Clean Air Act Interim Approval Operating Permits Program; New Mexico Environment Department

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[NM001; FRL-4886-4]

Clean Air Act Interim Approval Operating Permits Program; New

Mexico Environment Department

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes interim approval of the operating permits

program submitted by the Governor for the New Mexico Environment

Department (NMED) for the purpose of complying with Federal

requirements which mandate that States develop and submit to EPA

programs for issuing operating permits to all major stationary sources,

and to certain other sources with the exceptions of Bernalillo County

and Indian Lands.

DATES: Comments on this proposed action must be received in writing by

June 20, 1994.

ADDRESSES: Written comments on this action should be addressed to Ms.

Jole C. Luehrs, Chief, New Source Review Section, at the EPA Region 6

Office indicated. Copies of the State's submittal and other supporting

information used in developing the proposed rule are available for

inspection during normal business hours at the following locations.

Interested persons wanting to examine these documents should make an

appointment with the appropriate office at least 24 hours before

visiting day.

Environmental Protection Agency, Region 6, Air Programs Branch (6T-

AN), 1445 Ross Avenue, suite 700, Dallas, Texas 75202-2733.

New Mexico Environment Department, Harold Runnels Bldg., room So.

2100, 1190 St. Francis Drive, Santa Fe, New Mexico 87503.

FOR FURTHER INFORMATION CONTACT: Adele D. Cardenas, New Source Review

Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue,

suite 700, Dallas, Texas 75202-2733, telephone 214-655-7210.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the Clean Air Act as amended in 1990

(``the Act''), EPA has promulgated rules which define the minimum

elements of an approvable State operating permits program and the

corresponding standards and procedures by which the EPA will approve,

oversee, and withdraw approval of a State operating permits program

(see 57 FR 32250 (July 21, 1992)). These rules are codified at title 40

of the Code of Federal Regulations (CFR) part 70. Title V requires

States to develop, and submit to EPA, programs for issuing these

operating permits to all major stationary sources and to certain other

sources.

The Act requires that States develop and submit these programs to

EPA by November 15, 1993, and that EPA act to approve or disapprove

each program within one year after receiving the submittal. The EPA's

program review occurs pursuant to section 502 of the Act and the part

70 regulations which together outline criteria for approval or

disapproval. Where a program substantially, but not fully, meets the

requirements of part 70, EPA may grant the program interim approval for

a period of up to two years. If EPA has not fully approved a program by

two years after the November 15, 1993, date, or by the end of an

interim program, it must establish and implement a Federal program.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials

Pursuant to section 502(d) of the Clean Air Act as amended (1990

Amendments), the Governor of each State must develop and submit to the

Administrator an operating permits program under State or local law or

under an interstate compact meeting the requirements of title V of the

Act. NMED requested, under the signature of Governor Bruce King,

approval with full authority to administer the State operating permits

program submittal, prepared by NMED, in all areas of the State of New

Mexico with the exceptions of Bernalillo County and Indian Lands. The

title V operating permits program package for Bernalillo County will be

submitted separately by the City of Albuquerque Environmental Health

Department, and it will be addressed in a separate Federal Register

action. Bernalillo County is granted the authority to administer a

local air pollution control program by the New Mexico Air Quality

Control Act.

In the NMED operating permits program submittal, New Mexico does

not assert jurisdiction over Indian lands or reservations for purposes

of 40 CFR part 70 and title V. EPA will, at a future date, conduct a

Federal title V operating permits program governing title V sources of

air emissions on Indian lands and reservations in New Mexico.

To date, no tribal or Pueblo government in New Mexico has authority

to administer an independent air program in the State. Upon

promulgation of the Indian air regulations, the Indians will then be

able to apply as a State, and receive the authority from EPA, to

implement an operating permits program under title V of the 1990

Amendments. The Navajo Nation lands, including those in New Mexico, are

administered under the jurisdiction of EPA Region 9. The State of New

Mexico recognizes the five (5) reservations and nineteen (19) Pueblos

throughout the lands of the State. A map outlining and listing each

tribe by name is attached to the Governor's letter.

The New Mexico submittal, provided as Item II-''Operating Permits

Program Description,'' addresses 40 CFR 70.4(b)(1) by describing how

NMED intends to carry out its responsibilities under the part 70

regulations. The program description addresses the following areas: (A)

Organizational structure; (B) Regulations, guidelines, policies, and

procedures; and (C) Future regulatory actions (40 CFR 70.4(b)(3)(i) and

(v)). The program description has been deemed to be appropriate for

meeting the requirement of 40 CFR 70.4(b)(1).

Pursuant to 40 CFR 70.4(b)(3), the Governor is required to submit a

legal opinion from the attorney general (or the attorney for the State

air pollution control agency that has independent legal counsel)

demonstrating adequate authority to carry out all aspects of a title V

operating permits program. The State of New Mexico submitted an

Attorney General's Opinion and a Supplemental Attorney General's

Opinion demonstrating adequate legal authority as required by Federal

law and regulation except with regard to criminal fine authority. The

Attorney General's Opinion acknowledged that a statutory revision would

be required to bring its criminal fine authority into precise

conformance with the requirements of 40 CFR 70.11(a)(3)(ii).

The State statutes cited in the Attorney General's Opinion

authorize the imposition of criminal fines in the amounts of only

$1,000 and $5,000 for misdemeanor and felony violations, respectively,

rather than the $10,000 per violation amounts required by 40 CFR

70.11(a)(3)(ii) for knowing violations of applicable requirements,

permit conditions and fee and filing requirements. Further, those

statutes do not appear to authorize the fine amounts to be imposed per

day per violation as required by 40 CFR 70.11(a)(3)(ii). Although these

defects in criminal fine authority preclude EPA from granting full

approval of the State's operating permits program at this time, EPA may

grant interim approval, subject to the State obtaining the needed

criminal fine authority within 18 months after the Administrator's

approval of the New Mexico title V program pursuant to 40 CFR

70.4(f)(2).

The State's Supplemental Attorney General's Opinion addresses the

criminal fine authority required by 40 CFR 70.11(a)(3)(iii) for

tampering and false statement. EPA is relying on the State's

interpretation of its statute, NMSA 1978 section 74-2-14.E., as

demonstrating that New Mexico law allows criminal fines of at least

$10,000 per day for each act of tampering and for each false statement

as required by 40 CFR 70.11(a)(3)(iii).

40 CFR 70.4(b)(3)(i) requires that the State demonstrate adequate

legal authority to issue permits and assure compliance with each

applicable requirement of 40 CFR part 70. New Mexico regulation, AQCR

770.III.C.1.d., states that ``The department may impose conditions

regulating emissions during start-up and shutdown.'' EPA is relying on

the State's interpretation of this language, discussed in the State's

Supplemental Attorney General's Opinion, as allowing the department to

impose requirements which exceed title V applicable requirements, but

not to waive any title V requirements for title V sources.

40 CFR 70.4(b)(4) requires the submission of relevant permitting

program documentation not contained in the regulations, such as permit

forms and relevant guidance to assist in the State's implementation of

its permit program. The State addresses this requirement in its program

submittal under Item II-''Program Description'' and Item V-''Program

Documentation.''

2. Regulations and Program Implementation

The State of New Mexico has submitted Air Quality Control

Regulations (AQCR) 770-''Operating Permit Regulations'' and AQCR 771-

''Fee Regulations,'' for implementing the State part 70 program as

required by 40 CFR 70.4(b)(2). Sufficient evidence of their

procedurally correct adoption was submitted in a supplemental submittal

on January 11, 1994, supplementing the evidence of adoption which was

sent to EPA in the State's original submittal. Copies of all applicable

State and local statutes and regulations which authorize the part 70

program, including those governing State administrative procedures,

were submitted with the State's program. The State also submitted a

list of insignificant activities with the submittal for EPA to propose

approving with the approval of the State operating permits program.

This list which has been through the public participation process

during the operating permits regulation hearing was addressed by the

Regional office with no comment. The list can be found in the submittal

under Item II-''Operating Permits Program Description,'' Attachment II-

3-''List of Insignificant Activities.''

The New Mexico operating permits regulations followed part 70 very

closely with a few exceptions. The cross-reference chart can be found

in the New Mexico submittal under Item VI-''Various Provisions,''

Attachment VI-1, indicating where each paragraph of the part 70

regulation is addressed in AQCR 770. AQCR 770 is submitted as

Attachment III-1. The following requirements, set out in EPA's part 70

operating permits program review, are addressed in Item VI of the

State's submittal: (A) Applicability criteria, including any criteria

used to determine insignificant activities or emissions levels (40 CFR

70.4(b)(2)): AQCR 770.II., ``List of Insignificant Activities''; (B)

Provisions for continuing permits or permit terms if a timely and

complete application is submitted, but action is not taken on a request

prior to permit expiration (40 CFR 70.4(b)(10)): AQCR 770.IV A.4.; (C)

Provisions for action on permit applications (40 CFR 70.4(b)(6)): AQCR

770.IV.A.3.; (D) Provisions for permit content, (including 40 CFR

70.4(b)(16)): all applicable requirements: AQCR 770.III.C.1.; a fixed

term: AQCR 770.III.C.2.; monitoring and related record keeping and

reporting requirements: AQCR 770.III.C.3. through 5.; source compliance

requirements: AQCR 770.III.C.7.; (E) Operational flexibility provisions

(40 CFR 70.4(b)(12)): AQCR 770.III.C.8.; (F) Provisions for permit

issuance, renewals, reopenings and revisions, including public, EPA and

affected State review to be accomplished in an expeditious manner (40

CFR 70.4(b)(13) and (16)): AQCR 770.VI.; and (G) If the permitting

authority allows off-permit changes, provisions assuring compliance

with Sec. Sec. 70.4(b)(14) and (15): AQCR 770.C.9. The AQCR

regulations, in section 770.IV.(H), provide that applicants can receive

variances from non-Federal conditions only. The State prevents any

source from receiving a variance from any AQCR 770 or part 70

requirements.

3. Permit Fee Demonstration

In AQCR 771, the State's fee regulation, New Mexico established

fees for criteria air pollutants which are below the presumptive

minimum. The New Mexico regulation allows for a fee of $10.25 per ton

for criteria pollutants based on allowable emissions at major sources

as defined in AQCR 770-''Operating Permits'' regulations. For

facilities which are only major for hazardous air pollutants (HAP) and

not for other pollutants, the fees are $150 per ton for the 189 HAPs

listed in title III of the 1990 Amendments. These fees, when converted

using EPA criteria, result in the collection of an average of $19.30

per ton for title V sources. The State of New Mexico, after careful

review, determined that these fees would support the title V permit

program costs as required by 40 CFR 70.9(a). New Mexico explains in its

fee demonstration that it chose this fee structure because it allowed

for program costs to be covered without unduly penalizing any industry

in the State, and the fees generated would meet, but not likely exceed,

program costs. The NMED will have a periodic review of the program fee

schedule. The New Mexico fee demonstration shows that this fee schedule

meets the requirements for an operating permits program in New Mexico.

The State will collect 2.7 million dollars per year to support all

applicable part 70 activities. The State projects the direct cost to

fund the operation of the title V program to be 2.3 million dollars per

year, and the indirect cost to be approximately $372,000. The State

anticipates increasing its air quality staff by 38 new full time

employees (FTE), a total of 1/3 of the existing air program staff. Any

changes in the fees would need to be made by NMED through the New

Mexico Environmental Improvement Board.

4. Provisions Implementing the Requirements of Other Titles of the Act

The State of New Mexico acknowledges that its request for approval

of a part 70 program is also a request for approval of a program for

delegation of section 112 standards as they apply to part 70 sources.

The State of New Mexico currently receives delegation of any new

provisions required by section 112 of the Act (governing National

Emission Standards for Hazardous Air Pollutants (NESHAP)) on an annual

basis through a delegation agreement with EPA. Under the 1990

Amendments, the State can now receive delegation of any new authority

required by section 112 of the Act through approval of the State

operating permits program.

The State has the option at any time to request, under section

112(l) of the Act, delegation of section 112 requirements in the form

of State regulations which the State demonstrates are equivalent to the

corresponding section 112 provisions promulgated by EPA. At this time,

the State plans to use the mechanism of incorporation by reference to

adopt unchanged Federal section 112 requirements into its regulations.

The radionuclide NESHAP is a section 112 regulation and therefore,

also an applicable requirement under the State operating permits

program. The EPA will work with the State in the development of its

radionuclide program to ensure that permits are issued in a timely

manner.

Section 112(g) of the Act requires that, after the effective date

of a permits program under title V, no person may construct or

reconstruct any major source of any HAPs unless the State determines

that the maximum achievable control technology emission limitation

under section 112(g) for new sources will be met. Such determination

must be made on a case-by-case basis where no applicable limitations

have been established by the Administrator. After the title V effective

date and before the promulgation of the Federal 112(g) rule, New Mexico

intends to implement section 112(g) of the Act with regard to new

sources through the State's preconstruction process.

The State of New Mexico commits to appropriately implementing the

existing and future requirements of sections 111, 112 and 129 of the

Act, and all maximum achievable control technology (MACT) standards

promulgated in the future, in a timely manner.

The State of New Mexico commits to having an acid rain program in

place by January 1, 1995. The State will submit copies to EPA of any

proposed program rules, regulations and guidance prepared for review

and comment to meet the Federal implementation date and to issue

permits by December 1997.

5. Enforcement Provisions

The NMED's operating permits program submittal addressed the

enforcement requirements of 40 CFR 70.4(b)(4)(ii) and 70.4(b)(5) in

Item VIII-''Enforcement Provisions.'' In a supplemental submittal,

received by EPA after the November 15, 1993 submittal, the Regional

Office received a signed Memorandum of Understanding between EPA Region

6 and NMED. This document, which was the product of negotiations

between EPA Region 6 and NMED, had been awaiting signature at the time

of the original submittal. Item VIII of the State's submittal addresses

the following issues: (A) Compliance Tracking and Enforcement Plan (40

CFR 70.4(b)(4)(ii) and 70.4(b)(5)); (B) Commitment to Submit

Enforcement Information (40 CFR 70.4(b)(9)); and (C) Enforcement

Authority (40 CFR 70.4(b)(2) and 70.4(b)(3)(vii)).

6. Technical Support Document

The results of this review will be shown in a document entitled

``Technical Support Document'', which will be available in the docket

at the locations noted above. The technical support documentation shows

that all operating permits program requirements of part 70 and relevant

guidance were met by the submittal for the NMED, except with regard to

criminal enforcement authority.

7. Summary

The State of New Mexico submitted to EPA, under a cover letter from

the Governor dated November 15, 1993, the State's operating permits

program. The submittal has adequately addressed all sixteen (16)

elements required for full approval as discussed in part 70, except

with regard to criminal fine authority. The State of New Mexico

addressed appropriately all requirements necessary to receive interim

approval of the State operating permits program pursuant to title V,

1990 Amendments and 40 CFR part 70.

B. Options for Approval/Disapproval and Implications

The EPA is proposing to grant interim approval of the operating

permits program submitted by New Mexico on November 15, 1993. Interim

approvals under section 502(g) of the Act do not create any new

requirements, but simply approve requirements that the State is already

imposing. If promulgated, the State must make the following changes to

receive full approval: Correct the statutory defect in criminal fine

authority. In addition to raising the criminal fine amounts to at least

$10,000 for all offenses listed in 40 CFR 70.11(a)(3)(ii), statutory

revisions must provide authority for the imposition of those fines on a

per day per violation basis, as required by 40 CFR 70.11(a)(3)(ii).

Evidence of these statutory revisions and their procedurally correct

adoption must be submitted to EPA within 18 months of EPA's approval of

the New Mexico operating permits program. This interim approval, which

may not be renewed, extends for a period of up to two 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 permit program in the State. Permits issued under a program

with interim approval have full standing with respect to part 70, and

the one year time period for submittal of permit applications by

subject sources begins upon interim approval, as does the three year

time period for processing the initial permit applications.

If this proposed interim approval is converted to a disapproval, it

will not affect any existing State requirements applicable to small

entities. Federal disapproval of the State submittal would not affect

its State-enforceability. Moreover, EPA's disapproval of the submittal

would not impose a new Federal requirement. Therefore, EPA certifies

that such a disapproval action would not have a significant impact on a

substantial number of small entities because it would not remove

existing State requirements or substitute a new Federal requirement.

III. Proposed Rulemaking Action

In this action, EPA is proposing interim approval of the operating

permits program submitted by the State of New Mexico. The program was

submitted by the State to EPA for the purpose of complying with Federal

requirements found in title V of the 1990 Amendments, and in 40 CFR

part 70, which mandate that States develop, and submit to EPA, programs

for issuing operating permits to all major stationary sources, and to

certain other sources with the exceptions of Bernalillo County and

Indian Lands.

Requirements for title V approval, specified in 40 CFR 70.4(b),

encompass section 112(l)(5) requirements for approval of a program for

delegation of Federal section 112 standards 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, as part of this interim approval, 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. This applies

to existing and future standards as they apply to sources covered by

the part 70 program.

EPA has reviewed this submittal of the New Mexico operating permits

program and is proposing interim approval. Certain defects in the

State's statutory criminal fine authority preclude EPA from granting

full approval of the State's operating permits program at this time.

EPA is proposing to grant interim approval, subject to the State

obtaining the needed criminal fine authority within 18 months after the

Administrator's approval of the New Mexico title V program pursuant to

40 CFR 70.4.

IV. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

rule. Copies of the State's submittal and other information relied upon

for the proposed interim approval are contained in a docket maintained

at the EPA Regional Office. The docket is an organized and complete

file of all the information submitted to, or otherwise considered by,

EPA in the development of this proposed 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 rulemaking

process; and

(2) To serve as the record in case of judicial review. EPA will

consider any comments received by June 20, 1994.

B. Executive Order 12866

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the

Agency must determine whether the regulatory action is ``significant''

and therefore subject to review of the Office of Management and Budget

(OMB) and the requirements of the Executive Order. The Order defines

``significant'' regulatory action as one that is likely to lead to a

rule that may:Q02

(1) Have an annual effect on the economy of $100 million or more,

or adversely and materially affect a sector of the economy,

productivity, competition, jobs, the environment, public health or

safety, or State, local or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an

action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants,

user fees, or loan programs or the rights and obligations of recipients

thereof; or

(4) Raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

It has been determined that this rule is not a ``significant

regulatory action'' under the terms of Executive Order 12866 and is

therefore not subject to OMB review.

C. Paperwork Reduction Act

Under the Paperwork Reduction Act (44 U.S.C. 3501, et seq.),

Federal agencies must obtain OMB clearance for collection of

information from ten (10) or more non-Federal respondents.

D. 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.

Operating permits program approvals under section 502 of the Act do

not create any new requirements, but simply approve requirements that

the State is already imposing. Therefore, because the Federal operating

permits program approval does not impose any new requirements, I

certify 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 Act, preparation of a regulatory flexibility

analysis would constitute Federal inquiry into the economic

reasonableness of State action. The Act forbids EPA to base its actions

concerning operating permits programs on such grounds (Union Electric

Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C.

7410(a)(2)).

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations.

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

Dated: May 11, 1994.

Allyn M. Davis,

Acting Regional Administrator (6A).

[FR Doc. 94-12246 Filed 5-18-94; 8:45 am]

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