[Federal Register Volume 63, Number 65 (Monday, April 6, 1998)]
[Proposed Rules]
[Pages 16751-16754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8960]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[DE-031-1011; FRL-5991-4]


Approval and Promulgation of Air Quality Implementation Plans; 
Delaware--Minor New Source Review and federally Enforceable State 
Operating Permit Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing limited approval of a State Implementation 
Plan (SIP) revision submitted by the State of Delaware pursuant to 
requirements of the Clean Air Act (CAA). This SIP revision amends 
Delaware's minor New Source Review (NSR) permit program. It also 
creates a federally Enforceable State Operating Permits Program 
(FESOPP) which provides a mechanism for the terms and conditions of a 
permit issued pursuant to Regulation No. 2 to be made ``federally 
enforceable'' for purposes of limiting a source's potential to emit 
(PTE) a regulated air pollutant. EPA is proposing limited approval of 
changes to the minor NSR program, because while the SIP revision 
submitted by Delaware strengthens the SIP, it does not fully meet the 
current Federal requirements for public participation. EPA is proposing 
full approval of the FESOPP.

DATES: Comments must be received on or before May 6, 1998.

[[Page 16752]]

ADDRESSES: Comments may be mailed to Ms. MaryBeth Bray, Engineer, 
Permit Programs Section, Air Protection Division (3AP11), U.S. 
Environmental Protection Agency, Region III, 841 Chestnut Building, 
Philadelphia, Pennsylvania 19107. Copies of the documents relevant to 
this action are available for public inspection during normal business 
hours at the Air, Radiation, and Toxics Division, U.S. Environmental 
Protection Agency, Region III, 841 Chestnut Building, Philadelphia, 
Pennsylvania 19107; and Delaware Department of Natural Resources & 
Environmental Control, 89 Kings Highway, P.O. Box 1401, Dover, Delaware 
19903.

FOR FURTHER INFORMATION CONTACT: Ms. MaryBeth Bray, (215) 566-2632, at 
the EPA Region III address.

SUPPLEMENTARY INFORMATION:

I. Background

    On June 4, 1997, the State of Delaware submitted a revision of its 
SIP for Regulation No. 2--PERMITS. This revision amends the State's 
minor NSR program and creates a FESOPP which provides a mechanism for 
the terms and conditions of a permit issued pursuant to Regulation No. 
2 to be made ``federally enforceable'' for purposes of limiting a 
source's PTE a regulated air pollutant.

A. Minor New Source Review

    Section 110(a)(2)(C) of the Clean Air Act (CAA) requires every SIP 
to ``include a program for the . . . regulation of the modification and 
construction of any stationary source within the areas covered by the 
plan as necessary to assure that national ambient air quality standards 
are achieved.'' EPA's regulations now codified at 40 CFR 51.160-51.164 
have since the early 1970s required a NSR program be included in every 
SIP. This requirement is separate from the requirement also set forth 
in section 110(a)(2)(C) that a State's SIP have ``major'' NSR 
permitting programs under part C for the prevention of significant 
deterioration of air quality (PSD) and part D for nonattainment area 
permitting (nonattainment NSR) of title I.

B. Federally Enforceable State Operating Permit Programs

    Many stationary source requirements of the CAA apply only to 
``major'' sources. Major sources are those sources whose emissions of 
air pollutants exceed applicability threshold emissions levels 
specified in various portions of the CAA. To determine whether a source 
is major, the CAA focuses not only on a source's actual emissions, but 
also on its potential emissions (i.e., ``PTE''). Thus, a source that 
has maintained actual emissions at levels below the major source 
threshold could still be subject to major source requirements if it has 
the PTE major amounts of air pollutants. In situations where 
unrestricted operation of a source would result in a PTE above major 
source levels, one way such a source may legally avoid program 
requirements is by accepting federally-enforceable permit conditions 
which limit its PTE below the applicable major source thresholds. As a 
result, the source becomes what is commonly referred to as a 
``synthetic minor'' source. 1Federally-enforceable permit 
conditions, if violated, are subject to enforcement by EPA and by 
citizens in addition to the state or local agency. On June 28, 1989, 
EPA published guidance on the basic requirements for EPA approval of 
(non-title V) federally enforceable state operating permit programs 
commonly referred to as FESOPPs. See 54 FR 27274. Permits issued 
pursuant to such programs may be used to establish federally 
enforceable limits on a source's potential emissions to create 
``synthetic minor'' sources.
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    \1\  Several other mechanisms for major sources (including major 
sources of hazardous air pollutants) to become ``synthetic minors'' 
and legally avoid major source program requirements exist. For more 
information, refer to the memorandums entitled ``Extension of 
January 25, 1995 Potential to Emit Transition Policy (August 28, 
1996), ``Release of Interim Policy on Federal Enforceability of 
Limitations on Potential to Emit'' (January 22, 1996), ``Options for 
Limiting the Potential to Emit (PTE) of a Stationary Source under 
Section 112 and Title V of the Clean Air Act (Act)'' (January 25, 
1995), and ``Approaches to Creating Federally-Enforceable Emissions 
Limits'' (November 3, 1993).
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II. Summary of Delaware's SIP Revisions

A. Minor NSR

    In order to evaluate the approvability of Delaware's submittal as a 
SIP revision, the changes from the current SIP-approved version of 
Regulation No. 2 must meet all applicable requirements (procedural and 
substantive) of 40 CFR part 51 and the CAA. EPA's requirements for SIP 
approval applicable to minor NSR permitting programs are established in 
40 CFR part 51, subpart I--Review of New Sources and Modifications, 
Sec. Sec. 51.160. through 51.164. Other sections of subpart I, 
applicable only to new sources and modifications which are major, do 
not apply and are thus not addressed in this analysis. 2The 
docket for this rulemaking action contains a Technical Support Document 
(TSD) prepared by EPA which more fully details the evaluation it 
performed to determine that Delaware's SIP revision meets the 
requirements of 40 CFR 51.160-51.164. The TSD is available, upon 
request, from the EPA Region listed in the Addresses section of this 
document. Overall, the revised Regulation No. 2 is a strengthening of 
Delaware's current SIP-approved minor NSR program.
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    \2\ 2 Delaware has a separate rule to meet the requirements of 
subpart I applicable to major sources, namely, Regulation No. 25--
``Requirements for Preconstruction Review''.
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    With the exception of certain public participation requirements, as 
described below, EPA has determined that Delaware's revised Regulation 
No. 2 fully meets the requirements of 40 CFR 51.160-51.164 for minor 
NSR programs.
    Public Participation--The requirements for public participation of 
minor NSR programs are set forth in 40 CFR 51.161 (Public Availability 
of Information). Among the requirements for public participation are 
the following:

    (a) Availability for public inspection in at least one location in 
the area affected of the information submitted by the owner or operator 
and of the permitting authority's analysis of the effect on air 
quality;
    (b) A 30-day period for submittal of public comment; and
    (c) A notice by prominent advertisement in the area affected of the 
location of the source information and the agency's analysis of the 
effect on air quality.

    Section 12.2 of Delaware's Regulation No. 2 requires the Delaware 
Department of Natural Resources and Environmental Control (Department) 
to make available in at least one location in the state a public file 
containing a copy of all materials submitted by the applicant (except 
those granted confidential treatment). It also requires the Department 
to place an advertisement in a newspaper of general circulation in the 
county in which the source is located and in a daily newspaper of 
general circulation throughout the state. These notices must include:

    (1) The fact that the application has been received and the 
facility's name and location;
    (2) A brief description of the nature of the application, including 
the activities and emissions involved; and
    (3) A contact person for the Department, the place where the permit 
file can be inspected, and procedures to request a hearing.


[[Page 16753]]


    The Department must also send the above information by mail to 
anyone who has requested to be placed on a mailing list. The Department 
must hold a public hearing on the application if it receives a 
meritorious request to do so within 15 days of the public notice, or if 
the Department deems it to be in the best interest of the State to do 
so. Within 20 days of a public hearing, the Department must issue a 
public notice announcing the date, time and location of the hearing. 
The Department must consider all comments submitted by the applicant 
and the public in reaching its final determination.
    The current SIP-approved version of Regulation No. 2 does not 
contain any provisions for public participation of minor NSR permits. 
However, prior to the revision of Regulation No. 2, EPA understands 
that Delaware followed the public participation provisions of its 
statute, 7 Del. C., Chapter 60, Section 6004, which is not part of the 
SIP. The statute provides that the public shall have a minimum of 15 
days to request a public hearing, unless Federal law requires a longer 
time, in which case the longer time shall be stated. However, the 
revised Regulation No. 2 defers to the statutory minimum 15-day public 
comment period. Since the current SIP-approved version of Regulation 
No. 2 does not provide any public participation procedures, the revised 
Regulation No. 2 is a strengthening of the SIP, even though it does not 
fully meet the public comment requirements of 40 CFR 51.161 which 
specify a 30-day public comment period.
    On August 31, 1995, EPA proposed revisions to 40 CFR 51.161 to 
provide that, except for certain specified activities (which would 
still be required to have a 30-day comment period), states may vary the 
procedures for, and timing of, public participation in light of the 
environmental significance of the activity. See 60 FR 45564. EPA is in 
the process of finalizing this rulemaking action. It is, therefore, 
possible that Delaware's revised Regulation No. 2, which provides for a 
minimum 15-day public comment period, would be consistent with EPA's 
final revisions to 40 CFR 51.161, at least for some types of minor NSR 
activities.
    EPA has determined that the revised Regulation No. 2 overall is a 
strengthening of the current minor NSR program in Delaware's SIP. The 
revised Regulation No. 2 meets the criteria of 40 CFR 51.160-51.164, 
with the exception of the requirements of 40 CFR 51.161(b)(2), which 
requires a 30-day period for submittal of public comment. As explained 
above, Delaware's revised Regulation No. 2 strengthens the SIP by 
specifying public participation procedures and by providing a minimum 
15-day public comment period (i.e., time period provided for the public 
to request a public hearing). Therefore, EPA believes that Delaware's 
revised minor NSR regulation warrants limited approval.
    Under a limited approval, if EPA's future final rulemaking action 
for revisions to 40 CFR 51.161 is consistent with Delaware's public 
participation requirements under Regulation No. 2, the limited approval 
would convert to a full approval. However, if the final revisions to 40 
CFR 51.161 are not consistent, but more stringent than, Delaware's 
Regulation No. 2, EPA would make a SIP call for Delaware to amend its 
minor NSR public participation procedures in accordance with EPA's 
final regulatory changes to 40 CFR 51.161.

B. Federally Enforceable State Operating Permits Program

    EPA's Federal enforceability criteria applicable to state operating 
permit program (non-title V) SIP submittals are discussed in a June 28, 
1989 Federal Register (54 FR 27274). In the June 28, 1989 notice, EPA 
amended the definition of ``federally enforceable'' to clarify that 
terms and conditions contained in state-issued operating permits are 
federally enforceable for purposes of limiting a source's PTE, provided 
that the state's operating permits program is approved into the SIP 
under section 110 of the CAA as meeting certain conditions, and 
provided that the permit conforms to the requirements of the approved 
program. The conditions for EPA approval discussed in the June 28, 1989 
notice establish five criteria for approving a state operating permit 
program. See 54 FR 27274-27286. In summary, the criteria require state 
programs to:

    (a) Be approved into the SIP;
    (b) Impose legal obligations to conform to the permit limitations;
    (c) Provide for limits that are enforceable as a practical matter;
    (d) Issue permits through a process that provides for review and an 
opportunity for comment by the public and by EPA; and
    (e) Ensure that there will be no relaxation of otherwise applicable 
Federal requirements.

    The TSD prepared by EPA for this rulemaking action describes each 
of the criteria for approval of a state's program for the issuance of 
federally enforceable operating permits for purposes of limiting a 
source's PTE and how Delaware's SIP submittal satisfies those criteria.
    The revised Regulation No. 2 establishes a process whereby sources 
can voluntarily seek to identify terms and conditions of an operating 
permit as federally-enforceable. EPA interprets this to mean that 
limits on PTE would be recognized for purposes of avoiding the 
applicability of major source requirements. Such terms and conditions 
would be specifically designated as ``federally enforceable'' within 
each permit. Regulation No. 2 establishes a separate public 
participation process, including a 30-day public comment period, for 
sources that opt to make terms and conditions federally-enforceable.
    As explained above, Regulation No. 2 also implements Delaware's 
minor NSR program, as required under the CAA and 40 CFR 51.160-51.164. 
In this proposed rulemaking notice, EPA is also taking action on 
revisions to Delaware's minor NSR program. Since construction permits 
under Regulation No. 2 are converted into operating permits after the 
source completes construction, any permit terms designed to meet minor 
NSR requirements are transferred to a Regulation No. 2 operating 
permit. Because Regulation No. 2 operating permits become the permits 
in which the minor NSR applicable requirements reside, EPA considers 
the terms and conditions of Regulation No. 2 operating permits to be 
federally-enforceable (as well as Regulation No. 2 construction 
permits). In other words, EPA views Delaware's minor NSR program as 
being comprised of Regulation No. 2 as a whole--including both 
construction and operating permits issued under Regulation No. 2. 
However, although Regulation No. 2 operating permits are considered 
federally-enforceable, EPA currently does not recognize PTE limits 
contained in those permits as legitimate limits for sources wishing to 
avoid major source applicability, because the existing SIP-approved 
version of Regulation No. 2 does not meet EPA's minimum criteria for 
establishing PTE limits, including practical enforceability and public 
participation. (See 54 FR 27274; June 28, 1989). Today's action 
proposes to approve the revised Regulation No. 2 because it now does 
meet EPA's criteria for establishing federally enforceable PTE limits, 
so that EPA will recognize a source's limits on PTE for avoiding major 
source applicability, so long as the individual permit issued under the 
approved program meets those same requirements. EPA reserves the right 
to deem any individual permit as not

[[Page 16754]]

``federally enforceable'' for purposes of limiting PTE (and, thus, 
avoiding major source requirements) if a permit contains terms and 
conditions which are not quantifiable or practically enforceable in 
accordance with the revised version of Regulation No.2 proposed for SIP 
approval and the June 28, 1989 criteria.
    EPA has determined that the Federal enforceability ``opt-in'' 
process established in revised Regulation No. 2 (whereby sources can 
request to have certain permit terms and conditions be designated as 
federally enforceable for purposes of limiting PTE) fully meets the 
requirements of EPA's June 28, 1989 criteria for federally enforceable 
state operating permits programs. EPA proposes full approval of the 
Regulation No. 2 provisions as meeting the June 28, 1989 criteria for a 
FESOPP.
    EPA is soliciting public comments on the issues discussed in this 
document or on other relevant matters. These comments will be 
considered before taking final action. Interested parties may 
participate in the Federal rulemaking procedure by submitting written 
comments to the EPA Regional office listed in the Addresses section of 
this document.

III. Proposed Action

    EPA is proposing limited approval of revisions to the Delaware 
minor NSR program submitted on June 4, 1997, because the revised 
Regulation No. 2 strengthens the SIP, but does not fully meet the 
current requirements for public participation of minor NSR programs 
under 40 CFR 51.161. EPA is proposing full approval of the provisions 
of Regulation No. 2 establishing a FESOPP which provides a mechanism 
for sources to request that certain terms and conditions of Regulation 
No. 2 permits be designated as federally-enforceable for purposes of 
limiting the PTE regulated air pollutants. Final action by EPA to 
approve Delaware's FESOPP would confer Federal enforceability status, 
and EPA would recognize limits on PTE for sources to avoid major source 
requirements, to existing permits which are issued in accordance with 
the revised Regulation No. 2 and the June 28, 1989 criteria, including 
permits which have been issued prior to EPA's final action.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any state implementation plan. Each request for revision to 
the state implementation plan shall be considered separately in light 
of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.

IV. Administrative Requirements

A. Executive Order 12866

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from E.O. 12866 review.

B. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000. SIP approvals under sections 110 and 301, and subchapter I, 
part D of the CAA do not create any new requirements but simply approve 
requirements that the State is already imposing. Therefore, because the 
Federal SIP approval does not impose any new requirements, EPA 
certifies that it does not have a significant impact on any small 
entities affected. Moreover, due to the nature of the Federal-State 
relationship under the CAA, preparation of a flexibility analysis would 
constitute Federal inquiry into the economic reasonableness of state 
action. The Clean Air Act forbids EPA to base its actions concerning 
SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246, 
255-66 (1976); 42 U.S.C. 7410(a)(2).

C. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate; or to 
private sector, of $100 million or more. Under Section 205, EPA must 
select the most cost-effective and least burdensome alternative that 
achieves the objectives of the rule and is consistent with statutory 
requirements. Section 203 requires EPA to establish a plan for 
informing and advising any small governments that may be significantly 
or uniquely impacted by the rule. EPA has determined that the approval 
action proposed does not include a Federal mandate that may result in 
estimated costs of $100 million or more to either State, local, or 
tribal governments in the aggregate, or to the private sector. This 
Federal action approves pre-existing requirements under State or local 
law, and imposes no new requirements. Accordingly, no additional costs 
to State, local, or tribal governments, or to the private sector, 
result from this action.
    The Regional Administrator's decision to approve or disapprove this 
revision to Delaware Regulation 2 will be based on whether it meets the 
requirements of section 110(a)(2)(a)-(K) and part D of the Clean Air 
Act, as amended, and EPA regulations in 40 CFR part 51.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, New source review, Reporting and recordkeeping requirements.

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

    Dated: March 25, 1998.
Thomas Voltaggio,
Acting Regional Administrator, Region III.
[FR Doc. 98-8960 Filed 4-3-98; 8:45 am]
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