[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Rules and Regulations]
[Pages 31443-31449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15617]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[FRL-5521-4]
RIN 2060-AF70


Operating Permits Program Interim Approval Criteria

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is promulgating revisions to the interim approval 
criteria within the regulations in part 70, chapter I, title 40, of the 
Code of Federal Regulations (CFR). Part 70 contains regulations 
requiring States to develop, and submit to EPA for approval, programs 
for issuing operating permits to major, and certain other, stationary 
sources of air pollution as required by title V of the Clean Air Act 
(Act). Two changes to the interim approval criteria were proposed on 
August 29, 1994 to address difficulties in program development that 
have occurred since promulgation of part 70. Today's action finalizes 
one of those changes; the other will be finalized in a subsequent 
action.
    As a result of today's revision to part 70, certain State operating 
permit programs will become eligible for interim program approval. 
Without today's changes, these programs would not have been eligible 
for interim program approval under the part 70 regulations. 
Specifically, interim approval may now be granted for programs which do 
not provide for the incorporation of terms contained in permits issued 
under EPA-approved minor source preconstruction permit programs into 
corresponding part 70 permits.
    To be eligible for this interim approval, such programs would have 
to show compelling reasons for the interim approval and meet certain 
other requirements regarding the content of part 70 permits that 
exclude these applicable preconstruction permit terms during the 2-year 
interim period. After 2 years, interim approval expires and the State 
must have revised its program to address the exclusion of these terms, 
and any other deficiencies, in order to receive full approval.

EFFECTIVE DATE: July 22, 1996.

FOR FURTHER INFORMATION CONTACT: Michael Ling (telephone number 919-
541-4729), U. S. Environmental Protection Agency, Office of Air Quality 
Planning and Standards, Information Transfer and Program Integration 
Division, Mail Drop 12, Research Triangle Park, North Carolina 27711.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    Entities potentially regulated by this action are those State, 
local, or tribal governments who seek approval of their part 70 
operating permit programs, but whose programs do not include minor 
preconstruction permit terms in their part 70 permits. Regulated 
categories include:

------------------------------------------------------------------------
                                                Examples of regulated   
                 Category                             entities          
------------------------------------------------------------------------
State/Local/Tribal Government.............  Governments who have        
                                             developed operating permit 
                                             programs that exclude minor
                                             NSR terms from title V     
                                             permits and who seek EPA   
                                             approval of such programs  
                                             under the part 70          
                                             regulations.               
------------------------------------------------------------------------

This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be affected by this action. If you have questions 
regarding the applicability of this action to a particular entity, 
consult the person listed in the preceding FOR FURTHER INFORMATION 
CONTACT section.

Docket

    Supporting information used in developing the part 70 rules, 
including today's promulgated change, is contained in docket number A-
93-50. This docket is available for public inspection and copying 
between 8:30 a.m. and 3:30 p.m. Monday through Friday, at EPA's Air 
Docket, Room M-1500, Waterside Mall, 401 M Street SW, Washington, D.C. 
20460. A reasonable fee may be charged for copying.

I. Background and Purpose

A. Introduction

    Title V of the Clean Air Act Amendments of 1990 (1990 Amendments), 
Public Law 101-549, requires EPA to promulgate regulations establishing 
the requirements for development and submittal of State operating 
permit programs and the minimum elements these programs must contain to 
be approvable. On July 21, 1992, EPA published regulations meeting 
these requirements in the Federal Register (57 FR 32250).
    Title V and the part 70 regulations require States and local 
agencies to submit operating permit programs to EPA within 3 years of 
enactment of the 1990 Amendments, and require EPA to take action within 
1 year of program submittal to approve or disapprove these programs. 
Section 502(g) of the Act allows EPA to grant interim approval to a 
program if it ``substantially meets'' the requirements of title V but 
is not fully approvable. Interim approval may be granted for a period 
of up to 2 years and may not be renewed. The interim approval provision 
allows permitting authorities time to correct the program deficiencies 
preventing full approval. The minimum elements that a program must 
contain to be eligible for interim approval are contained in 
Sec. 70.4(d).
    The EPA proposed two changes to the interim approval criteria on 
August 29, 1994 (59 FR 44571). The first change would allow interim 
approval for part 70 programs which allow permits to be revised through 
the minor permit modification procedure to reflect those changes at a 
facility which is subject to EPA-approved minor source preconstruction 
permit requirements, commonly referred to as ``minor new source 
review'' (minor NSR) changes. Because this proposal is linked to 
proposed changes to the permit revision system, which EPA is not yet 
ready to finalize, and because current EPA policy already allows for 
approval of programs which allow changes established through minor NSR 
to be addressed using minor permit modification procedures, EPA is not 
taking final action on this proposed change in today's rulemaking.
    The second proposed change to the interim approval criteria 
addresses programs that do not incorporate terms and conditions into a 
source's part 70 permit which are established through an EPA-approved 
minor NSR program.

[[Page 31444]]

Title V and part 70 require a permit to contain provisions which assure 
compliance with all applicable requirements (section 502(b)(5)(A) of 
the Act, 40 CFR 70.6(a)). The definition of the term ``applicable 
requirement'' in part 70 includes requirements established through 
minor NSR permitting procedures (Sec. 70.2). The proposed change to 
part 70 would, for the period of interim approval, allow part 70 
permits to be issued and revised without incorporating those terms and 
conditions that are applicable requirements solely because they are 
established through minor NSR. These minor NSR terms and conditions 
would still remain federally enforceable through the provisions of the 
minor NSR program. In today's notice, EPA is taking final action on 
this proposed rule change.

B. Summary of Proposed Changes Addressing Applicable Requirements

    The August 29, 1994 proposal noted that, in order to be eligible 
for interim approval, a program must contain adequate authority to 
issue permits that assure compliance with all applicable requirements 
including all applicable requirements under title I of the Act [see 
Sec. 70.4(d)(3)(ii) and Sec. 70.4(c)(1)]. The proposal explained that 
EPA believes the term ``applicable requirements'' clearly includes all 
terms and conditions of minor NSR permits. Therefore, a part 70 program 
that would not provide for incorporating into permits those 
requirements established through the EPA-approved minor NSR program 
would be prohibited by Sec. 70.4(d)(3)(ii) from receiving interim 
approval.
    One State, Texas, argued that there are compelling reasons 
supporting its exclusion of minor NSR requirements as title V 
applicable requirements, and that its submitted part 70 program should 
thus be eligible for approval. Although EPA reads Sec. 70.2 and 
Sec. 70.6(a)(1) to unequivocally require minor NSR terms to be 
applicable requirements (meaning that the submitted Texas program could 
not obtain full approval), the Agency proposed that Texas' 
demonstration of compelling reasons warranted further consideration of 
the submitted program for interim approval on the basis that it 
substantially meets the requirements of title V. Texas' demonstration 
of compelling reasons included the following arguments: (1) Texas' 
existing minor NSR program is so stringent that the integration of all 
its minor NSR terms would be infeasible and unnecessary for 
environmental protection; (2) Texas has an exceptionally large number 
of part 70 sources which are candidates for minor NSR, making part 70 
permitting difficult and time-consuming; and (3) Texas believes that 
its system of cross-referencing minor NSR permits in part 70 permits 
will serve essentially the same program purposes as inclusion of the 
minor NSR requirements themselves, rendering direct inclusion of these 
requirements unnecessary from Texas' viewpoint.
    On the basis of this type of showing, EPA proposed to consider 
interim approval for programs facing significant minor NSR/part 70 
integration difficulties. The proposal further provided that, for a 
program operating under this type of interim approval: (1) Each part 70 
permit issued during the interim approval must (if applicable) state 
that applicable minor NSR requirements are not included; (2) each minor 
NSR permit containing requirements applicable to the source must be 
cross-referenced in the source's part 70 permit so that citizens may 
access and review those requirements; (3) excluded minor NSR 
requirements would not be eligible for the permit shield under 
Sec. 70.6(f); and (4) upon conversion to full approval, all permits 
issued during the interim approval period that excluded minor NSR terms 
would have to be reopened to include these terms.
    Although the exclusion of minor NSR means that important title V 
compliance measures (e.g., compliance certification, public review, 
etc.) will be deferred for 2 years for minor NSR terms, the proposed 
provisions would limit the scope and duration of the effects of this 
deferral, and would assure that the public could examine, in federally-
enforceable NSR permits, any terms which are not subject to title V's 
compliance measures during the interim period. This helps strengthen 
the proposal's position that programs which exclude minor NSR terms 
could ``substantially meet'' the requirements of part 70 and receive 
interim approval. However, EPA reiterates that all compliance measures 
contained in title V must be applied to all applicable requirements, 
including minor NSR terms, before a part 70 program can receive full 
approval.

II. Discussion of Today's Action

A. Summary of Changes Since Proposal

    In response to comments, EPA is making three minor rule changes to 
clarify the requirements discussed in the proposal preamble. These 
include: (1) Adding rule language clarifying that any excluded NSR 
permits must be cross-referenced in the applicable part 70 permit; (2) 
adding rule language clarifying that excluded NSR requirements would 
not be eligible for the permit shield under Sec. 70.6(f); and (3) 
adding rule language clarifying that, upon conversion to full approval, 
permits issued during the interim period would have to be revised or 
reopened to include any excluded minor NSR terms. Regarding reopening, 
today's rule also provides for a streamlined reopening process for 
excluded minor NSR terms that does not require the full permit issuance 
process. The rule provisions are also being rearranged into separate 
paragraphs in the final rule for clarity. In addition to these rule 
clarifications, the EPA also reiterates in today's preamble its 
position that minor NSR is an applicable requirement for part 70 
purposes. Additional discussion is also provided on the proposed 
``compelling reasons'' demonstration requirement being promulgated 
today.

B. Significant Comments and Responses

    The August 29, 1994 proposal concerning interim approval criteria 
was grouped with a larger proposal revising the part 70 permit revision 
system (published separately at 59 FR 44459). The EPA received a total 
of 246 comment letters on these two proposals, some of which addressed 
each action separately and some of which addressed both actions 
together. This section addresses only the major comments received on 
the proposed revision to the interim approval criteria regarding minor 
NSR as an applicable requirement. Discussion of additional issues 
raised by the commenters related to today's action is contained in the 
technical support document for this rule, which is included in the 
docket for today's rulemaking. Comments on other proposed changes to 
the interim approval criteria not addressed by today's rule change, 
including comments on other aspects of the August 1994 proposals (as 
well as the August 31, 1995 proposal which supplemented the August 1994 
notice on permit revisions), will be addressed in a future rulemaking.
1. Minor NSR as an Applicable Requirement
    Several commenters asserted that revisions to the interim approval 
criteria are unnecessary because minor NSR is not an ``applicable 
requirement'' under part 70. The EPA notes that it has the authority to 
promulgate this revision to the interim approval criteria regardless of 
the correctness of the assertion that minor NSR is not an applicable 
requirement. However, EPA also

[[Page 31445]]

disagrees with the commenters' assertion, and stands by the position 
and the rationale articulated in the proposal, that minor NSR is an 
applicable requirement. Key points of this rationale are reiterated 
below in response to comments received, and are discussed further in 
the technical support document found in the docket.
    One commenter disagreed with EPA's reading of the part 70 
definition of ``applicable requirement,'' noting that something is not 
necessarily an ``applicable requirement'' simply because it is a 
requirement of the Act. The EPA agrees with this broad statement, 
noting--for example--that requirements of title II are not ``applicable 
requirements.'' However, EPA sees no basis for concluding that minor 
NSR permits issued under a State implementation plan (SIP) approved 
program are not applicable requirements. Furthermore, as explained in 
the proposal preamble, EPA believes the part 70 rule is clear in 
defining ``applicable requirements'' to include minor NSR. A challenge 
to this point should have been raised in the context of the July 21, 
1992 promulgation of part 70.
    Another commenter argued more broadly that the intent of the Act is 
to regulate major sources while allowing States to regulate minor 
sources through minor NSR programs. The EPA disagrees. Section 
110(a)(2)(c) of the Act and EPA's regulations at 51.161 clearly 
establish Federal requirements for preconstruction review of activities 
below the NSR major source applicability thresholds. The EPA further 
disagrees with this commenter's assertion that its argument is 
supported by EPA's proposed resolution of the ``title I modifications'' 
issue. A determination by EPA that ``title I modifications'' do not 
include minor NSR actions does not mean that minor NSR programs are 
optional under the Act.
    A commenter also noted that many State minor NSR programs go beyond 
the Federal minimum, and that a detailed analysis would be necessary to 
determine the precise extent to which a minor NSR program is necessary 
to attain and maintain the national ambient air quality standards 
(NAAQS). The EPA disagrees that any such analysis is necessary or 
appropriate. A State that submitted a minor NSR program for approval 
into the SIP presumably did so because it believed that the submitted 
program was necessary to attain and maintain the NAAQS. The EPA 
believes this is the only reasonable presumption that can be made in 
retrospect.
    Although EPA reiterates that minor NSR terms are applicable 
requirements, EPA also recognizes that certain terms found in existing 
NSR permits (including minor NSR permits) may be obsolete, extraneous, 
environmentally insignificant, or otherwise not required as part of the 
SIP or a federally-enforceable NSR program. Inclusion of these terms in 
a part 70 permit could present program implementation difficulties and 
is not needed to fulfill the purposes of the Act. Noting this, EPA 
issued a policy addressing incorporation of these permit terms into 
part 70 permits. This policy is described in ``White Paper for 
Streamlined Development of Part 70 Permit Applications, July 10, 1995'' 
(White Paper). The White Paper states that, although minor NSR permit 
terms are applicable requirements, the permitting authority may use a 
joint title V/NSR ``parallel process'' to make appropriate revisions to 
an NSR permit to exclude NSR terms which are obsolete, unrelated to 
attainment and maintenance of a NAAQS, extraneous, or otherwise 
environmentally insignificant. By revising the underlying NSR permit to 
delete, revise, or designate as State-only these unnecessary minor NSR 
permit terms, the permit authority has discretion to exclude these 
terms from the set of federally-enforceable minor NSR conditions, and 
thus from the definition of ``applicable requirement'' for part 70 
purposes.
    The EPA notes that programs which exclude minor NSR as an 
applicable requirement under today's approach to interim approval, and 
which seek to streamline minor NSR permits using a White Paper 
approach, would not need to have revised existing minor NSR permits in 
this way until conversion to full approval, because these programs will 
not include minor NSR terms in part 70 permits until that time. 
However, programs considering this type of parallel processing are 
encouraged to consult the White Paper and begin this permit revision 
process, so that the task of streamlining minor NSR permits does not 
conflict with other permit authority responsibilities at the time full 
approval is received.
2. Demonstration of ``Compelling Reasons''
    The proposal allows EPA to grant interim approval to part 70 
programs that do not include minor NSR as an applicable requirement 
upon a showing by the permitting authority of ``compelling reasons'' 
which support the interim approval. One commenter stated that the 
requirement for compelling reasons is unworkable and should be deleted, 
and that EPA does not provide guidance on what constitutes compelling 
reasons. The EPA disagrees that the compelling reasons requirement 
should be deleted, and does not believe that additional guidance on 
compelling reasons is necessary for reasons explained below.
    The EPA believes it is important to include a requirement that a 
State demonstrate compelling reasons to grant interim approval if a 
part 70 program excludes minor NSR from the definition of ``applicable 
requirement.'' The EPA believes, in general, that an interim approval 
on this basis is undesirable because it delays the implementation of 
title V for a large number of Act requirements at a large number of 
sources, and is a significant departure from the part 70 regulations. 
The Agency believes that this type of departure should be made only for 
those programs that demonstrate a strong need for the interim exclusion 
of minor NSR. Therefore, the Agency is requiring that such programs 
demonstrate compelling reasons for granting the interim approval.
    Two commenters also asserted that EPA has no basis under the Act to 
require States to show compelling reasons for granting interim 
approval; EPA disagrees. Section 502(g) of the Act gives EPA broad 
discretion as to when and how it grants interim approval. This 
discretion includes requiring that a State show compelling reasons 
before making significant departures from part 70. The commenters 
presented no basis, nor does EPA see any reason, to remove the 
``compelling reasons'' requirement.
    The ``compelling reasons'' demonstration should be based primarily 
on a showing that extraordinary difficulties would be encountered in 
incorporating minor NSR terms into initial title V permits. It is also 
appropriate to include in the demonstration any measures the State is 
taking in its interim part 70 program to support the implementation of 
the excluded minor NSR program. The EPA reserves its discretion to 
evaluate demonstrations of compelling reasons on a case-by-case basis, 
with consideration given to the degree of the minor NSR/title V 
integration difficulties and the extent to which the State part 70 
program addresses minor NSR implementation in the interim. Because of 
the case-by-case nature of such decisions, EPA cannot provide 
prescriptive criteria for the compelling reasons demonstration.
    The Texas demonstration of compelling reasons, described in the 
August 1994 proposal, is an example of

[[Page 31446]]

the type of demonstration that could be considered for interim approval 
under today's rule. Texas argued that: (1) Its minor NSR program is so 
stringent that integration of all minor NSR terms would be infeasible; 
(2) it has an exceptionally large number of part 70 sources which 
receive minor NSR; and (3) its part 70 program would cross-reference 
minor NSR permits in part 70 permits (i.e., identifies in each part 70 
permit the applicable minor NSR permits, but does not incorporate by 
reference the requirements of minor NSR into the part 70 permit).
    Although EPA does not believe that the existence of a stringent 
minor NSR program justifies exclusion of minor NSR from a title V 
program, the Agency acknowledges that a program such as Texas' does 
produce an extremely large number of minor NSR permits, because of both 
its inclusive applicability provisions and because of the large number 
of facilities statewide. Thus, integration of minor NSR permits into 
initial title V permits presents significant difficulty in Texas. 
Similarly, although EPA does not believe that simply cross-referencing 
minor NSR permits satisfies title V, EPA acknowledges that the cross-
referencing requirement in Texas' part 70 program serves to provide 
additional notice in part 70 permits when minor NSR applies to a 
facility. Although this measure falls short of the permit content 
requirements of a fully-approvable title V program, EPA believes it is 
appropriate for a State to reference such measures in its compelling 
reasons demonstration. Therefore, because of the combination of 
integration difficulties and program measures, EPA would consider such 
a program for interim approval. The EPA notes that today's notice is 
not intended to present the Agency's position as to whether Texas' 
compelling reasons demonstration (together with the rest of its 
program) warrants interim approval under the revised criteria. Rather, 
today's rule simply provides for the possibility that such a program 
could be considered for interim approval in light of the fact that it 
excludes minor NSR terms from part 70 permits.
    In addition to requiring a showing of compelling reasons, the 
proposal preamble noted that EPA will consider the following as factors 
against this type of interim approval: (1) Whether a program's 
exclusion of minor NSR terms will diminish the effectiveness of the 
State's minor NSR program during the interim period; and (2) whether 
the State has already submitted a part 70 program that included minor 
NSR as an applicable requirement. It is recommended that States 
considering excluding minor NSR as an applicable requirement carefully 
consider whether, in light of these factors, its reasons for the 
exclusion truly constitute a compelling need. Such States should also 
consider whether the time delays in program approval associated with 
necessary program changes and the development of a case-by-case 
analysis of compelling reasons are worth the interim relief that may be 
achieved through the temporary exclusion of minor NSR from title V 
permitting.
3. Incorporation of Minor NSR on Transition to Full Approval
    The proposal preamble noted that a part 70 program which does not 
incorporate minor NSR as an applicable requirement must, upon 
conversion from interim to full approval, provide for the reopening of 
permits issued during the interim period in order to include the 
excluded minor NSR requirements in each part 70 permit. Three 
commenters stated that such a reopening would be unnecessary and 
impractical. The commenters were concerned about the timing and impact 
of the resource burden imposed on sources and on permitting authorities 
by the reopening process, which, in accordance with Sec. 70.7(f)(2), 
must follow the same procedural requirements as permit issuance. They 
felt that reopening was an unnecessary procedural burden with little 
environmental benefit and believed that minor NSR terms could be 
included at renewal, rather than reopening, with little adverse impact.
    While EPA is sensitive to resource concerns, the Agency does not 
agree that these concerns should result in exclusion of minor NSR terms 
from title V permits until renewal. The EPA, in proposing to allow this 
type of interim approval, did not contemplate that minor NSR applicable 
requirements could be excluded until renewal, which could be up to 5 
years after full program approval. Furthermore, part of the rationale 
for granting interim approval is that the excluded minor NSR terms are 
subject to other safeguards in the part 70 regulations. One such 
safeguard is the reopening of permits when interim approval expires to 
incorporate excluded applicable requirements. Without such a safeguard, 
minor NSR terms would not be subject to key provisions of title V, such 
as annual compliance certification, recordkeeping and reporting, and 
other similar requirements, for up to 5 years.
    The EPA does agree that, if reopenings to incorporate excluded 
minor NSR permits must follow the same procedural requirements as full 
permit issuance, the process of reopening each permit issued during the 
interim approval period could impose considerable administrative burden 
at a time when the permitting authority is still also processing 
initial permit applications. This burden is greatly mitigated in Texas 
where the earliest permits, and hence the ones requiring reopening, are 
for the simplest sources and source categories. The EPA believes that 
remaining concerns over the resource burden associated with reopenings 
will be reasonably addressed by the provisions discussed below.
    The EPA reiterates that any permit issued during the interim period 
must, upon transition to full approval, assure compliance with the 
permit content requirements of title V (i.e., Secs. 70.6 (a) and (c)) 
for all applicable requirements, including the previously excluded 
minor NSR terms. However, the Act does not specifically require a full 
reopening when interim approval expires as the only means to achieve 
this end. The EPA believes that excluded minor NSR applicable 
requirements may be brought on to the title V permit prior to or upon 
full program approval using procedures more streamlined than full 
reopening. This is because some of the excluded minor NSR requirements 
have already been subjected to some title V procedural requirements 
(e.g., public review) during issuance of the NSR permit. The EPA 
recognizes that under this approach, other excluded minor NSR terms 
will be incorporated into part 70 permits without an opportunity for 
public comment, EPA objection, or citizen petition until renewal. 
However, EPA believes that deferral of these title V requirements until 
renewal is appropriate for excluded minor NSR applicable requirements. 
A minor NSR permit that is newly issued during the permit term would be 
incorporated into the permit through procedures that are less than 
those required for permit issuance. The EPA believes it is reasonable 
to allow for equitable treatment of pre-existing minor NSR permits that 
were initially excluded from the permit in the same manner, 
particularly since the permit shield will not apply until the minor NSR 
permit undergoes full title V procedures at renewal.
    The EPA is adding language at Sec. 70.3(d)(3)(ii)(D) allowing this 
streamlined reopening approach for excluded minor NSR terms. The EPA 
notes that any such process should at least meet the part 70 permit 
revision requirements for changes subject to minor NSR. This would 
include any

[[Page 31447]]

minimum requirements for public notice and access to records contained 
in the part 70 regulations in effect at the time of program transition 
to full approval. The EPA is further allowing permitting authorities to 
dispense with the need to give each source a 30-day notice of its 
intent to revise the permit to incorporate previously-excluded minor 
NSR permits. The EPA believes this individual notice is unnecessary 
because sources, by virtue of this action and actions taken by the 
State to implement this approach, will have ample notice of the fact 
that permits excluding minor NSR permits will need to be reopened.
    As an alternative to the streamlined reopening described above, EPA 
believes that an interim program that does not include minor NSR terms 
in title V permits can be designed in such a way that it provides in 
advance for the inclusion of minor NSR terms upon transition to full 
approval. This can be accomplished by providing that each part 70 
permit issued during the interim period contains a condition that 
automatically incorporates, at the date of transition to full approval, 
the terms and conditions of any minor NSR permits referenced in the 
facility's title V permit. This would not simply be cross-referencing, 
but would be advance incorporation of the NSR requirements by 
reference, which would subject them to title V requirements such as the 
requirement for an annual compliance certification. This approach would 
provide in advance for a streamlined transition to full approval 
without any need for reopening.
    The EPA believes that the allowance for more streamlined procedures 
for incorporating excluded applicable requirements, together with the 
advance incorporation approach described above, provide less burdensome 
alternatives to full reopening. Interim programs that exclude minor NSR 
are encouraged to adopt one, or a combination, of these streamlined 
approaches to assure that title V is met for excluded minor NSR terms 
prior to or upon conversion to full approval, thus avoiding the need 
for full reopening. However, EPA notes that, in the absence of any 
other assurance that Secs. 70.6 (a) and (c) are met for any applicable 
requirements, including minor NSR terms, the reopening provisions under 
Secs. 70.7 (f) and (g), including full issuance process, would apply if 
and when EPA grants full approval, as noted in the preamble to the 
proposal.
4. Cross-Referencing of Minor NSR Permits Under Interim Program
    The preamble to the proposed revision provided that each part 70 
permit issued by an interim program that does not include minor NSR as 
an applicable requirement must state that applicable minor NSR 
requirements are not included in the permit, and must cross-reference 
any excluded minor NSR permits so that citizens may access and review 
those permits. One commenter noted that, while the preamble asserts 
that such cross-referencing is required, the corresponding rule 
language is ambiguous with respect to this requirement. Another 
commenter felt that if EPA does require such cross-referencing, 
specific criteria regarding what constitutes adequate cross-referencing 
should also be provided.
    The EPA agrees that there is a need to clarify the rule language 
regarding cross-referencing. Therefore, EPA is adding a sentence to the 
proposed rule language in Sec. 70.4(d)(3)(ii) to clarify that a 
facility's part 70 permit must contain a list of all minor NSR permits 
that contain excluded applicable requirements for that facility. Most 
States have a numbering system for minor NSR permits, so a listing in 
the part 70 permit of the permit numbers for each minor NSR permit 
applicable to that facility would fulfill the cross-referencing 
requirement.
    For similar reasons, EPA is adding language clarifying the proposal 
preamble discussion of the permit shield. The preamble stated that the 
permit shield would not apply to the excluded minor NSR terms. Rule 
language is being added to codify this requirement in parallel with the 
other requirements for the interim program.

III. Administrative Requirements

A. Docket

    The docket for this regulatory action is number A-93-50. All the 
documents referenced in this preamble fall into one of two categories. 
They are either reference materials that are considered to be generally 
available to the public, or they are memoranda and reports prepared 
specifically for this rulemaking. Both types of documents can be found 
in docket number A-93-50.

B. Executive Order (E.O.) 12866

    Under E.O. 12866 (58 FR 51735, October 4, 1993), the Agency must 
determine whether each regulatory action is ``significant,'' and 
therefore subject to the Office of Management and Budget (OMB) review 
and the requirements of the Order. The Order defines ``significant'' 
regulatory action as one that is likely to lead to a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities.
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency.
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan program or the rights and obligation of recipients 
thereof.
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
E.O. 12866.
    Pursuant to the terms of E.O. 12866, it has been determined that 
this rule is not a ``significant'' regulatory action because it does 
not substantially change the existing part 70 requirements for States 
or sources--requirements which have already undergone OMB review. 
Rather than impose any new requirements, this rule removes an 
obstruction to part 70 program approval for a small number of State 
programs, allowing them to implement their own part 70 programs. In the 
absence of today's rule, EPA would implement its part 71 program in 
such States, which, as noted in the Information Collection Request 
(ICR) for the part 71 rule, would be more burdensome in a given State 
than a part 70 program for both the sources and the applicable 
permitting authority. Thus, not only does the rule avoid new direct 
costs, it leads indirectly to a savings. As such, this action was 
exempted from OMB review.

C. Regulatory Flexibility Act Compliance

    Under the Regulatory Flexibility Act, whenever an Agency publishes 
any proposed or final rule in the Federal Register, it must prepare a 
Regulatory Flexibility Analysis (RFA) that describes the impact of the 
rule on small entities (i.e., small businesses, organizations, and 
governmental jurisdictions). The EPA has established guidelines which 
require an RFA if the proposed rule will have any economic impact, 
however small, on any small entities that are subject to the rule, even 
though the Agency may not be legally required to develop such an 
analysis.
    The original part 70 rule was determined to not have a significant 
and disproportionate adverse impact on small entities. Similarly, a 
regulatory flexibility screening analysis of the

[[Page 31448]]

impacts of the proposed part 70 revisions determined that the proposed 
revisions (a subset of which constitutes today's action) would likewise 
not have a significant and disproportionate adverse impact on small 
entities. Consequently, the Administrator certified that the part 70 
regulations would not have a significant and disproportionate impact on 
small entities. Because today's rule does not substantially alter the 
part 70 regulations as they pertain to small entities, and does not 
necessitate changes to the part 70 RFA, these changes to part 70 will 
not have a significant and disproportionate impact on small entities, 
and a new RFA is not needed for this action.

D. Submission to Congress and the General Accounting Office

    Under section 801(a)(1)(A) of the Administrative Procedures Act 
(APA) as amended by the Small Business Regulatory Enforcement Fairness 
Act of 1996, EPA submitted a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives and the Comptroller General of the General Accounting 
Office prior to publication of the rule in today's Federal Register. 
This rule is not a ``major rule'' as defined by section 804(2) of the 
APA as amended.

E. Paperwork Reduction Act

    The OMB has approved the information collection requirements 
contained in this rule under the provisions of the Paperwork Reduction 
Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-
0243. The ICR prepared for the part 70 rule is not affected by today's 
action because the part 70 ICR determined burden on a nationwide basis, 
assuming all part 70 sources were included without regard to the 
approval status of individual programs. Today's rule, which simply 
provides for the interim approval of certain programs which would have 
otherwise not been eligible for such approval, does not alter the 
assumptions of the approved part 70 ICR used in determining the burden 
estimate. Furthermore, today's action does not impose any additional 
requirements which would add to the information collection requirements 
for sources or permitting authorities.
    Send comments on the Agency's need for this information, the 
accuracy of the provided burden estimates, and any suggested methods 
for minimizing respondent burden, including through the use of 
automated collection techniques, to:

Director, Regulatory Information Division, Office of Policy, Planning, 
and Evaluation (2136), U.S. Environmental Protection Agency, 401 M 
Street, SW., Washington, DC 20460

      and

Office of Information and Regulatory Affairs, Office of Management and 
Budget, Attention: Desk Officer for EPA, 725 17th Street, NW., 
Washington, DC 20503.

    Include the ICR number in any correspondence.

F. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with Federal mandates that may 
result in expenditures to State, local, and tribal governments, in the 
aggregate, or to the private sector, of $100 million or more in any 1 
year.
    The EPA has determined that today's rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector, in any 1 year. Although the part 70 regulations governing State 
operating permit programs impose significant Federal mandates, today's 
action does not amend the part 70 regulations in a way that 
significantly alters the expenditures resulting from these mandates. 
Therefore, the Agency concludes that it is not required by section 202 
of the UMRA of 1995 to provide a written statement to accompany this 
regulatory action.

List of Subjects in 40 CFR Part 70

    Environmental protection, Air pollution control, Carbon monoxide, 
Fugitive emissions, Hydrocarbons, Lead, New source review, Nitrogen 
dioxide, Operating permits, Particulate matter, Prevention of 
significant deterioration, Volatile organic.

    Dated: June 11, 1996.
Carol M. Browner,
Administrator.

    For the reasons set out in the preamble, 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. Section 70.4 is amended by revising paragraphs (d)(3) 
introductory text and (d)(3)(ii) to read as follows:


Sec. 70.4  State program submittals and transition.

* * * * *
    (d) * * *
    (3) The EPA may grant interim approval to any program if it meets 
each of the following minimum requirements and otherwise substantially 
meets the requirements of this part:
* * * * *
    (ii) Applicable requirements.
    (A) The program must provide for adequate authority to issue 
permits that assure compliance with the requirements of paragraph 
(c)(1) of this section for those major sources covered by the program.
    (B) Notwithstanding paragraph (d)(3)(ii)(A) of this section, where 
a State or local permitting authority lacks adequate authority to issue 
or revise permits that assure compliance with applicable requirements 
established exclusively through an EPA-approved minor NSR program, EPA 
may grant interim approval to the program upon a showing by the 
permitting authority of compelling reasons which support the interim 
approval.
    (C) Any part 70 permit issued during an interim approval granted 
under paragraph (d)(3)(ii)(B) of this section that does not incorporate 
minor NSR requirements shall:
    (1) Note this fact in the permit;
    (2) Indicate how citizens may obtain access to excluded minor NSR 
permits;
    (3) Provide a cross reference, such as a listing of the permit 
number, for each minor NSR permit containing an excluded minor NSR 
term; and
    (4) State that the minor NSR requirements which are excluded are 
not eligible for the permit shield under Sec. 70.6(f).
    (D) A program receiving interim approval for the reason specified 
in (d)(3)(ii)(B) of this section must, upon or before granting of full 
approval, institute proceedings to reopen part 70 permits to 
incorporate excluded minor NSR permits as terms of the part 70 permits, 
as required by Sec. 70.7(f)(1)(iv). Such reopening need not follow full 
permit issuance procedures nor the notice requirement of 
Sec. 70.7(f)(3), but may instead follow the permit revision procedure 
in effect under the State's

[[Page 31449]]

approved part 70 program for incorporation of minor NSR permits.
* * * * *
[FR Doc. 96-15617 Filed 6-19-96; 8:45 am]
BILLING CODE 6560-50-P