[Federal Register Volume 66, Number 197 (Thursday, October 11, 2001)]
[Proposed Rules]
[Pages 51895-51904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25592]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[TX-002; FRL-7079-1]


Clean Air Act Proposed Full Approval Operating Permits Program 
for the State of Texas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed full approval.

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SUMMARY: The EPA proposes full approval of the Operating Permit Program 
submitted by the Texas Natural Resource Conservation Commission (TNRCC 
or Commission) based on the revisions submitted on June 12, 1998, and 
June 1, 2001, which satisfactorily address the program deficiencies 
identified in EPA's June 7, 1995, and June 25, 1996, Interim Approval 
(IA) Rulemakings. In addition, today's document takes no action on 
additional provisions submitted June 1, 2001, which relate to general 
operating permits, public participation, compliance assurance 
monitoring, and periodic monitoring. The EPA will take appropriate 
action on these items in a separate Federal Register action.

DATES: The EPA must receive your written comments on this proposal no 
later than November 13, 2001. You must address your comments to the 
contact indicated below.

ADDRESSES: Please address your written comments on this action to Ms. 
Jole C. Luehrs, Chief, Air Permitting Section, Attention: Mr. Stanley 
M. Spruiell, at the EPA Region 6 Office listed below. You may review 
copies of the State's submittal and other supporting information during 
normal business hours at the following locations. If you wish to 
examine these documents, you should make an appointment with the 
appropriate office at least 24 hours before visiting day.
    EPA, Region 6, Air Permitting Section (6PD-R), 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733.
    TNRCC, Office of Air Quality, 12124 Park 35 Circle, Austin, Texas 
78753.

FOR FURTHER INFORMATION CONTACT: Mr. Stanley M. Spruiell, Air 
Permitting Section (6PD-R), EPA, Region 6, 1445 Ross Avenue, Suite 700, 
Dallas, Texas

[[Page 51896]]

75202-2733, telephone (214) 665-7212 or e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION:
Throughout this document ``we,'' ``us,'' or ``our'' means EPA.

Table of Contents

I. What is the Operating Permit Program?

II. What Is Being Addressed in This Document?

III. What Are the Program Changes That We Propose to Approve?

A. Minor New Source Review (MNSR)/Part 70 Integration
B. Emergency Provisions
C. Operational Flexibility
D. Definition of Major Source
E. Definition of Regulated Pollutant
F. Treatment of Research and Development (R&D) Facilities
G. Fugitive Emissions Not Included in Permit Application
H. Permit Additions
I. Prohibition of Case-By-Case Determinations and Minor Permit 
Revisions
J. Prohibition on Operating Changes Until Source Has Submitted Minor 
Permit Application
K. EPA and Affected State Notification and Review, EPA Objection, 
and Permitting Authority Deadline to Issue or Deny Permit Additions
L. Source Applicability of Part 70
M. Definition of Title I Modification
N. Compliance Schedule Requirements
O. Application Shield for Significant Modifications
P. Changes allowed Under Administrative Permit Amendments
Q. Renewal of General Permits
R. Public Notice to Include Emissions Change
S. Interpretation Shield
T. Off-Permit Changes

IV. Permit Fee Demonstration and Adequate Personnel Funding

V. Did Texas Submit Other Title V Program Revisions?

VI. Audit Privilege Law

VII. Miscellaneous Full Approval Issues

VIII. What is Involved in This Proposed Action?

A. Proposed Action
B. Indian Lands and Reservations
C. Citizen Comment Letters

IX. Administrative Requirements

I. What Is the Operating Permit Program?

    Title V of the Clean Air Act (the ``Act'') Amendments of 1990 
required all States to develop Operating Permit Programs that meet 
certain Federal criteria. In implementing the title V Operating Permit 
Programs, permitting authorities require certain sources of air 
pollution to obtain permits that contain all applicable requirements 
under the Act. The focus of the title V Operating Permit Program is to 
facilitate compliance and improve enforcement by issuing each source a 
permit that consolidates all of the applicable requirements of the Act 
into a federally enforceable document. This consolidation of all 
applicable requirements enables the source, the public, and the 
permitting authority to readily determine which of the Act's 
requirements apply and how compliance with those requirements is 
determined.
    Sources required to obtain an operating permit under this program 
include ``major'' sources of air pollution as defined by title V and 
certain other sources specified in the Act or in EPA's implementing 
regulations. This includes all sources regulated under the acid rain 
program, regardless of size, which must obtain operating permits. 
Examples of major sources include those that have the potential to emit 
100 tons per year (tpy) or more of volatile organic compounds (VOC), 
carbon monoxide (CO), lead, sulfur dioxide, nitrogen oxides 
(NOX), or particulate matter (PM-10); those that emit 10 tpy 
of any single hazardous air pollutant (HAP) specifically listed under 
the Act; or those that emit 25 tpy or more of a combination of HAP. In 
areas that are not meeting the National Ambient Air Quality Standards 
for ozone, CO, or PM-10, major sources are defined by the gravity of 
the nonattainment classification. For example, in ozone nonattainment 
areas classified as ``serious,'' major sources include those with the 
potential of emitting 50 tpy or more of VOC or NOX.

II. What Is Being Addressed in This Document?

    Where a title V Operating Permit Program substantially, but not 
fully, met the criteria outlined in the implementing regulations 
codified at 40 CFR part 70, we granted interim approval (IA) contingent 
on the State revising its program to correct the deficiencies. Because 
Texas' Operating Permit Program substantially, but not fully, met the 
requirements of part 70, we granted a source category-limited IA to the 
program in a rulemaking published on June 25, 1996 (61 FR 32693). A 
source category-limited Operating Permits Program is limited to certain 
specified sources.\1\ This approval was scheduled to expire July 27, 
1998, by which time the State would have been required to have received 
full approval. However, we subsequently promulgated nationally 
applicable rulemakings that extended all State Operating Permit Program 
IAs to December 1, 2001. See 63 FR 40054, July 27, 1998, and 65 FR 
32035 (May 22, 2000).
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    \1\ In Texas, this program only covered sources with a Standard 
Industrial Classification (SIC) code of 1311, 1321, 4911, 4922, 
4293, and 5171.
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    The IA notice stipulated numerous conditions that had to be met in 
order for the State's program to receive full approval. Texas submitted 
revisions to its interim approved Operating Permit Program dated June 
12, 1998, and June 1, 2001. Texas also submitted supplementary 
information to EPA on August 22, 2001, August 23, 2001, and September 
20, 2001. These submittals are described below. This FR notice 
describes changes that have been made to Texas' Operating Permit 
Program which correct the IA deficiencies.
    June 12, 1998. Texas submitted regulations to us which promulgated 
a new Operating Permit Program to cover all sources. Its previous 
Operating Permits Program covered only sources with certain SIC 
codes.\2\ These regulations were adopted on October 15, 1997, and were 
promulgated in the Texas Register on October 31, 1997. This submittal 
corrected some but not all IA deficiencies. To date, we have not acted 
on the June 12, 1998, submittal.
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    \2\ Footnote 1, supra.
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    June 1, 2001. Texas submitted the following revisions to its 
operating permits regulations:
     Regulations promulgated in the Texas Register on February 
26, 1999, concerning general operating permits.
     Regulations promulgated in the Texas Register on September 
24, 1999, concerning the State's procedural rules on public 
participation;
     Regulations promulgated in the Texas Register on September 
1, 2000, concerning general operating permits and compliance assurance 
monitoring; and,
     Regulations adopted May 9, 2001, and promulgated in the 
Texas Register on May 25, 2001, which correct the remaining IA 
deficiencies.
    In today's action, we are proposing to approve revisions as 
identified below which the TNRCC adopted October 15, 1997 (submitted 
June 12, 1998) and May 9, 2001 (submitted June 1, 2001) which correct 
Texas' IA deficiencies. We will take appropriate action on the 
remaining provisions of the June 1, 2001, submittal in a separate FR 
action.
    Following the June 1, 2001, submittal, Texas submitted 
supplementary information as follows:
    August 22, 2001. A letter from Mr. Jeffrey A. Saitas, P.E., 
Executive Director, TNRCC, to Mr. Gregg Cooke, Regional Administrator, 
Environmental Protection Agency, Region 6. This letter

[[Page 51897]]

included Texas' four year cost projection for its Operating Permits 
Program.
    August 23, 2001. The TNRCC submitted a notice to EPA (letter from 
Mr. Jeffrey A. Saitas, P.E., Executive Director, Texas Natural Resource 
Conservation Commission, to Mr. Carl E. Edlund, Director, Multimedia 
Planning and Permitting Division) informing EPA that it would not be 
using its upset rules to satisfy the emergency provisions of 40 CFR 
70.6(g), and thus removed these provisions from its June 1, 2001, 
submittal.
    September 20, 2001. Texas provided supplemental information to 
clarify the procedures that it will follow to incorporate the 
provisions of its MNSR permits into its title v operation permits.
    We propose to grant full approval of the Texas Operating Permits 
Program based upon our determination that Texas has corrected the 
deficiencies identified in the IA program. The following sections of 
this preamble summarize each IA deficiency, the revisions that Texas 
has submitted, and our basis for determining that the deficiency has 
been corrected.
    We have also prepared a Technical Support Document which contains 
our complete evaluation and analysis of the IA deficiencies and our 
basis for finding that each deficiency has been corrected.

III. What Are the Program Changes That We Propose To Approve?

    As stipulated in the June 7, 1995 (60 FR 30037), and June 25, 1996 
(61 FR 32693), Federal Register Documents, full approval of Texas' 
title V Operating Permit Program was made contingent upon the following 
rule changes to correct the IA deficiencies identified therein.

A. MNSR/Part 70 Integration

    In the June 7, 1995, document, EPA pointed out that chapter 122 did 
not properly address MNSR as an applicable requirement. Specifically, 
we noted that the definition of ``applicable requirement'' in section 
122.10 excluded MNSR as an applicable requirement and was inconsistent 
with the Federal definition of applicable requirements in 40 CFR 70.2. 
We also identified the following sections of chapter 122 as directly 
related to and a part of the MNSR/part 70 integration issue: permit 
application (sections 122.130-122-139), permit revisions (sections 
122.210-122.221), and permit content (sections 122.141-122.145) (60 FR 
at 30039).
    On May 9, 2001, Texas made the following revisions to chapter 122 
pertaining to MNSR:
     Section 122.10(2)--Definition of Applicable Requirement. 
Texas revised the definition of ``applicable requirement'' to add the 
following as applicable requirements: (1) all of the requirements of 
chapter 106, subchapter A (Permits by Rule--General Requirements), and 
(2) the requirements of chapter 116 (Control of Air Pollution by 
Permits for New Construction or Modification). These provisions are 
Texas' regulations for authorizing the construction of new and modified 
sources, including MNSR. By adding these provisions as applicable 
requirements, Texas now recognizes MNSR as an applicable requirement. 
By revising the definition of applicable requirement, Texas also 
corrected EPA concerns regarding permit revisions (sections 122.210--
122.221). Texas also revised the following sections of Chapter 122 
relating to permit applications and permit content to require inclusion 
of MNSR in these areas:
     Section 122.132(e)(11)--Permit Applications. As revised, 
this section provides that for any application for which TNRCC has not 
authorized initiation of public notice by the effective date of the 
revisions (June 3, 2001), the applicant must include any 
preconstruction authorizations that are applicable to emission units at 
the site.
     Section 122.142(b)(3)--Permit Content. As revised, this 
section provides that each title V permit for which TNRCC has not 
authorized initiation of public notice by the effective date of the 
revisions (June 3, 2001), shall contain any preconstruction 
authorization that is applicable to the emission units at the site.
    Therefore, Texas has properly addressed MNSR as an applicable 
requirement.
    On June 20, 1996, EPA promulgated a revision to part 70 that 
provided a mechanism to grant Interim Approval (IA) for programs that 
did not include MNSR requirements. 61 FR 31443, 31448. Texas was 
granted IA of its Operating Permits Program using this mechanism (61 FR 
at 32695). Under this mechanism, Texas is required to revise its rules 
to include MNSR as an applicable requirement in order to receive full 
program approval, and institute proceedings to reopen part 70 permits 
to incorporate excluded MNSR permits as terms of part 70 permits (40 
CFR 70.4(d)(3)(ii)(D)). As noted above, Texas has revised its rules to 
include MNSR.
    On May 9, 2001, Texas adopted section 122.231(c). This provision 
provides that TNRCC will, before December 1, 2001, institute 
proceedings to reopen part 70 permits to incorporate MNSR permits as 
terms of the part 70 permits no later than renewal of the permit if the 
TNRCC had authorized the initiation of public notice for the permit by 
the effective date of the rule (June 3, 2001). These reopenings do not 
have to follow full permit issuance procedures nor the notice 
requirements of section 122.231(e), but may instead follow the permit 
revision procedure in effect under the State's approved part 70 program 
for incorporation of MNSR permits. This abbreviated procedure is 
authorized by 40 CFR 70.4(d)(2)(ii)(D). For the remaining applications 
which the TNRCC has not authorized initiation of public notice by the 
effective date of the revisions (June 3, 2001), the applicant must 
include any preconstruction authorizations that are applicable to 
emission units at the site.
    On September 20, 2001, TNRCC clarified that it will follow the 
procedures described below for incorporating MNSR into its permits:
    1. Newly-issued title V permits. The TNRCC will incorporate MNSR 
permits and permits by rule (PBR) into all newly issued title V 
permits. The title V permit will clearly state: (1) that the terms and 
conditions of MNSR permits and PBR identified and cross-referenced in 
the title V permit are included as applicable requirements; (2) the 
MNSR permits and PBR are incorporated by reference into the title V 
permit by identifying the MNSR permit by its permit number, or the PBR 
by its section number; and (3) the title V permit states that terms and 
conditions of the MNSR permits and PBR are included in the title V 
permit and subject to part 70 requirements.
    Since June 3, 2001 (the effective date of revisions to Chapter 122 
adopted May 9, 2001), TNRCC has been required to implement this 
requirement by incorporating the MNSR permits and permits by rule (PBR) 
into all title V permits for which the initiation of public notice was 
not authorized by June 3, 2001.
    2. Reopening existing title V permits. In accordance with 40 CFR 
70.4(d)(3)(ii)(D), TNRCC will institute proceedings to reopen 
previously issued title V permits and draft title V permits for which 
TNRCC issued or authorized the initiation of public notice prior to 
June 3, 2001. The TNRCC will begin these proceedings no later than 
December 1, 2001. The TNRCC will accomplish this reopening through 
direct notification in writing to each individual permit holder, during 
stakeholder meetings, and through the TNRCC website. Another follow-up 
letter will be sent to each permit holder when it is time to reopen the 
permit

[[Page 51898]]

holder's permit to incorporate the MNSR permits and PBRs. This is 
consistent with the general notice published in the Texas Register 
preamble during the proposal and final adoption of the revisions (26 
Texas Register 890, 892 (January 26, 2001); 26 Texas Register 3747, 
3775-76 (May 25, 2001).
    For existing permits nearing renewal (i.e., those with less than 
two years remaining until renewal), TNRCC will reopen such permits at 
renewal to incorporate the MNSR permits. For permits not close to 
renewal (i.e., those with two or more years remaining until renewal), 
TNRCC will reopen the permits to incorporate the MNSR permits within 
three to four years of initial issuance, which is more expeditious than 
renewal. As provided by 40 CFR 70.4(d)(3)(ii)(D), Texas' proceedings to 
reopen these permits need not follow full permit issuance procedures 
nor the notice requirement of 40 CFR 70.7(f)(3), but may instead follow 
the permit revision procedure in effect under the State's approved part 
70 program for incorporation of MNSR permits. The approved procedure 
for incorporating MNSR permits is TNRCC's procedure for minor 
modification of title V permits. These provisions are set forth in 
sections 122.215 and 112.217, which satisfy the provisions for minor 
permit modification procedures in 40 CFR 70.7(e)(2).
    3. All MNSR permits and PBR included or referenced in title V 
permits will include all monitoring, reporting, and recordkeeping 
requirements of part 70. If an MNSR permit or PBR is determined to be 
deficient in any of these regards, TNRCC will add the necessary 
provisions to ensure that the requirements of part 70 concerning 
periodic monitoring (40 CFR 70.6(a)(3)(i)(B)) and monitoring that is 
sufficient to assure compliance(40 CFR 70.6 (c)(1)) are met. These 
provisions are set forth in sections 122.142.
    4. The TNRCC will ensure that for anyone who asks to see a title V 
permit, the file clerk will provide the entire permit file to that 
person. The table of contents to the title V permit also will indicate 
the location within the title V permit of the MNSR preconstruction 
authorization numbers (file numbers). If the requestor wants to see all 
portions of the title V permit, including the MNSR files, then the 
entire title V permit file, with all its parts, will be provided.
    The TNRCC has informed EPA that it can accept reasonably late 
comments when there are problems with accessing the title V permit 
including the MNSR portions. The extension of time would be evaluated 
on a case by case basis. In addition, the public notice will clarify 
that the TNRCC Regional office file will include the Title V permit and 
the MNSR portions. The TNRCC also agreed that it would facilitate 
access to the entire file to those who cannot get to the TNRCC Regional 
office. The public notice will explain where and how to make known any 
difficulties that a member of the public may have had in getting to the 
Regional office where the MNSR permits are located. In response to 
public comments, including reasonably late comments described above, 
TNRCC will make requested changes to a title V permit if TNRCC deems 
such change to be necessary to ensure that the permit meets the 
requirements of chapter 122.
    5. The TNRCC will also modify title V permits when changes occur 
that require new MNSR permits or PBR, or modifications to existing MNSR 
permits. Modification of the title V permit will incorporate the MNSR 
requirements that apply to the change following the appropriate permit 
revision procedures. This will be accomplished following the permit 
modification procedures in the approved State part 70 program which 
include requirements for significant, minor, or administrative permit 
modification procedures in chapter 122, whichever apply to the 
particular change. Notwithstanding the above, changes eligible for off-
permit treatment, or operational flexibility, may follow the procedures 
for off-permit changes or operational flexibility under the approved 
State part 70 program.
    Based on the foregoing, we have determined that the above 
procedures meet the requirements for reopening permits to incorporate 
MNSR requirements. Therefore, this deficiency has been corrected.

B. Emergency Provisions

    In the June 7, 1995, document, EPA stated that section 122.143 was 
inconsistent with emergency provisions of 40 CFR 70.6(g)(3). Section 
122.143 referenced chapter 101, which contained notification 
requirements for major upsets. Chapter 101 provided the following:

    The owner or operator of a facility must notify the Executive 
Director of TNRCC as soon as possible of any major upset condition 
which causes or may cause an excessive emission that contravenes the 
intent of the statute or the regulations. If the information 
required in the notification is unknown at the time of the initial 
notification, then the owner or operator must provide such 
information as soon as possible, and submit a written report with 
such information not later than two weeks from the onset of the 
upset condition. This allowance for time of agency notification by 
the permittee is inconsistent with 40 CFR 70.6(g)(3) which requires 
the permittee to submit notice of the emergency to the permitting 
authority within two working days.

60 FR at 30043-30044.

    In the 1998 submittal, TNRCC adopted section 122.145(3)(A), which 
provided that ``reports of deviations from any unauthorized emissions, 
upset or maintenance, and start-up and shutdown shall be submitted in 
accordance with sections 101.6, 101.7 and 101.11 of this title 
(relating to Upset Reporting and Recordkeeping Requirements; 
Maintenance, Start-up and Shutdown Reporting, Recordkeeping, and 
Operational Requirements; and Exemptions from Rules and Regulations).'' 
However, as EPA noted in its February 26, 2001, letter to TNRCC 
providing comments in the proposed chapter 122 revisions, sections 
101.6, 101.7, and 101.11 are not consistent with the emergency 
provisions in 40 CFR 70.6(g) for the following reasons: (1) the 
regulations do not define ``emergency'' consistent with 40 CFR 
70.6(g)(1); (2) the regulations improperly provided for exemption from 
permit requirements rather than an affirmative defense; (3) the 
regulations only provided for prompt reporting of certain upsets; and 
(4) an upset provision in a State Implementation Plan (SIP) cannot 
substitute for the emergency reporting and related affirmative defense 
provisions of part 70.
    On May 9, 2001, TNRCC revised Section 122.145. The TNRCC did not 
make any changes in response to EPA's comments. However, TNRCC deleted 
section 122.145(3) because it claimed that it was redundant with the 
upset and maintenance reporting requirements in chapter 101 (26 Texas 
Register at 3751). As adopted May 9, 2001, and submitted June 1, 2001, 
the Texas regulations do not meet the emergency provisions in 40 CFR 
70.6(g) for the reasons set forth above.
    However, as stated in the preamble for our proposed rulemaking on 
August 31, 1995, there is no requirement for a State to adopt the 
emergency provisions in 40 CFR 70.6(g) (60 FR 45530, 45559). Following 
our discussions with TNRCC concerning this statement, TNRCC notified us 
by letter dated August 23, 2001, that it would not use its upset rules 
to satisfy the part 70 emergency provisions, and thus removed these 
provisions from its June 1, 2001, submittal. Based upon TNRCC's 
withdrawal of its upset rule from its title

[[Page 51899]]

v submittal, this deficiency no longer exists. Accordingly, the Texas 
title V program no longer provides an emergency defense; however, the 
Texas SIP provisions in chapter 101 do continue to provide for 
reporting of upsets and malfunctions. These provisions do provide that 
exceedance of emission limits during properly-reported upsets and 
malfunctions may be excused from civil penalties.

C. Operational Flexibility

    In the June 7, 1995, document, EPA stated that the part 70 
regulations require an Operating Permits Program to allow for 
operational flexibility. The EPA noted that section 122.221 was 
inconsistent with 40 CFR 70.4(b)(12) which allows changes within a 
permitted facility without requiring a permit revision, if the changes 
are not modifications under any provision of title I of the Act and the 
changes do not exceed emissions allowed under the permit. The Texas 
permit regulation did not define or include these operational 
flexibility requirements. Therefore, it was not clear what type of 
changes could be processed through the State's operational flexibility 
provision (60 FR at 30044).
    In the 1998 submittal, TNRCC deleted its operational flexibility 
provisions previously contained in the 1993 version of section 122.221. 
However, deletion of the operational flexibility provisions did not 
correct the deficiency because the part 70 regulations require an 
Operating Permit Program to allow for operational flexibility.
    On May 9, 2001, Texas adopted a new section 122.222 to provide 
operational flexibility, consistent with 40 CFR 70.4(b)(12), and to 
specify requirements for off-permit changes, consistent with 40 CFR 
70.4(b)(14). Texas also adopted a definition for ``FCAA section 
502(b)(10) changes'' in section 122.10(11) that is identical to the 
definition of ``section 502(b)(10) changes'' in 40 CFR 70.2. Therefore, 
this deficiency has been corrected.

D. Definition of Major Source

    In the June 7, 1995, and the June 25, 1996, documents, we noted 
that the definition of ``major source'' in section 122.10 was 
inconsistent with the definition of ``major source'' as defined in 40 
CFR 70.2. Both definitions identify 27 stationary source categories 
which are required to include a source's fugitive emissions in 
determining whether a source is major. In Texas' definition, category 
27 was defined as ``any other stationary source category which as of 
August 7, 1980, is being regulated under section 111 or section 112 of 
the Act.'' This definition was inconsistent with 40 CFR 70.2, which 
requires fugitive emissions to be counted for all source categories 
regulated by section 111 or section 112 of the Act, not just those 
which existed as of August 7, 1980 (60 FR at 30041 and 61 FR at 32695).
    In the 1998 submittal, TNRCC revised the definition of major source 
in section 122.10(14) as follows: ``any stationary source category 
regulated under FCAA section 111 (relating to Standards of Performance 
for New Stationary Sources) or section 112 for which EPA has made an 
affirmative determination under FCAA, section 302(j) (relating to 
Definitions).'' Texas did not change the definition in the 2001 
submittal.
    Texas' revised definition still does not match 40 CFR 70.2 for the 
reasons set forth above. However, EPA has subsequently stated that it 
failed to follow the necessary procedures under section 302(j) of the 
Act in adopting the current definition in part 70 (60 FR at 45547-
45548).
    Moreover, the Agency has a final rulemaking under development to 
revise the major source definition to no longer require sources in 
categories subject to section 111 or 112 standards promulgated after 
August 7, 1980, to count fugitive emissions for purposes of part D or 
section 302. The revised definition will match the definition in part 
71, which requires fugitive emissions to be counted for ``any other 
stationary source category which, as of August 7, 1980, is being 
regulated under section 111 or section 112 of the Act.'' 40 CFR 71.2.
    Texas' regulation is consistent with the revised definition and the 
part 71 definition because both cover the same universe of sources. The 
Texas requirement to count fugitive emissions applies to sources ``for 
which EPA has made an affirmative determination under FCAA section 
302(j)'' whereas the part 71 definition applies to sources which were 
``subject to section 111 or 112 standards promulgated as of August 7, 
1980.'' Because August 7, 1980, was the date of EPA's last 
``affirmative determination under section 302(j),'' the Texas 
requirement is consistent with the part 71 requirement. Based on the 
foregoing, we no longer consider this to be a deficiency.

E. Definition of Regulated Pollutant

    In the June 7, 1995, document, EPA pointed out that section 122.10 
did not define ``regulated air pollutant'' as required by part 70, 
instead adopting a definition of ``air pollutant'' that is inconsistent 
with part 70. The definition of ``air pollutant'' included any 
pollutant listed in section 112(b) or section 112(r) of the Act and 
subject to a standard promulgated under section 112 of the Act. The 
term ``air pollutant'' is also used in the Texas definitions for 
``potential to emit'' and ``major source.'' This was inconsistent with 
the part 70 regulation, in which applicability is based on a source's 
potential to emit any air pollutant, including those listed pursuant to 
section 112, rather than on pollutants which are subject to a 
promulgated standard (60 FR at 30040-30041).
    In the 1998 submittal, Texas revised the definition of air 
pollutant in section 122.10 as follows: ``(F) any pollutant subject to 
a standard promulgated under FCAA, section 112 (relating to Hazardous 
Air Pollutants) or other requirements established under section 112, 
including section 112(g) and (j). However a pollutant shall not be 
considered an air pollutant under this chapter solely because it is 
subject to standards or requirements under section 112(r).'' However, 
because Texas' revised definition excluded listing under section 112(r) 
as an indicia of regulated air pollutants, the definition of ``air 
pollutant'' was still inconsistent with the definition of ``regulated 
air pollutant'' in 40 CFR 70.2.
    In the 2001 submittal, Texas revised the definition of ``air 
pollutant'' in section 122.10(1)(F) to include any pollutant subject to 
requirements under the Federal Clean Air Act, section 112(r). The 2001 
changes track the language of ``regulated air pollutant'' in 40 CFR 
70.2 and therefore corrects this deficiency.

F. Treatment of Research and Development (R&D) Facilities

    In the June 7, 1995, document, EPA observed that Texas treated R&D 
facilities through the definition of ``site'' in section 122.10 in a 
manner inconsistent with the definition of ``major source'' in 40 CFR 
70.2, and the applicability provisions of 40 CFR 70.3(b). Texas defined 
``site'' in section 122.10 to allow R&D operations to be treated as a 
separate site from any manufacturing facility with which they are 
collocated (60 FR at 30040).
    In the 1998 submittal, Texas revised the definition of ``site'' to 
provide that R&D facilities will be considered a separate site from any 
collocated manufacturing facility except for those R&D facilities that 
produce products for commercial sale. The definition of ``site'' in the 
1998 submittal continued to inappropriately exempt R&D activities from 
being aggregated with other collocated sources when the R&D activities 
have the same 2-digit SIC code

[[Page 51900]]

as the other collocated sources. In addition, the definition of site 
inappropriately exempted R&D activities from source aggregation when 
the R&D activity has a different 2-digit SIC code from a collocated 
source, and the R&D activity is a support facility for the collocated 
source. Although the Texas rule exempted R&D activities which did not 
produce commercial products, a support relationship may exist under the 
current part 70 rule in circumstances where no commercial product is 
produced. For example, the R&D activity could produce raw materials 
that are used by a collocated manufacturing source to produce final 
products where the raw materials are not sold, but the final products 
are.
    In the 2001 submittal, Texas amended the definition of site in 
section 122.10(30) to clarify that, for purposes of operating permit 
applicability, R&D operations and collocated manufacturing facilities 
would be considered a single site if they have the same two-digit SIC 
code or the R&D operation is a support facility for the manufacturing 
facility. This revision is consistent with the definition of major 
source contained in 40 CFR 70.2 and corrects the deficiency.

G. Fugitive Emissions Not Included in Permit Application

    In the June 7, 1995, document, EPA stated that the permit 
application must include fugitive emissions from units not subject to 
an applicable requirement, as required by 40 CFR 70.3(d). Chapter 122 
did not meet this requirement (60 FR at 30043). In the June 25, 1996, 
document, EPA maintained that TNRCC must require sources to quantify 
fugitive emissions from units covered by an applicable requirement. For 
fugitive emission units that are not covered by an applicable 
requirement, EPA stated that a general description of the emissions 
would suffice (61 FR at 32696).
    In the 2001 submittal, Texas added section 122.132(e)(10), 
specifying that fugitive emissions would be included in permit 
applications and permits in the same manner as stack emissions, 
regardless of whether the source category in question is included in 
the list of sources contained in the definition of major source. 
Section 122.132(e)(10) is consistent with 40 CFR 70.3(d) and meets the 
requirements of part 70. This revision corrects the deficiency.

H. Permit Additions

    In the June 7, 1995, Notice, EPA noted that sections 122.215--
122.217 required that certain permit revisions be processed as ``permit 
additions.'' The criteria for ``permit additions'' appeared to be the 
same as the Federal criteria for some types of changes noted under 
minor permit modification provisions (40 CFR 70.7) and for some changes 
allowed as ``off permit'' changes under 40 CFR 70.4(b)(14). The EPA 
stated that the permit addition procedures set forth in sections 
122.215--122.217 were not equivalent to the minor permit modification 
procedures in part 70 (60 FR at 30042).
    In the 1998 submittal, the State deleted the permit addition 
procedures and replaced them with procedures for minor permit revisions 
(new sections 122.213--122.217). However, the State failed to correct 
the underlying deficiencies in the permit addition procedures when it 
promulgated its minor permit revision procedures in 1997.
    In 2001, Texas revised its minor permit revision regulations to be 
consistent with 40 CFR 70.7(e)(2). These changes included:
     Repeal of existing sections 122.215 and adoption of a new 
section 122.215;
     Amendments to section 122.216 and 122.217;
     Adoption of a section 122.218; and
     Repeal of existing section 122.219 and adoption of a new 
section 122.219.
    Texas will submit sections 122.215--122.218 as revisions to its 
SIP. These sections will complement the provisions of chapter 101, 
subchapter H, Emissions Banking and Trading, which has been submitted 
as a SIP revision. Additional details of these changes are discussed in 
the TSD.
    As discussed above, sections 122.215--122.219 as adopted by TNRCC 
meet the requirements of part 70.

I. Prohibition of Case-By-Case Determinations as Minor Permit Revisions

    In the June 7, 1995, document, EPA pointed out that section 122.215 
(Permit Additions) did not require case-by-case reasonably available 
control technology (RACT) changes to be processed as significant permit 
modifications. This regulation allowed TNRCC to process case-by-case 
RACT determinations as minor permit revisions. 40 CFR 
70.7(e)(2)(i)(A)(3) prohibits the use of minor permit modification 
provisions to make ``case-by-case'' RACT equivalency determinations. 
Therefore, the Texas provision is not equivalent to the part 70 
regulations (60 FR at 30042).
    In the 1998 submittal, the State deleted the permit addition 
procedures and replaced it with procedures for minor permit revisions. 
However, the State failed to correct this deficiency in the permit 
addition procedures when it promulgated its minor permit revision 
procedures.
    In 2001, Texas repealed section 122.215 and added a new Section 
122.215 incorporating all criteria in 40 CFR 70.7(e)(2)(i)(A)(1)-(5) 
for minor permit revisions. This includes 40 CFR 70.7(e)(2)(i)(A)(3), 
which specifies that minor revisions may only be used for changes that 
do not require or change a case-by-case determination of an emission 
limitation or standard. This would include a case-by-case RACT 
determination. Therefore, case-by-case RACT determinations would be 
incorporated into a permit with a significant permit revision and must 
satisfy all procedural requirements for significant permit revisions, 
such as public notice, EPA review, public petition, and affected State 
review. Therefore, Texas has corrected this deficiency.

J. Prohibition on Operating Changes Until Source Has Submitted Minor 
Permit Application

    In the June 7, 1995, document, EPA noted that Section 122.216 
allowed applications for permit additions to be submitted to TNRCC no 
later than 90 days after the owner or operator has obtained or 
qualified for a preconstruction authorization. This regulation also 
provided that after the source received its preconstruction permit, it 
could make the requested operating change before submitting the 
operating permit application within the 90-day time frame (60 FR at 
30042). However, 40 CFR 70.7(e)(2)(v) provides that no owner or 
operator may make an operating change if such operating change would 
require a modification of a term or condition of the original part 70 
permit until the source has submitted an application for the minor 
permit modification. Accordingly, a State may allow the source to make 
the change proposed in its minor permit modification application only 
after the source files that application.
    In the 1998 submittal, the State deleted the permit addition 
procedures and replaced them with procedures for minor permit 
revisions. However, the State failed to correct this deficiency in the 
permit addition procedures when it promulgated its minor permit 
revision procedures.
    In 2001, Texas amended section 122.217(a)(2) to require a permit 
holder to submit an application for a minor permit revision to the 
Executive Director, as opposed to a notice. Under the amendment, a 
permit holder will be required to submit the application prior to 
making the operational changes

[[Page 51901]]

described in such application. The submitted revisions now require such 
changes to meet the requirements in sections 122.215--122.218 which 
contain TNRCC's requirements for minor permit revisions. The revisions 
to section 122.217(a)(2) meet the requirements of 40 CFR 70.7(e)(2)(v) 
and correct the deficiency.

K. EPA and Affected State Notification and Review, EPA Objection, and 
Permitting Authority Deadline To Issue or Deny Permit Additions

    In the June 7, 1995, document, EPA stated that the permit addition 
procedures outlined in Section 122.217 were not equivalent to the 
procedures specified in 40 CFR 70.7(e)(2) because of the lack of EPA's 
ability to review and comment on permit additions, and the lack of a 
permitting authority deadline to issue or deny a permit addition. The 
EPA stated that this regulation must be amended to allow timely EPA 
review, and require that TNRCC issue or deny the permit modification 
within 90 days of receipt of an application or 15 days after the end of 
the Administrator's 45-day review period, whichever is later (60 FR at 
30042).
    In the 1998 submittal, the State deleted the permit addition 
procedures and replaced them with procedures for minor permit 
revisions. However, the State failed to correct this deficiency in the 
permit addition procedures when it promulgated its minor permit 
revision procedures.
    In 2001, Texas adopted section 122.217(e), which requires TNRCC to 
notify EPA and affected States of a requested minor permit revision 
within five working days of receipt of a complete application. Also, 
Texas amended Section 122.217(g) to require the Executive Director to 
take final action on a permit revision application no later than 90 
days after receipt of a complete application, or 15 days after the end 
of the EPA review period. Furthermore, section 122.217(g) would no 
longer allow the Executive Director to take final action on a permit 
revision application before the resolution of any EPA objection. This 
amendment would require the Executive Director to resolve any issues 
resulting from an EPA objection and issue or deny the application for 
permit revision within 15 days. The revisions to section 122.217 meet 
the requirements of 40 CFR 70.7(e)(2)(iii) and (iv), and are 
approvable.

L. Source Applicability of Part 70

    In the June 7, 1995, document, EPA stated that section 
122.120(4)(A)-(C), which addressed the applicability of part 70 and the 
Texas federal operating permit program, was inconsistent with 40 CFR 
70.3(a). We noted that section 122.120(4) could potentially exempt any 
source, even a major source, from the requirement to obtain a part 70 
permit. 60 FR at 30039-30040. In the 1998 submittal, Texas revised 
section 122.120(4) to clarify that the rule is not exempting major 
sources from applicability to chapter 122. In addition, Texas revised 
section 122.120(4)(C) to clarify that any non-major source in a source 
category designated by EPA, not just a section 111 and section 112 
source, is subject to the operating permits program. Texas has 
corrected this deficiency.

M. Definition of Title I Modification

    In the June 7, 1995, document, EPA noted that Texas' definition of 
``title I modification'' in section 122.10 did not include changes 
reviewed under a minor source preconstruction review plan (MNSR), nor 
did it include changes that trigger the application of National 
Emission Standards for Hazardous Air Pollutants (NESHAP) established 
pursuant to section 112 of the Act prior to the 1990 Amendments. 60 FR 
at 30041. In the 1998 submittal, Texas deleted the definition of title 
I modification from section 122.10. The elimination of the definition 
is consistent with part 70, which does not contain a definition of 
title I modification. This deficiency has been corrected.

N. Compliance Schedule Requirements

    In the June 7, 1995, document, EPA stated that section 
122.132(b)(3)(B) was not as stringent as 40 CFR 70.5(c)(8)(iii) (C) 
because it did not require the compliance schedules to be at least as 
stringent as ``any judicial consent decree or administrative order to 
which the source is subject.'' 60 FR at 30041. Section 122.132(b)(3) 
sets forth the requirements for compliance plans for those units out of 
compliance. In the 1998 submittal, Texas revised section 
122.132(b)(3)(B) (now section 122.132(e)(4)(C)(iii)) to read as 
follows: ``a compliance schedule (resembling and at least as stringent 
as any compliance schedule contained in any judicial consent decree or 
administrative order to which the source is subject), including 
remedial measures to bring the emission unit into compliance with the 
applicable requirements.'' This deficiency has been corrected.

O. Application Shield for Significant Modifications

    In the June 7, 1995, document, EPA stated that section 122.138 
incorrectly allowed an application shield for significant permit 
modifications. We pointed out that the application shield provision in 
40 CFR 70.7(b) only applies to ``a timely and complete application for 
permit issuance (including for renewal),'' not to applications for 
significant permit modifications. 60 FR at 30041. In the 1998 
submittal, Texas deleted the reference to ``significant permit 
modification'' from the application shield provisions of section 
122.138. This deficiency has been corrected.

P. Changes Allowed Under Administrative Permit Amendments

    In the June 7, 1995, document, EPA objected to section 122.211(5), 
which provided that a change at a site may qualify as an administrative 
permit amendment if the change is similar to those in section 
122.211(1)-(4). 60 FR 30041. This is contrary to 40 CFR 70.7(d)(1)(vi), 
which allows the incorporation of changes similar to the listed 
provisions to be administrative amendments only if ``the Administrator 
has determined as part of the approved part 70 program'' that the 
changes are similar.'' In the 1998 submittal, Texas revised its former 
section 122.211(5), now redesignated as section 122.211(6), to read as 
follows: ``to allow for the incorporation of changes similar to those 
in paragraphs (1)-(5) of this section and approved by EPA.'' We believe 
that this corrects this deficiency and is consistent with part 70, so 
long as the State secures EPA approval pursuant to rulemaking and a 
similar change qualifying for an administrative amendment becomes a 
part of the state's approved part 70 program regulations. The TNRCC 
understands and acknowledges that it must obtain EPA approval. With 
this understanding, this deficiency has been corrected.

Q. Renewal of General Permits

    In the June 7, 1995, document, EPA stated that 40 CFR 70.4 requires 
the State to issue acid rain permits for a fixed term of five years, 
and all other permits for a period not to exceed five years, except for 
permits issued for solid waste incineration units combusting municipal 
waste subject to provisions under section 129(e) of the Act. These 
permits can have a fixed permit term of twelve years. However, section 
382.0543(a) of the Texas Health and Safety Code provides that an 
operating permit is subject to renewal at least

[[Page 51902]]

every five years. This is acceptable for solid waste incineration units 
combusting municipal waste. The statute does not, however, limit the 
general permit term to a maximum of five years. 60 FR at 30043. In the 
1998 submittal, Texas adopted section 122.501(f) which provides that 
``general operating permits must be renewed, consistent with the 
procedural requirements in subsection (a) of this section, at least 
every five years after the effective date.'' Subsection (a) repeats the 
procedure for issuance of the general permit. Therefore, Texas has 
corrected this deficiency.

R. Public Notice To Include Emissions Change

    In the June 7, 1995, document, EPA stated that 40 CFR 70.7(h) 
requires, except for modifications qualifying for minor permit 
modification procedures, that the public notice requirements for all 
permit proceedings must include the ``emissions change involved in any 
permit modification.'' Section 122.153 did not specify this 
requirement. 60 FR at 30042. The EPA reiterated this comment in the 
June 25, 1996, document. 61 FR at 32696. In the 1998 submittal, Texas 
repealed section 122.153 and adopted section 122.320. Section 
122.320(b)(5) requires public notice for all significant permit 
revisions to include ``the air pollutants with emission changes.'' This 
change is consistent with Sec. 70.7(h)(2), and corrects this 
deficiency.

S. Interpretation Shield

    In the June 7, 1995, document, EPA expressed concerns that section 
122.145(e) contained ambiguities surrounding the ``interpretation 
shield.'' We identified three specific items that the State must 
address through a written commitment prior to obtaining final approval. 
These items included: interpretations made under section 122.145(e) 
must be limited to applicability issues only; EPA must have the 
opportunity to review and veto every section 122.145(e) action; and 
interpretations must be based on the most recent EPA guidance and any 
TNRCC written guidance pre-approved by EPA. 60 FR at 30043. In the 1998 
submittal, Texas deleted the ``interpretation shield'' concept outlined 
in section 122.145(e), and replaced it with section 122.148, which is 
consistent with the permit shield described in 40 CFR 70.6(f). Texas' 
response addresses this deficiency.

T. Off-Permit Changes

    In the June 7, 1995, document, EPA stated that the permit addition 
procedures specified in Section 122.215 would allow companies to make 
changes that EPA does not consider ``off-permit,'' as provided by 40 
CFR 70.4(b)(14). We cited Texas'' narrow definition of ``applicable 
requirement'' excluding minor new source review as the problem. 60 FR 
at 30039 and 30044. In the 1998 submittal, Texas eliminated the permit 
addition revision process outlined in section 122.215 and replaced it 
with a minor permit revision process. The elimination of the permit 
addition revision process is consistent with part 70 and corrects the 
deficiency.

IV. Permit Fee Demonstration and Adequate Personnel Funding

    The Permit Fee Demonstration was not changed as a result of the 
revisions to chapter 122. In regard to Adequate Personnel and Funding, 
EPA pointed out in the June 7, 1995, document that since EPA had not 
received a complete projection of program costs for four years after 
approval (40 CFR 70.4(b)(8)), this would be required for full approval. 
60 FR at 30044. 40 CFR 70.4(b)(8) requires states to provide a 
statement that adequate personnel and funding have been made available 
to develop, administer, and enforce the program. Furthermore, 40 CFR 
70.4(b)(8)(v) specifies that the statement must include an estimate of 
the permit program costs for the first four years after approval, and a 
description of how the state plans to cover those costs.
    On August 22, 2001, Texas submitted a complete four-year 
projection. In its fee demonstration, Texas documented that it requires 
an average of $34,274,000 per year to cover the cost of the title V 
program. Texas projects that it will collect an average of 
approximately $36,840,000 per year in fees from title V sources. This 
demonstration indicates that the title V fees that Texas anticipates 
will be collected are sufficient to cover the program costs with an 
adequate margin of safety. The TNRCC has the authority to adjust the 
emissions fee as necessary using its rulemaking authority (Texas Health 
& Safety Code Section 382.0621). The demonstration submitted by Texas 
meets the requirements of 40 CFR 70.4(b)(7) and (8).

V. Did Texas Submit Other Title V Program Revisions?

    The June 1, 2001, submittal included other changes that Texas made 
to chapter 122. These changes were made after we granted IA of Texas' 
operating permits program and do not address the IA deficiencies. 
Because the following changes do not address the IA issues, they do not 
affect our decision to grant full approval of Texas operating permits 
program.
    The additional revisions to chapter 122 relate to General Operating 
Permits (promulgated February 26, 1999), Public Participation 
(promulgated September 24, 1999) and Compliance Assurance Monitoring 
and Periodic Monitoring (promulgated September 1, 2000).
    We have received comments from citizens concerning these additional 
provisions in response to our Federal Register document published 
December 11, 2000. The citizens identified areas where they believe 
these provisions are deficient. We will respond to the citizen comments 
as described in section VIII.C of this preamble which provides 
additional information on the citizen comment letters. As discussed 
therein, we will respond by December 1, 2001, either by publishing a 
notice of deficiency if we determine that a deficiency exists, or we 
will notify the commenter in writing to explain our reasons for not 
making a finding of deficiency.
    We are taking no action on the above described provisions until we 
have completed our review of the citizen comments. We will take 
appropriate action on the additional provisions following our review of 
the citizen comments and the resolution of any deficiencies that we may 
identify.

VI. Audit Privilege Law

    Section 502(d) of the Act authorizes States to implement a title V 
operating permit program. The statute also sets forth the minimum 
elements of a State permit program, including the requirement that the 
permitting authority have adequate authority to assure that sources 
comply with all applicable requirements, as well as authority to 
enforce permits, including recovering minimum civil penalties and 
appropriate criminal penalties. 42 U.S.C. 7661a(b)(5)(A) and (E). 
Pursuant to title V, EPA promulgated regulations specifying the minimum 
required elements of State Operating Permit programs, found at 40 CFR 
part 70. These regulations explicitly require States to have certain 
enforcement authorities, including authority to seek injunctive relief 
to enjoin a violation, to bring suit to restrain persons where a 
facility is posing an imminent and substantial endangerment to public 
health or welfare, and suit to recover appropriate criminal and civil 
penalties. See 40 CFR 70.11. Section 113(e) of the Act sets forth 
penalty factors for EPA or a court to consider in assessing penalties 
for civil or criminal violations of the Act, factors which necessarily

[[Page 51903]]

apply to penalties for violations of title V permits.
    In the June 25, 1996 Notice, EPA stated that Texas would have to 
demonstrate that the passage of Texas House Bill 2473 (1995), the Texas 
Environmental, Health and Safety Audit Privilege Act (Audit Privilege 
Act) did not limit TNRCC's ability to adequately administer and enforce 
the federal operating permit program. 61 FR at 32697. The Audit 
Privilege Act created an immunity from civil, administrative, and 
criminal penalties for environmental violations discovered through an 
audit as defined by the Act. The Audit Privilege Act also created a 
privilege for information associated with audits which prohibits their 
disclosure in administrative, civil, or criminal actions for violations 
of environmental law. The EPA was concerned that the Audit Privilege 
Act may extend penalty immunity to facilities which commit repeat 
violations and violations which may cause harm to human health and the 
environment, and make no provision for recoupment of penalties for 
economic benefit, as required by section 113(e) of the Act. To the 
extent that the Audit Privilege Act provides immunity from civil 
penalties that does not permit consideration of these factors, 
appropriate civil penalties cannot be assessed by a state.
    The EPA was also concerned that the Audit Privilege Act may prevent 
the State from obtaining appropriate criminal penalties. Evidence 
necessary to prove that a crime has been committed may be protected by 
privilege which may inhibit or prevent the State from assessing 
appropriate criminal penalties. The State must have the ability to 
obtain appropriate criminal penalties where an audit report reveals 
evidence of prior criminal conduct on the part of managers or 
employees. Another problematic aspect of the Audit Privilege Act was 
the disparity between its provisions limiting disclosure of audit 
report information by employees and others, and sections 113 and 322 of 
the Clean Air Act, which specifically protects whistle-blowers from 
retaliation and provide awards for persons who furnish information that 
leads to a criminal conviction or civil penalty. The Texas Audit 
Privilege Act did not, by its terms, create or impose special sanctions 
on informants, but it asserted that a ``Party to a confidentiality 
agreement * * * who violates that agreement is liable for damages 
caused by the disclosure * * * '' In addition, sanctions were created 
with regard to government officials who disclose privileged 
information. The EPA was concerned that both of these provisions may 
have a negative impact on disclosures well beyond the intended reach of 
the privilege. Confidential informants are an important source of leads 
for State and Federal enforcement programs.
    The EPA and TNRCC negotiated a set of technical amendments to the 
Audit Privilege Act, Texas Rev. Civ. Stat. Ann. Art. 4447cc (Vernon 
Supp. 1998), with the purpose of removing any barriers to state 
assumption of federal programs. These amendments did the following: (1) 
Eliminated the application of immunity and privilege provisions to 
criminal actions; (2) eliminated the application of immunity where a 
violation results in a serious threat to health or the environment, or 
where the violator has obtained a substantial economic benefit that 
gives it a competitive advantage; (3) made it clear that Texas laws 
will not subject individuals to sanctions for reporting any violations 
of environmental law to a law enforcement agency; and (4) clarified 
that the privilege does not impair access to information required to be 
made available under federal or state law. The TNRCC also assured EPA 
that the Audit Privilege Act does not impair the State's authority or 
ability to obtain injunctive relief, issue emergency orders, or taint 
its ability to independently obtain or use evidence of a violation. The 
75th Texas Legislature enacted Texas House Bill 3459 (1997) to adopt 
the amendments agreed upon without any other significant changes in the 
law. The amendments to the Audit Act have been in effect since 
September 1, 1997.
    Based on the amendments to the Audit Privilege Act and TNRCC's 
assurances, EPA has concluded that the TNRCC retains adequate authority 
to enforce the requirements of any authorized or delegated program 
(which would include title V), and thus the Audit Privilege Act would 
not be a barrier to approval of Federal programs. Letter to Mr. Barry 
R. McBee, TNRCC from Mr. Steven A. Herman, Assistant Administrator 
dated March 19, 1997. However, in the June 25, 1996, document, EPA 
stated that all interested parties will have opportunity to comment on 
the acceptability of this law for full title V approval. 61 FR at 
32696. Therefore, EPA is providing the public the opportunity to 
comment on the acceptability of the Audit Privilege Act.

VII. Miscellaneous Full Approval Issues

    In the June 25, 1996 Notice, EPA stated the following:

    Significant changes to Texas laws were made by the Texas 
legislature in 1995. These statutory changes raise issues of concern 
which the State must address before full approval can be granted. 
The State has an obligation to address all the relevant, recently 
enacted laws and demonstrate how they meet title V and part 70.
    This final agency action today does not waive the EPA's right to 
raise statutory concerns and any attendant regulatory revisions the 
EPA deems necessary to the State and identify inconsistencies with 
those legislative changes which must be corrected for full approval. 
The EPA will present its position on the laws to TNRCC prior to the 
1997 legislative session, during TNRCC's corrective rulemaking, and 
its FRN proposing action on the State's submittal for full approval. 
Therefore, interested parties will have full opportunity to comment 
on the merits of the EPA's position on the acceptability of the 
Texas 1995 laws (such as the Texas Senate Bill 14, ``Takings Impact 
Assessment,'', among others) for full title V program approval.

61 FR at 32697.
    In addition, concerns were raised about TNRCC's laws and procedures 
governing the public availability of emissions data. Id. at 32698. This 
concern was raised after the public comment period ended for the 
proposed interim approval.
    When EPA made these statements, it did not anticipate that over 
five years would pass between interim approval and full approval. The 
Texas Legislature has meet three times since this statement was made. 
On June 25, 1998, Texas requested revised interim approval for its 
operating permits program. Shortly thereafter, on August 10, 1998, 
Texas supplemented its submittal with a supplemental Attorney General's 
(AG) statement. This supplemental AG statement addressed, among other 
things, Texas Senate Bill 14 referenced above. The EPA never acted on 
Texas' request for revised interim approval because it was challenged 
on the May 22, 2000 rulemaking that extended the IA period of 86 
operating permits programs until December 1, 2001. The EPA settled the 
lawsuit and the settlement prohibits further extensions of the interim 
approval deadline. Thus, if EPA does not grant full approval of Texas' 
operating permits program by December 1, 2001, a Federal operating 
permit program will be automatically implemented in Texas. See 65 FR 
77024, 77025 (December 8, 2000).
    In addition, EPA also gave citizens the opportunity to identify 
deficiencies they perceive to exist in Texas' operating permits 
program, including alleged substantive deficiencies and implementation 
deficiencies. 65 FR 77376 (December 11, 2001). EPA

[[Page 51904]]

received comments outlining numerous alleged deficiencies with the 
Texas program.

VIII. What Is Involved in This Proposed Action?

A. Proposed Action

    In this action, we are proposing full approval of the operating 
permits program submitted by the State of Texas. The program was 
submitted by Texas to us for the purpose of complying with federal 
requirements found in title V of the Act and in part 70, which mandate 
that States develop, and submit to us, programs for issuing operating 
permits to all major stationary sources, and to certain other sources 
with the exception of Indian Lands. We have reviewed this submittal of 
the Texas operating permits program and are proposing full approval.

B. Indian Lands and Reservations

    In its operating permits program submittal, Texas does not assert 
jurisdiction over Indian lands or reservations. To date, no tribal 
government in Texas has authority to administer an independent title V 
program in the State. On February 12, 1998, EPA promulgated regulations 
under which Indian tribes could apply and be approved by EPA to 
implement a title V operating permits program (40 CFR part 49). For 
those Indian tribes that do not seek to conduct a title V operating 
permits program, EPA has promulgated regulations (40 CFR part 71) 
governing the issuance of Federal operating permits in Indian country. 
64 FR 8247, February 19, 1999.

C. Citizen Comment Letters

    On May 22, 2000, EPA promulgated a rulemaking that extended the IA 
period of 86 operating permits programs untilDecember 1, 2001. (65 FR 
32035). The action was subsequently challenged by the Sierra Club and 
the New York Public Interest Research Group (NYPIRG). In settling the 
litigation, EPA agreed to publish a document in the Federal Register 
that would alert the public that they may identify and bring to EPA's 
attention alleged programmatic and/or implementation deficiencies in 
title V programs and that EPA would respond to their allegations within 
specified time periods if the comments were made within 90 days of 
publication of the Federal Register document.
    Several citizens commented on what they believe to be deficiencies 
with respect to the Texas title V program. The EPA takes no action on 
those comments in today's action and will respond to them by December 
1, 2001. As stated in the Federal Register document published on 
December 11, 2000 (65 FR 77376), EPA will respond by December 1, 2001 
to timely public comments on programs that have obtained IA; and EPA 
will respond by April 1, 2002 to timely comments on fully approved 
programs. We will publish a notice of deficiency (NOD) when we 
determine that a deficiency exists, or we will notify the commenter in 
writing to explain our reasons for not making a finding of deficiency. 
An NOD will not necessarily be limited to deficiencies identified by 
citizens and may include any deficiencies that we have identified 
through our program oversight.

IX. Administrative Requirements

    Under Executive Order 12866, ``Regulatory Planning and Review'' (58 
FR 51735, October 4, 1993), this proposed action is not a ``significant 
regulatory action'' and therefore is not subject to review by the 
Office of Management and Budget. Under the Regulatory Flexibility Act 
(5 U.S.C. 601 et seq.) the Administrator certifies that this proposed 
rule will not have a significant economic impact on a substantial 
number of small entities because it merely approves state law as 
meeting Federal requirements and imposes no additional requirements 
beyond those imposed by state law. This rule does not contain any 
unfunded mandates and does not significantly or uniquely affect small 
governments, as described in the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4) because it proposes to approve pre-existing 
requirements under state law and does not impose any additional 
enforceable duties beyond that required by State law. This rule also 
does not have tribal implications because it will not have a 
substantial direct effect on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes, as specified by Executive Order 13175, 
``Consultation and Coordination with Indian Tribal Governments'' (65 FR 
67249, November 9, 2000). This rule also does not have Federalism 
implications because it will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, as specified in Executive Order 13132, 
``Federalism'' (64 FR 43255, August 10, 1999). The rule merely proposes 
to approve existing requirements under state law, and does not alter 
the relationship or the distribution of power and responsibilities 
between the State and the Federal government established in the Clean 
Air Act. This proposed rule also is not subject to Executive Order 
13045, ``Protection of Children from Environmental Health Risks and 
Safety Risks'' (62 FR 19885, April 23, 1997) or Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use'' (66 FR 28355(May 22, 2001), because it 
is not a significantly regulatory action under Executive Order 12866. 
This action will not impose any collection of information subject to 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., 
other than those previously approved and assigned OMB control number 
2060-0243. For additional information concerning these requirements, 
see 40 CFR part 70. An agency may not conduct or sponsor, and a person 
is not required to respond to, a collection of information unless it 
displays a currently valid OMB control number.
    In reviewing State operating permit programs submitted pursuant to 
title V of the Clean Air Act, EPA will approve State programs provided 
that they meet the requirements of the Clean Air Act and EPA's 
regulations codified at 40 CFR part 70. In this context, in the absence 
of a prior existing requirement for the State to use voluntary 
consensus standards (VCS), EPA has no authority to disapprove a State 
operating permit program for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews an operating 
permit program, to use VCS in place of a State program that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply.

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: October 2, 2001.
Gregg A. Cooke,
Regional Administrator, Region 6.
[FR Doc. 01-25592 Filed 10-10-01; 8:45 am]
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