[Federal Register Volume 61, Number 147 (Tuesday, July 30, 1996)]
[Proposed Rules]
[Pages 39617-39623]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19325]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[NY001; FRL-5544-3]


Clean Air Act Proposed Interim Approval of Operating Permits 
Program: State of New York

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the operating permits 
program submitted by the State of New York 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.

DATES: Comments on this proposed action must be received in writing by 
August 29, 1996.

ADDRESSES: Written comments should be addressed to Steven C. Riva, 
Chief, Permitting and Toxics Support Section, at the New York Region II 
Office listed below. Copies of the State's submittal and other 
supporting information used in developing the proposed interim approval 
as well as the Technical Support Document are available for inspection 
during normal business hours at the following locations:
    EPA Region II, 290 Broadway (21st Floor until July 19, 25th Floor 
after July 19), New York, New York 10007-1866, Attention: Steven C. 
Riva.
    New York State Department of Environmental Conservation, 50 Wolf

[[Page 39618]]

Road, Room 608, Albany, New York 12233-1500, Attention: John Higgins.

FOR FURTHER INFORMATION CONTACT: Gerald DeGaetano, Permitting and 
Toxics Support Section, at the above EPA office in New York or at 
telephone number (212) 637-4020.
SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    As required under Title V of the Clean Air Act (``the Act'') as 
amended (1990), EPA has promulgated rules which define the minimum 
elements of an approvable State operating permits program and the 
corresponding standards and procedures by which 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 Title 40 of 
the Code of Federal Regulations (40 CFR) part 70. Title V of the Act 
directs States to develop, and submit to EPA for approval, programs for 
issuing operating permits to all major stationary sources and to 
certain other sources. Due to pending litigation over several aspects 
of the part 70 rule which was promulgated on July 21, 1992, part 70 is 
in the process of being revised. When the final revisions to part 70 
are promulgated, the requirements of the revised part 70 may re-define 
EPA's criteria for the minimum elements of an approvable State 
operating permits program and the corresponding standards and 
procedures by which EPA will approve, oversee, and withdraw approval of 
State operating permits program submittals. Until the date on which the 
revisions to part 70 are promulgated, the currently effective July 21, 
1992 version of part 70 shall be used as the basis for EPA's review.
    The Act directs States to develop and submit these programs for EPA 
approval. 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.

Proposed Action and Implications

A. Analysis of State Submission

    1. Support materials. Commissioner Thomas C. Jorling of the 
Department of Environmental Conservation (DEC) submitted a part 70 
permitting program for the State of New York with a letter requesting 
EPA's approval on November 12, 1993 and Deputy Commissioner David 
Sterman submitted a supplemental package on June 17, 1996. These 
submittals contain a description of how the DEC intends to implement 
the program consistent with the requirements of the Act and 40 CFR part 
70. The submittals include supporting documentation such as evidence of 
the procedurally correct adoption of the permitting rule, the permit 
application form, and a description of the compliance tracking and 
enforcement program. On June 27, 1996 the Attorney General of New York 
submitted a legal opinion stating that DEC has adequate legal authority 
to carry out the program. The Attorney General Legal Opinion was the 
final submission of the DEC's complete part 70 application.
    The analysis contained in this document focuses on the major 
portions of New York's operating permits program submittal, including 
regulations and program implementation, the permit fee demonstration, 
and provisions implementing the requirements of sections 111 and 112 of 
Title I and of Title IV of the Act. This document also addresses the 
deficiencies in New York's submittal which will need to be corrected 
prior to full approval by EPA.
    2. Regulations and program implementation.
    New York's part 70 permitting regulations are contained in Title 6 
of the Official Compilation of Codes, Rules and Regulations of the 
State of New York (``6 NYCRR'') Part 200; 201-1.1 to 201-1.3, 201-1.5 
to 201-1.10, 201-2, 201-3, 201-6, 201-8 and Appendices A and B of Part 
201; 482-2; 621.1, 621.3(e), 621.3(f), 621.4(g), 621.5, 621.6, 621.7, 
621.9, 621.13 and 621.14; 624.3 and 624.12. New York's regulations meet 
the main requirements of part 70 as described below:
    a. applicability (40 CFR 70.2 and 70.3): Sources required to obtain 
a part 70 permit under New York's regulation include all major 
stationary sources as defined in 6 NYCRR 201-2, any source subject to a 
New Source Performance Standard, any source subject to a standard under 
section 112 of the Act (except that a source is not required to obtain 
a part 70 permit solely because it is subject to 112(r) of the Act), 
any affected source under the acid rain provisions of Title IV of the 
Act, and any stationary source designated by the Administrator and 
added by the DEC pursuant to rulemaking. Please note that while New 
York lists sources subject to a New Source Performance Standard in 40 
CFR part 60, et seq. as being subject to Title V, EPA interprets this 
also to include rules that DEC promulgates pursuant to section 111(d) 
of the Act, as defined in 40 CFR part 60, subparts B and C, but that 
are approved by EPA under 40 CFR part 62. New York is also deferring 
non-major sources, consistent with part 70, until the Administrator 
completes a rulemaking to determine how the Title V program should be 
structured for non-major sources and the appropriateness of any 
permanent exemptions. New York's regulation permanently exempts any 
source that would be required to obtain a permit solely because it is 
subject to Standards of Performance for New Residential Wood Heaters or 
the National Emission Standard for Hazardous Air Pollutants for 
Asbestos, Standards for Demolition and Renovation. (6 NYCRR 201-2 and 
201-6.1)
    b. permit content (40 CFR 70.6): 6 NYCRR 201-6.5 requires that each 
permit contain emission limitations and standards to ensure compliance 
with all applicable requirements at the time of permit issuance. 
Permits may also contain certain operational flexibility requirements 
such as terms and conditions for alternate operating scenarios and for 
the trading of emissions increases and decreases (to the extent the 
applicable requirements provide for such trading) in the permitted 
facility. If requested by the applicant, permits can be issued that 
provide for emissions trading in the permitted facility solely for the 
purpose of complying with a federally enforceable emissions cap 
independent of otherwise applicable requirements.
    c. public participation (40 CFR 70.7): The public will be provided 
with notice of, and an opportunity to comment on, draft permits 
relating to initial permit issuance, permit renewals, and significant 
modifications (6 NYCRR 621.6).
    d. permit modifications (40 CFR 70.7): Sources may apply for 
expedited permit changes for minor permit modifications. Significant 
modifications must undergo all part 70 permit issuance procedures (6 
NYCRR 201-6.7).
    e. EPA oversight (40 CFR 70.8): Each permit, renewal, and minor or 
significant modification is subject to EPA oversight and veto (6 NYCRR 
201-6.4).
    f. insignificant activities (40 CFR 70.5): The list of 
insignificant activities can be found at 6 NYCRR 201-3.2 (``Exempt 
Activities'') and the list of trivial activities is found at 201-3.3. 
Activities can only be considered insignificant or trivial if not 
subject to any applicable requirements. In addition, sources must not 
omit

[[Page 39619]]

emissions from insignificant or trivial activities from emission 
calculations to determine if a source is subject to the part 70 permit 
program. Insignificant activities must still be listed in the permit 
application while trivial activities do not need to be listed. In 
addition, 6 NYCRR 201-6.3(d)(7) provides that emissions from units at 
major stationary sources shall be considered insignificant as long as 
they are not subject to any applicable requirements and meet the 
following criteria: emissions of criteria contaminants do not exceed 
2.5 tpy based on actual emissions, provided on-site records are 
maintained to verify these emissions, or 2.5 tpy based on potential to 
emit; and emissions of a hazardous air pollutant do not exceed 1000 lb/
yr and/or 5000 lb/yr for any combination of hazardous air pollutants 
except where the Administrator has established lower thresholds for a 
specific hazardous air pollutant or major source threshold (emissions 
can be based on actual emissions if on-site records are maintained or 
on potential emissions if records are not kept); and the emission unit 
does not utilize air pollution control devices or is not limited by an 
emission cap to meet the above criteria.
    g. enforcement authority (40 CFR 70.11): Section 71-2103(1) of New 
York's Environmental Conservation Law provides that civil penalties 
shall be recoverable in an amount up to $10,000 per day per violation 
for a first violation and $15,000 per day for subsequent violations. 
Section 71-2103(1) also provides for injunctive authority. Section 71-
2105(1) provides that for willful violations criminal fines of up to 
$10,000 per day per violation and/or imprisonment are available in the 
case of a first violation and criminal fines of up to $15,000 per day 
per violation and/or imprisonment are available in the case of a second 
or further violation.
    Pursuant to 72-0201(12) of the Environmental Conservation Law, any 
person who fails to pay fees shall pay a penalty of 50% of the unpaid 
fee amount plus interest. If the source continues not to pay its fees, 
New York may exercise its authority under 6 NYCRR 481.8 to revoke or 
suspend the title V permit. The source could then be subject to civil 
and criminal liability for operating without a permit.
    h. complete application forms (40 CFR 70.5): 6 NYCRR 201-6.2 and 
201-6.3 define what elements must be in an application in order for it 
to be complete during the first phase application submittal and second 
phase application submittal. All sources, except those required to 
submit the entire application within the first year, must submit the 
phase I application within twelve months after EPA approves the program 
to allow DEC to commence review of the permit application. Phase II 
applications, which contain all required information, must be submitted 
in accordance with the application schedule in Appendix B of Part 201 
(not yet complete--see item k. below). All information identified in 40 
CFR 70.5 is included in New York's permit application.
    i. prompt reporting: Part 70 requires prompt reporting of 
deviations from the permit requirements. Section 70.6(a)(3)(iii)(B) 
requires the permitting authority to define ``prompt'' in relation to 
the degree and type of deviation likely to occur and the applicable 
requirements. Although the permit program regulations should define 
``prompt'' for purposes of administrative efficiency and clarity, an 
acceptable alternative is to define ``prompt'' in each individual 
permit. In general, the EPA believes that ``prompt'' should be defined 
as requiring reporting within two to ten days for deviations that may 
result in emission increases. Two to ten days is sufficient time in 
most cases to protect public health and safety as well as to provide a 
forewarning of potential problems. For deviations resulting in low 
levels of excess emissions, a longer time period may be acceptable. 
Where ``prompt'' is defined in the individual permit but not in the 
program regulations, EPA may veto permits that do not contain 
sufficient permit conditions for the prompt reporting of deviations. 
New York's 6 NYCRR 201-6.5(c)(3)(i) requires submittal of reports of 
any required monitoring at least every six months. 201-6.5(c)(3)(ii) 
provides that permit deviations must be reported with the monitoring 
reports required in 201-6.5(c)(3)(i) unless DEC specifies a different 
reporting requirement in the permit. DEC must issue permits which 
require prompt reporting of deviations. Absent this, EPA may veto 
permits.
    j. emergency: In 201-1.5, New York provides for the affirmative 
defense to an action brought for noncompliance with emission 
limitations or permit conditions as long as the source follows specific 
procedures consistent with 40 CFR 70.6(g). New York defines 
``emergency'' in 201-2 consistent with Sec. 70.6(g) and limits the 
applicability to technology-based requirements under the permit or 
State-established emission limitations.
    k. Transition Plan: New York currently plans to issue permits to 
all sources within three years. Originally, when proposing Part 201, 
New York had planned to request source category-limited interim 
approval in order to issue all permits over a five-year period. 
However, because the enabling legislation requires that initial permits 
be issued within three years, Part 201 was promulgated to provide for a 
three-year transition period. Currently, New York is re-proposing 
Appendix B of 6 NYCRR Part 201 ``Transition Plan Application Schedule'' 
which will inform sources of when during the three year period they 
must submit their Phase II permit applications. Appendix B will be 
finalized prior to EPA's promulgation of final interim approval of New 
York's part 70 program.
    3. Permit fee demonstration. New York's resource fee demonstration 
shows that the state will collect sufficient revenue to implement the 
Title V program. New York began collecting permit fees on January 1, 
1994 at $25 per ton of regulated pollutants up to 6000 tons annually of 
each regulated pollutant. This rate of $25 per ton was adjusted by the 
Consumer Price Index (CPI) [base year 1994]. New York's resource fee 
demonstration shows that New York will collect the equivalent of EPA's 
presumptive minimum because New York's cap on fees is 2000 tons higher 
than the cap assumed for the presumptive minimum and because New York 
has ramp-up funds available to cover the four year period provided in 
the resource fee demonstration. EPA agrees that New York's fee, 
although based on a different year for the CPI, can be considered 
equivalent to the presumptive minimum and should be sufficient to 
support the Title V program (EPA's presumptive minimum assumes use of 
the 1989 base year CPI). In addition, New York is required to report 
annually to the Governor, Legislature, and Office of State Comptroller 
on its program costs, revenue and progress. EPA will review these 
reports to ensure that New York's fee is sufficient to cover program 
costs after the program has been in effect for one to two years.
    As specified in the enabling legislation and 6 NYCRR 482-2, fees 
shall be based on actual emissions for the prior calendar year, as 
demonstrated to DEC's satisfaction, or in the absence of such 
demonstration, on permitted emissions, or, where there is no permit, on 
potential to emit. Furthermore, New York's enabling legislation 
establishes a special account entitled ``operating permit account'' 
under the Clean Air Fund to cover the reasonable direct and indirect 
costs of developing and administering New York's operating permits 
program and the small business stationary source technical and

[[Page 39620]]

environmental compliance assistance program.
    4. Provisions implementing Section 112 of the Act. a. authority for 
section 112 implementation: New York 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 New York's enabling legislation and in 
regulatory provisions defining ``applicable requirements'' in that the 
permit must incorporate all applicable requirements. EPA has determined 
that this legal authority is sufficient to allow New York to issue 
permits that assure compliance with all section 112 requirements, 
including section 112(r).
    b. implementation of section 112(g): The EPA issued an interpretive 
notice on February 14, 1995 (60 FR 8333), which outlines EPA's revised 
interpretation of 112(g) applicability. The notice postpones the 
effective date of 112(g) until after EPA has promulgated a rule 
addressing that provision. The notice sets forth in detail the 
rationale for the revised interpretation.
    The section 112(g) interpretive notice explains that EPA is still 
considering whether the effective date of section 112(g) should be 
delayed beyond the date of promulgation of the Federal rule so as to 
allow states time to adopt rules implementing the Federal rule, and 
that EPA will provide for any such additional delay in the final 
section 112(g) rulemaking. Unless and until EPA provides for such an 
additional postponement of section 112(g), New York must be able to 
implement section 112(g) during the period between promulgation of the 
Federal section 112(g) rule and the adoption of New York rules 
implementing EPA's section 112(g) regulations or New York's 
incorporation by reference of the 112(g) regulations.
    The EPA is proposing to approve New York's preconstruction 
permitting program, found in 6 NYCRR Part 201, under the authority of 
Title V and part 70 solely for the purpose of implementing section 
112(g) to the extent necessary during the transition period between 
Title V approval and adoption of a State rule implementing EPA's 
section 112(g) regulations.
    c. program for straight delegation of section 112 standards: 
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 General Provision Subpart A and standards as promulgated 
by EPA as they apply to part 70 sources. Section 112(l)(5) requires 
that a State's program contain adequate authorities, adequate resources 
for implementation, and an expeditious compliance schedule, which are 
also requirements under part 70. Therefore, the EPA is also proposing 
to grant approval under section 112(l)(5) and 40 CFR 63.91 of the 
State's program for receiving delegation of section 112 standards that 
are unchanged from the Federal standards as promulgated. New York has 
informed EPA that it intends to accept delegation of section 112 
standards through either: case-by-case rule adoption; or incorporation 
by reference of the Federal regulation into State regulation. The 
details of this delegation mechanism are set forth in a letter dated 
June 18, 1996 in which New York requested delegation of section 112 
standards and section 111 New Source Performance Standards. This 
program applies to both existing and future standards and covers both 
part 70 and non-part 70 sources. However, New York does not intend to 
take delegation of the 112(r) program, but will still implement the 
appropriate permit conditions relevant to the risk management program 
in part 70 permits. In addition, this delegation does not include 
National Emission Standards for Hazardous Air Pollutants for Asbestos, 
Standards for Demolition and Renovation.
    5. Provisions implementing Section 111 of the Act. As requested in 
the letter dated June 18, 1996, the EPA is approving New York's request 
for delegation of all existing New Source Performance Standards 
promulgated pursuant to section 111 of the Act except for 40 CFR part 
60, subpart AAA, Standards of Performance for New Residential Wood 
Heaters.
    New York also commits to implement appropriately the existing and 
future requirements of sections 111, 112 and 129 of the Act, and all 
MACT standards promulgated in the future, in a timely manner.
    Currently, 6 NYCRR Part 200.10(d), Table 4, does not include 40 CFR 
part 63, subpart D--Compliance Extensions for Early Reductions of HAPs. 
In addition, 6 NYCRR Part 200.10(b), Table 2, is missing 40 CFR part 
60, subpart WWW--New Source Performance Standards for Landfills. New 
York must use its minor rulemaking procedures to incorporate by 
reference these federal rules.
    6. Provisions implementing Title IV of the Act. In 6 NYCRR 
200.10(e), Table 5, New York has incorporated by reference the 
provisions of 40 CFR parts 72 through 78 for purposes of implementing 
an acid rain program that meets the requirements of Title IV of the 
Act. By incorporating by reference, New York has the authority to 
include the applicable requirements of Title IV in permits and to 
enforce such requirements. 201-6.6(b) also provides additional 
information for facilities subject to the Acid Rain Program and 
clarifies that, where an applicable requirement of the Act is more 
stringent than the regulations promulgated under Title IV, both 
requirements will be incorporated into the permit.

B. Options for Approval/Disapproval and Implications

    1. Interim approval. The EPA is proposing to grant interim approval 
to the operating permits program submitted by New York on November 12, 
1993 and supplemented on June 17 and 27, 1996. New York must make the 
following changes to receive full program approval within eighteen 
months of EPA's final approval to grant interim approval program 
status:
    i. New York's definition of `Regulated Air Pollutant' in 6 NYCRR 
200.1(bq) is not consistent with the definition in 40 CFR 70.2 since it 
fails to include pollutants regulated under section 112(r) of the Act. 
Part 70 includes in the definition of Regulated Air Pollutant ``any 
pollutant subject to a standard promulgated under section 112 or other 
requirements established under section 112 of the Act, including 
sections 112(g), (j), and (r) of the Act * * *''. New York's definition 
of regulated air pollutant only includes hazardous air pollutants which 
New York defines by providing a list of the 112(b) pollutants. In order 
to receive full approval, New York must include in the definition not 
only hazardous air pollutants but also pollutants regulated under 
section 112(r) of the Act. As a note, the August 31, 1995 revisions to 
part 70 proposed to eliminate 112(r) pollutants from the definition of 
regulated air pollutant. Therefore, if the revisions to part 70 are 
promulgated as proposed prior to the expiration of EPA's interim 
approval of New York's program, New York may not need to address this 
issue in order to receive full approval.
    ii. Under the reporting requirements of 6 NYCRR 201-6.5(c)(3)(ii), 
New York provides that a permittee can seek to have a violation excused 
as provided in 201-1.4 if such violations are reported as required in 
201-1.4(b). [Note: Although 201-1.4 is part of the state regulation 
pending approval into the State Implementation Plan (SIP), similar 
provisions are already part of the currently-approved SIP at 201.5. 
Part 201-1.4 is not part of the Title V regulation.] The language in 
201-1.4 that provides the DEC Commissioner

[[Page 39621]]

discretion to excuse violations of any applicable emission standard for 
necessary scheduled equipment maintenance, start-up/shutdown 
conditions, malfunctions, and upsets if such violations are unavoidable 
and the permittee meets certain conditions and reporting requirements 
only applies to SIP requirements or State-only requirements. This 
provision does not extend to other Federal requirements such as NSPS, 
NESHAPs or PSD/NSR (although some Federal requirements, such as some 
NSPS rules, provide for an affirmative defense). In order to receive 
full approval, New York must add a sentence to 6 NYCRR 201-
6.5(c)(3)(ii) which clarifies that the discretion to excuse a violation 
under 201-1.4 will not extend to Federal requirements unless the 
specific Federal requirement provides for the affirmative defense 
during start-ups, shutdowns, malfunctions, or upsets.
    iii. 40 CFR 70.6 provides that permits can include alternative 
emission limits, equivalent to those contained in the SIP, as long as 
the SIP allows for alternative emission limits to be made through the 
permit issuance, renewal or significant modification process. However, 
New York's language as found in 6 NYCRR 201-6.5(a)(1)(ii) is overly 
broad in that it allows DEC to provide for an alternative emission 
limit through the part 70 permit issuance, renewal or significant 
modification process at any time, regardless of whether such an 
alternative emission limit is allowed for in a particular regulation 
approved into the SIP. New York's rule also fails to restrict such 
alternative emission limits to only those limits that are equivalent to 
the limits in the SIP. Therefore, this would allow DEC to issue permits 
with alternative emission limits regardless of whether such limits were 
determined to be ``equivalent''. The intent of part 70 is to only grant 
alternative emission limits if allowed for in a State rule that 
provides criteria for determining equivalency and if that rule has been 
approved by EPA into the SIP. Furthermore, New York frequently refers 
to variances in its rules and these variances are not equivalent 
emissions. When the state proposes to approve such variances, EPA 
generally identifies these as requiring SIP revisions (e.g., they 
cannot be handled through permit revision procedures until first 
approved as a source-specific SIP revision (see Table in 40 CFR 
52.1679)). In order to receive full approval, New York must change this 
provision so that it is equivalent to 40 CFR 70.6(a)(1)(iii), in that 
permits will only include alternative emission limitations if provided 
for in the SIP and if the alternative emission limit is determined to 
be equivalent to the limit contained in the SIP.
    iv. New York's regulation does not provide for one of the three 
elements defined to provide operational flexibility under section 
502(b)(10) of the Act. 40 CFR 70.2 defines ``section 502(b)(10) 
changes'' as changes that contravene an express permit term as long as 
such changes would not violate applicable requirements or contravene 
federally enforceable permit terms and conditions that are monitoring, 
recordkeeping, reporting, or compliance certification requirements. 
Because 40 CFR 70.4(b)(12)(i) requires that State part 70 programs 
allow for such flexibility, New York must add to its program this type 
of flexibility in order to receive full program approval. However, the 
August 29, 1994 proposal to revise part 70 would remove the definition 
of ``section 502(b)(10) changes'' and requests comment on narrowing the 
types of changes eligible under section 502(b)(10) to emissions trading 
and not to changes that contravene a permit condition. Therefore, if 
the revisions to part 70 are promulgated as proposed prior to the 
expiration of EPA's interim approval of New York's program, New York 
may not need to address this issue in order to receive full program 
approval.
    v. New York's definition of ``major source'' at 6 NYCRR 201-
2(b)(21) is not consistent with the definition in 40 CFR 70.2. In 40 
CFR 70.2, the last category in the list of 27 categories of stationary 
sources in which fugitive emissions must be included to determine if a 
source is subject to Title V includes ``* * * all other stationary 
source categories regulated by a standard promulgated under section 111 
or 112 of the Act, but only with respect to those air pollutants that 
have been regulated for that category.'' New York's rule limits this 
last provision to source categories for which EPA has completed a 
rulemaking under 302(j) of the Act. Therefore, New York's rule would 
only require fugitives to be included in determining applicability for 
sources in categories subject to a New Source Performance Standard 
established prior to August 7, 1980. Because New York's rule is less 
stringent than the current part 70 rule which requires all NSPS sources 
to include fugitives for those air pollutants that have been regulated 
for that category, New York needs to revise its definition of major 
source to be consistent with the definition in part 70. However, as a 
note, revisions to part 70 were proposed on August 29, 1994 and August 
31, 1995 which would change the last category of sources in which 
fugitives must be included in determining applicability to only those 
source categories in which the Administrator has made an affirmative 
decision under section 302(j) of the Act. Therefore, if part 70 is 
promulgated as proposed prior to the expiration of EPA's interim 
approval of New York's program, New York may not need to address this 
issue in order to receive full program approval.
    vi. 6 NYCRR 201-6.5(f)(3) on emissions trading under the SIP does 
not include the gatekeeper of 40 CFR 70.4(b)(12) which states that 
changes do not need to undergo a permit revision as long as the changes 
are not modifications under any provision of Title I of the Act. 6 
NYCRR 201-6.5(f)(4) on emissions trading under a cap does not include 
the two gatekeepers of 40 CFR 70.4(b)(12) which state that changes do 
not need to undergo a permit revision as long as the changes are not 
modifications under any provision of Title I of the Act and the changes 
do not exceed the emissions allowable under the permit. While New 
York's enabling legislation includes these gatekeepers under ECL 
Sec. 19-0311(p), EPA believes that the gatekeepers should also be in 
the regulations, because it will be the regulations that sources will 
be referencing to submit applications and to comply with New York's 
operating permits program. Therefore, in order for New York to receive 
full approval, the gatekeepers in 40 CFR 70.4(b)(12) must be added to 
New York's Part 201 rule.
    vii. 40 CFR 70.7(e)(2)(i)(B) states that minor permit modification 
procedures may be used for permit modifications involving the use of 
economic incentives, marketable permits, emissions trading, and other 
similar approaches ``to the extent that such minor permit modification 
procedures are explicitly provided for in an applicable implementation 
plan or in applicable requirements promulgated by EPA''. 6 NYCRR 201-
6.7(c)(2), which provides for use of minor modification procedures for 
permit modifications involving the use of economic incentives and 
marketable permits, does not include the language quoted above. In 
order to receive full program approval, New York must revise its rule 
to provide that minor modification procedures can only be used for 
these types of changes if explicitly provided for in the underlying SIP 
or EPA rule. However, as a note, EPA is revising the permit revision 
procedures in part 70. Therefore, if part 70 is promulgated in such a 
way that this is no longer an issue before the expiration of EPA's

[[Page 39622]]

interim approval of New York's program, New York may not need to 
address this issue in order to receive full program approval.
    viii. 40 CFR 70.4(b)(3)(xii) requires that petitions for judicial 
review be filed no later than 90 days after the final permit action, or 
such shorter time as the State shall designate. While New York's law 
allows DEC to adopt a 90 day statute of limitations for judicial review 
of final permit actions, DEC prefers to retain the four month statute 
of limitations as provided in Article 78 of the New York Civil Practice 
Law and Rules. However, in order for New York to be consistent with 
part 70 and receive full approval, New York must adopt a 90 day statute 
of limitations through rulemaking. As a note, the August 29, 1994 
revisions to part 70 propose to extend the filing date of requesting 
judicial review from 90 days to 125 days. Therefore, if part 70 is 
promulgated as proposed prior to 6 months before the expiration of 
EPA's interim approval of New York's program, New York may not need to 
address this issue in order to receive full program approval.
    2. Federal oversight and sanctions. This interim approval extends 
for a period of up to 2 years. During the interim approval period, the 
State is protected from sanctions for failure to have a program, and 
EPA is not obligated to promulgate a Federal permits program in the 
State. 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 EPA's 
granting of interim approval, as does the 3-year time period for 
processing the initial permit applications.
    Following final interim approval, if New York fails to submit a 
complete corrective program for full approval by the date six months 
before expiration of the interim approval, EPA would start an 18-month 
clock for mandatory sanctions. If New York then fails to submit a 
corrective program that EPA finds complete before the expiration of 
that 18-month period, EPA is required to apply one of the two sanctions 
listed in section 179(b) of the Act, and, once applied, the sanction 
will remain in effect until EPA determines that New York has corrected 
the deficiency by submitting a complete corrective program. Moreover, 
if the Administrator finds a lack of good faith on the part of New 
York, both sanctions under section 179(b) will apply after the 
expiration of the 18-month period until the Administrator determines 
that New York had come into compliance. In any case, if, six months 
after application of the first sanction, New York still has not 
submitted a corrective program that EPA finds complete, the second 
sanction will be applied.
    If, following final interim approval, EPA disapproves New York's 
complete corrective program for full approval, EPA will be required to 
apply one of the section 179(b) sanctions on the date 18-months after 
the effective date of the disapproval, unless prior to that date New 
York has submitted a revised program and EPA has determined that it 
corrected the deficiencies that prompted the disapproval. Moreover, if 
the Administrator finds a lack of good faith on the part of New York, 
both sanctions under section 179(b) shall apply after the expiration of 
the 18-month period until the Administrator determines that New York 
had come into compliance. In all cases, if, six months after EPA 
applies the first sanction, New York has not submitted a revised 
program that EPA has determined corrected the deficiencies that 
prompted disapproval, a second sanction is required.
    In addition to the above, discretionary sanctions may be applied 
where warranted any time after the expiration of an interim approval 
period if New York has not timely submitted a complete corrective 
program or EPA has disapproved a corrective program submittal. 
Moreover, if EPA has not granted full approval to a New York program by 
the expiration of an interim approval, EPA must promulgate, administer 
and enforce a Federal permits program for New York upon interim 
approval expiration.
    3. Other actions. Requirements for approval, specified in 40 CFR 
70.4(b), encompass section 112(l)(5) approval requirements for 
delegation of section 112 standards as promulgated by EPA as they apply 
to part 70 sources. Section 112(l)(5) requires that the State's program 
contain adequate authorities, adequate resources for implementation, 
and an expeditious compliance schedule, which are also requirements 
under part 70. Therefore, the EPA is also proposing to grant approval 
under section 112(l)(5) and 40 CFR 63.91 of the State's program for 
receiving delegation of section 112 standards that are unchanged from 
Federal standards as promulgated for both part 70 and non-part 70 
sources. In addition, EPA is also delegating to New York all existing 
section 111 standards.
    The scope of the New York part 70 program approved in this notice 
applies to all part 70 sources (as defined in the approved program) 
within the State of New York, except any sources of air pollution over 
which an Indian Tribe has jurisdiction. See, e.g., 59 FR 55813, and 
55815-55818 (November 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 Act; see also 59 FR 43956, and 
43962 (August 25, 1994); and 58 FR 54364 (October 21, 1993).

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 located in New York and at the 
DEC office in Albany. 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 rulemaking. 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 August 29, 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 Act

    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 annual 
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

[[Page 39623]]

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 proposed approval action being 
promulgated today does not include a federal mandate that may result in 
annual estimated costs of $100 million or more to either State, local, 
or tribal governments in the aggregate, or to the private sector. This 
federal action approves pre-existing requirements under State or local 
law, and imposes no new federal requirements. Accordingly, no 
additional costs to 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: July 18, 1996.
Jeanne M. Fox,
Regional Administrator.
[FR Doc. 96-19325 Filed 7-29-96; 8:45 am]
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