Opinion, a revised permit form, and a letter of intention for delegation of standards under sections 111 and 112 of the Clean Air Act. 2. Title V Operating Permit Regulations and Implementation Vermont's regulations implementing Part 70 include Environmental Protection Regulations, Air Pollution Control Chapter V, Definitions (Sec. 5-101) and Subchapter X (Secs. 5-1001-1016, Operating Permits). The Vermont PROGRAM, including the operating permit regulations, substantially meets the requirements of 40 CFR part 70, including Secs. 70.2 and 70.3 with respect to applicability, Secs. 70.4, 70.5 and 70.6 with the respect to permit content and operational flexibility, Secs. 70.7 and 70.8 with respect to public participation and review by affected states and EPA, and Sec. 70.11 with respect to requirements for enforcement authority. Although the regulations substantially meet Part 70 requirements, there are program deficiencies that are outlined in section II.B. below as Interim Approval issues. Those Interim Approval issues are more fully discussed in the TSD. The ``Issues'' section of the TSD also contains a detailed discussion of elements of Part 70 that are not explicitly contained in Vermont's regulation, but which are satisfied by other elements of Vermont's program submittal and/or other Vermont State law. Also discussed in the TSD are certain elements of Vermont's title V regulation that are in need of a legal interpretation and which EPA is interpreting to be consistent with Part 70 with the understanding that Vermont shares such interpretation. Those elements include: (1) the absence of the language ``[a]ny national ambient air quality standard or increment or visibility requirement under Part C of title I of the Act, but only as it would apply to temporary sources permitted pursuant to section 504(e) of the Act'' in Vermont's definition of ``applicable requirement''; (2) Section 5-1014 of Vermont's rule relating to ``off-permit'' changes; (3) Vermont's treatment of ``insignificant activities'' under Sections 5-1002 and 5-1006; (4) Vermont's authority to make applicability determinations in Section 5-1003; (5) Vermont's treatment of the stringency of compliance schedules contained in permits as required by 40 CFR 70.5(8)(iii)(C); (6) Vermont's treatment of certain permit content elements required by 40 CFR 70.6; (7) Vermont's method for providing adequate, streamlined, and reasonable procedures for expeditiously processing permit modifications; and (8) Vermont's requirements for the time frames and detailed contents of compliance certifications. EPA understands that Vermont will implement its program consistent with these interpretations, and will base this interim approval on these interpretations unless Vermont comments to the contrary. Variances. Vermont's Air Quality Variance Board has the authority to issue a variance from requirements imposed by State law. See 10 V.S.A. Sec. 561. The EPA regards Vermont's variance provisions as wholly external to the program submitted for approval under Part 70 and consequently is proposing to take no action on these provisions of State law. The EPA has no authority to approve provisions of State law that are inconsistent with the Act. The EPA does not recognize the ability of a permitting authority to grant relief from the duty to comply with a federally enforceable Part 70 permit, except where such relief is granted through procedures allowed by Part 70. A Part 70 permit may be issued or revised (consistent with Part 70 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 revision 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 40 CFR 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.'' 3. 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 permit program. Each title V program submittal must contain either a detailed demonstration of fee adequacy or a demonstration that the fees collected exceed $25 per ton of actual emissions per year, adjusted from the August, 1989 consumer price index (``CPI''). The $25 per ton was presumed by Congress to cover all reasonable direct and indirect costs to an operating permit program. This minimum amount is referred to as the ``presumptive minimum.'' Vermont has opted to make a presumptive fee demonstration. Vermont has demonstrated that actual emissions emitted from their title V sources was 5079 tons, excluding carbon monoxide. Vermont's permit fee legislation requires that each title V source pay an annual fee based on $800 per facility and $30 per ton. Therefore Vermont will collect $219,375. Using Vermont's application and emission fees, the State will collect $43.19 per ton annually which is above the presumptive minimum adjusted by the CPI. Therefore, Vermont has demonstrated that the State will collect sufficient permit fees to meet EPA's presumptive minimum criteria. For more information, see section VII of Vermont's title V program documentation. 4. Provisions Implementing the Requirements of Other Titles of the Act a. Authority and/or Commitments for Section 112 Implementation Vermont has demonstrated in its title V program submittal adequate legal authority to implement and enforce all section 112 requirements through the title V permit. This legal authority is contained in Vermont's enabling legislation, regulatory provisions defining ``applicable requirements,'' and the requirement that a title V permit must incorporate all applicable requirements. EPA has determined that this legal authority is sufficient to allow Vermont to issue permits that assure compliance with all section 112 requirements and to carry out all section 112 activities. In addition, given Vermont's commitments regarding implementation of the State's title V program, EPA has determined that the State will issue permits that assure compliance with all section 112 requirements, and will carry out all section 112 activities. For further discussion of this subject, please refer to the Technical Support Document, referenced above, and the April 13, 1993 guidance memorandum titled ``Title V Program Approval Criteria for Section 112 Activities,'' signed by John Seitz, Director of the Office of Air Quality Planning and Standards. b. Implementation of 112(g) Upon Program Approval On February 14, 1995, EPA published an interpretive notice (see 60 FR 8333) that postpones the effective date of section 112(g) until after EPA has promulgated a rule addressing the [[Page 26147]] requirements of that provision. 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 the effective date of section 112(g), Vermont must be able to implement section 112(g) during the period between promulgation of the Federal section 112(g) rule and adoption of implementing State regulations for section 112(g) requirements. EPA believes that Vermont can utilize its preconstruction permitting program to serve as a procedural vehicle for implementing the section 112(g) rule and making these requirements Federally enforceable between promulgation of the Federal section 112(g) rule and adoption of implementing State regulations for section 112(g). For this reason, EPA is proposing to approve Vermont's preconstruction permitting program found in 10 V.S.A. Sec. 5-501 under the authority of title V and Part 70 solely for the purpose of implementing section 112(g) during the transition period between title V approval and adoption of a State rule implementing EPA's section 112(g) regulations. Since the approval would be for the single purpose of providing a mechanism to implement section 112(g) during the transition period, the approval would 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. Also, since the approval would be for the limited purpose of allowing the State sufficient time to adopt regulations, EPA proposes to limit the duration of the approval to 18 months following promulgation by EPA of its section 112(g) rule. c. Program for Straight Delegation of Sections 111 and 112 Standards The part 70 requirements for approval of a State operating permit program, specified in 40 CFR 70.4(b), encompass section 112(l)(5) requirements for approval of a program for delegation of the hazardous air pollutant program General Provisions, Subpart A, of 40 CFR parts 61 and 63, promulgated under section 112 of the Act, and MACT standards as promulgated by EPA as they apply to part 70 sources. Section 112(l)(5) requires that a State's program contain adequate legal authorities, adequate resources for implementation, and an expeditious compliance schedule, which are also requirements under Part 70. The Vermont Department of Environmental Conservation provided a supplemental request on March 6, 1996, for non-part 70 sources which contained information regarding adequate legal authorities, adequate resources for implementation, and an expeditious compliance schedule. Therefore, EPA is also proposing to grant approval under section 112(l)(5) and 40 CFR 63.91 of Vermont's mechanism for receiving delegation of section 112 standards for both major and area sources, that are unchanged from the Federal standards as promulgated (straight delegation) and section 112 infrastructure programs such as those programs authorized under sections 112(i)(5), 112(g), 112(j), and 112(r). In addition, EPA is reconfirming the delegation of 40 CFR part 60 standards currently delegated to Vermont as indicated in Table I. Please note EPA has withdrawn delegation of Subpart XX, ``Bulk Gas Terminals'' per Vermont's request. Vermont requested the withdrawal because there currently are no Subpart XX sources in the State. EPA is proposing to delegate all applicable future 40 CFR parts 60, 61, and 63 standards pursuant to the following mechanism unless otherwise requested by Vermont.2 Vermont will accept future delegation of standards by checking the appropriate boxes on a standardized checklist. The EPA Regional Office will forward a checklist listing the applicable regulations to Vermont, and Vermont will accept the Federal standard as promulgated by checking the appropriate box and returning it to EPA. The details of this delegation mechanism are set forth in the March 6, 1996 letter containing a Memorandum of Agreement between EPA and Vermont. This program will apply to both existing and future standards. The original delegation agreement between EPA and Vermont was set forth in a letter to Brendan J. Whittaker dated September 30, 1982. In addition, Vermont has indicated that for some section 112 standards it may choose to submit a more stringent State rule or program through section 112(l). EPA will need to take public notice and comment for any section 112 delegation other than straight delegation. --------------------------------------------------------------------------- \2\ The radionuclide National Emission Standards for Hazardous Air Pollutant (NESHAP) is a section 112 regulation and therefore, also an applicable requirement under the State operating permits program for part 70 sources. There is not yet a Federal definition of ``major source'' for radionuclide sources. Therefore, until a major source definition for radionuclide is promulgated, no source would be a major section 112 source solely due to its radionuclide emissions. However, a radionuclide source may, in the interim, be a major source under Part 70 for another reason, thus requiring a Part 70 permit. The EPA will work with the State in the development of its radionuclide program to ensure that permits are issued in a timely manner. --------------------------------------------------------------------------- Vermont is implementing this delegation by issuing permits to both major and area/minor sources. Permits issued to area/minor sources are not title V permits and therefore may not be federally enforceable. d. Implementation of Title IV of the Act Vermont has stated in Section 5-1008(g) of Subchapter X that the ``Secretary shall implement the requirements and provisions of Title IV of the federal Clean Air Act.'' B. Proposed Action The scope of Vermont's Part 70 program covers all Part 70 sources within the state of Vermont, except 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 CAA; see also 59 FR 43956, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 21, 1993). 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 and non-part 70 sources. As discussed above, Vermont's submittal meets the requirements for EPA approval of delegation of section 112 standards. Therefore, the EPA is also proposing to grant approval under section 112(l)(5) and 40 CFR 63.91 of the State's mechanism for receiving delegation of section 112 standards that are unchanged from Federal standards as promulgated. Vermont will be issuing permits containing section 112 standards to both major and area/minor sources; therefore, EPA is delegating authority to implement these standards for all sources subject to the standards, not just for part 70 sources. The EPA is proposing to grant interim approval to the operating permits program submitted by Vermont on April 28, 1995. If promulgated, the State must make the following changes to receive full approval: [[Page 26148]] 1. Vermont does not allow for ``section 502(b)(10)'' changes at a title V source. In an August 29, 1994 (59 FR 44572) rulemaking proposal, EPA proposed to eliminate section 502(b)(10) changes as a mechanism for implementing operational flexibility. However, the Agency solicited comment on the rationale for this proposed elimination. If EPA should conclude, during a final rulemaking, that section 502(b)(10) changes are no longer required as a mechanism for operational flexibility, then Vermont will not be required to address 502(b)(10) changes in its rule. 2. In Sections 5-1014 and 5-1015(a)(11), the program regulation implementing operational flexibility requirements allows the State the discretion to incorporate emission trades into a permit, and does not require that the emissions involved in such trades be quantifiable. EPA's rule states that when a permitting authority agrees to establish an emissions cap in a title V permit independent of otherwise applicable requirements, the permitting authority must include emission trading provisions for complying with that cap requested by the permit applicant, as long as those provisions are quantifiable and include the compliance requirements of 40 CFR 70.6 (a) and (c). EPA's rule also requires that the emissions involved in such trades be quantifiable before a title V permit can provide for the trades. See Sec. 70.4(b)(12)(iii). However, if a source requests an emission trade that could violate an underlying state requirement, the State has the discretion to limit any emission trading consistent with the state requirement when issuing the operating permit. Vermont must therefore adopt regulatory language requiring the State to include, upon request by a source, emission trading provisions in a title V permit for the purpose of complying with an emissions cap established in the permit, provided that the emissions involved in such trades are quantifiable. Vermont retains the option to include language in its regulation that would require all such trades to be consistent with state requirements as well as applicable requirements. 3. In Section 5-1008(e)(1), the program regulation states that Vermont has the discretion to reopen and reissue a title V permit for cause. In Section 5-1008(e)(4) (i)-(vi), the program regulation enumerates the conditions which would potentially cause Vermont to reopen a permit. EPA's rule requires a permitting authority to reopen and reissue a permit when certain conditions exist (or ``for cause'' as defined by the regulation). See 40 CFR 70.7(f). Thus, Vermont must change the word ``may'' to ``shall'' in Section 5-1008(e)(1). Vermont must also include a provision in its rule requiring the State to reopen and reissue a permit (with a remaining term of 3 or more years) within 18 months of a source's becoming subject to an additional applicable requirement. See Sec. 70.7(f)(1)(i). 4. Vermont must adopt provisions in Subchapter X which would require that every permit contain certain terms and conditions as specified in section 70.6. Vermont's current permit content section, found at Section 5-1015 of Subchapter X, does not contain all of the terms and conditions in Sec. 70.6. Section 5-1015 of the program rule requires permit terms which generally address applicable requirements, emission monitoring and reporting, and compliance plans. Vermont will need to add the following missing requirements of section 70.6: (a) a source's obligation to report promptly any permit deviations (section 70.6(a)(3)(iii)(B)); (b) a source's obligation to maintain a record when switching between operating scenarios (section 70.6(a)(9)(i)); (c) the State's obligation to separate in a title V permit those permit terms which are enforceable by the State only (and to specifically designate them as such) from those which are enforceable by both the State and EPA (sections 70.6(b) (1) and (2)); and (d) the State's obligation to indicate in a title V permit the origin and authority of all permit terms and conditions, and identify any difference in form as compared to the applicable requirement upon which a permit term or condition is based (section 70.6(a)(1)(i)). There are several ways Vermont could revise its rule to address the separation of federal and state requirements. One option suggested by EPA's recent ``White Paper Number 2,'' dated March 5, 1996, is to clarify which state requirements are not federally-enforceable in the Findings of Fact section of the draft permit. This separation would identify for all concerned parties the federal applicable requirements and the requirements based solely on State law. If Vermont proposed to consolidate the State and federal requirements in the permit terms and conditions, Vermont would then have to use the most stringent limit as the permit condition in the draft permit. If an applicant objected during the public comment period to the consolidation of federal and State requirements, Vermont would have to separate the permit conditions within the enforceable terms and conditions section of the final permit. Vermont's regulation must clearly provide the permit applicant the authority to require the State to separate out State-only permit terms and conditions. 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 interim approval 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 this proposed interim approval. 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 administrative record in the event of judicial review. The EPA will consider any comments received by June 24, 1996. 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, 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 action promulgated today does not include a Federal mandate that may result in [[Page 26149]] 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 preexisting requirements under State or local law, and imposes no new Federal requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action. List of Subjects in 40 CFR Part 70 Environmental protection, Administrative practice and procedure, Air pollution control, Intergovernmental relations, Operating permits, Reporting and recordkeeping requirements. Authority: 42 U.S.C. 7401-7671q. Dated: May 6, 1996. John P. DeVillars, Regional Administrator, Region I. Table I to the Preamble Reconfirmation of Part 60 and 61 Delegations Part 60 Subpart Categories Da ELECTRIC UTILITY STEAM GENERATORS Dc SMALL INDUSTRIAL-COMMERCIAL-INSTITUTIONAL STEAM GENERATING UNITS E INCINERATORS I ASPHALT CONCRETE PLANTS RR TAPE AND LABEL SURFACE COATINGS OOO NONMETALLIC MINERAL PROCESSING PLANTS UUU CALCINERS AND DRYERS IN MINERALS INDUSTRY Part 61 Subpart Categories M ASBESTOS [FR Doc. 96-13151 Filed 5-23-96; 8:45 am] BILLING CODE 6560-50-P