Clean Air Act Interim Approval of Operating Permits Program; Louisiana Department of Environmental Quality

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[LA-001; FRL-5057-6]

Clean Air Act Interim Approval of Operating Permits Program;

Louisiana Department of Environmental Quality

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the operating permits

program submitted by the Governor of Louisiana for the Louisiana

Department of Environmental Quality (LDEQ) for the purpose of complying

with Federal requirements which mandate that States develop, and submit

to the EPA, programs for issuing operating permits to all major

stationary sources, and to certain other sources with the exception of

sources on Indian Lands.

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

September 26, 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 listed below. Copies of the State's submittal and other

supporting information used in developing the proposed interim approval

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.

Louisiana Department of Environmental Quality, Office of Air

Quality, 7290 Bluebonnet Blvd., P.O. Box 82135, Baton Rouge, Louisiana

70884-2135.

FOR FURTHER INFORMATION CONTACT: Joyce P. Stanton, New Source Review

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

suite 700, Dallas, Texas 75202-2733, telephone 214-665-7218.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

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

November 15, 1990 (``the Act''), the 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 40 Code of Federal Regulations (CFR) part 70. Title V

requires States to develop, and submit to the 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

the EPA by November 15, 1993, and that the 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

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

the requirements of 40 CFR part 70, the EPA may grant the program

interim approval for a period of up to two years. If the 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 Act, the Governor of each State

is required to 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. Louisiana

submitted, under the signature of Governor Edwin W. Edwards, the

operating permits program, prepared by LDEQ, to be implemented in all

areas of the State of Louisiana with the exception of Indian Lands.

In the LDEQ operating permits program submittal, LDEQ does not

assert jurisdiction over Indian lands or reservations. To date, no

tribal government in Louisiana 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 the EPA to implement an operating permits

program under title V of the Act. The EPA will, where appropriate,

conduct a Federal title V operating permits program in accordance with

forthcoming EPA regulations, for those Indian tribes which do not apply

for treatment as States under the Act.

40 CFR 70.4(b)(1) requires that the submittal contain a program

description of Louisiana's operating permits program describing how

LDEQ intends to carry out its responsibilities under the part 70

regulations. The program description, contained in Volume I of the

submittal, explains that this operating permits program was developed

to satisfy all of the requirements of 40 CFR part 70. The operating

permits program will incorporate the review and issuance procedures for

part 70 operating permits into the existing State preconstruction

permit review and issuance procedures.

The program description contains a description of the

organizational structure of the LDEQ Air Quality Division and a

description of the agency's permit related responsibilities. The Air

Quality Division is divided into nine sections. Through the Small

Business Assistance Section, the LDEQ provides technical assistance to

small businesses to help them comply with new regulations under the

Act.

40 CFR 70.4(b)(3) requires the Governor 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 Louisiana submitted an Attorney General's

Opinion under the First Assistant Attorney General's signature

demonstrating adequate legal authority as required by Federal law and

regulation for source category-limited interim approval as further

discussed below.

The Attorney General's Opinion contains documentation of adequate

legal authority to carry out the issuance of permits to all sources

subject to the requirements of the part 70 regulations, and to

promulgate regulations in compliance with applicable State and Federal

laws. The Attorney General's Opinion cites 30 Louisiana Revised Statute

(L.R.S.) 2023, which establishes a maximum permit term of ten years,

and allows LDEQ to modify a permit for cause in accordance with law,

rule or regulation. Through these statutory provisions LDEQ has

developed regulations which provide a five-year permit term for all

sources, and which allow permits to be terminated, modified, or revoked

and reissued for cause.

The LDEQ has the authority to enforce the regulations either

through an administrative action to require compliance or a civil

action to compel compliance and recover penalties. Penalties for

administrative and civil enforcement are consistent with the penalty

requirements contained in 40 CFR 70.11. The State also possesses

criminal authority to compel enforcement. However, for criminal

violations, the State law requires a willful and knowing violation,

while part 70 only requires a knowing violation. The Attorney General's

Opinion demonstrates through case law that there is no distinction

between these two requirements under Louisiana law. Therefore, this

difference is not a defect for purposes of part 70.

30 L.R.S. section 2025(F)(1) provides that an emission of any

substance in contravention of regulations, permit terms, and conditions

pursuant thereto, that endangers or that could endanger human life or

health, is a felony subject to a fine of not more than $1,000,000 or

the cost of cleanup, and an additional fine of up to $100,000 per

violation, which may be assessed for each day the violation continues,

and imprisonment of up to ten years. 30 L.R.S. section 2025(F)(2)

requires that a person who commits a violation of an emission

limitation or non-emission related applicable requirement or permit

condition that does not endanger or could not endanger human life or

health is guilty of a misdemeanor and may be fined not more that

$25,000 per violation, which may be assessed for each day the violation

continues and imprisonment of up to one year. This is consistent with

40 CFR 70.11 which requires criminal penalties to be recoverable in a

maximum amount of not less than $10,000 per day per violation for any

knowing violation of any applicable requirement, any permit condition,

or fee or filing requirement.

All records of LDEQ are available to the public under 44 L.R.S.

sections 1 and 31, unless the Secretary determines that disclosure

would either impair an ongoing investigation or disclose trade secrets.

This statute provides that certain environmental information such as

air emission data may not be held confidential. However, it is not

clear whether these confidentiality provisions could be interpreted to

protect from disclosure the contents of the permit itself. As a

condition of full approval, LDEQ will be required either to submit an

Attorney General's Opinion demonstrating that its statute is

interpreted not to allow any portion of a permit to be held

confidential, consistent with section 503(e) of the Act, or to revise

Louisiana Administrative Code (LAC) 33:III. Chapter 5, AQ#70, section

517.F to clarify that no portion of the permit may be considered

confidential.

The State statute requires judicial review and a civil judicial

order to proceed with permit issuance as the only remedy available for

failure of LDEQ to act on a permit application within the specific time

requirements. The judicial review provided by the State meets the

requirements of 40 CFR part 70.

30 L.R.S. sections 2011(D)(2), 2022, and 2023 of the State statute

allows LDEQ discretionary authority to issue variances. The EPA regards

this provision as wholly external to the operating permits program

submittal and therefore the statutory variance provision is not being

approved as part of the title V operating permits program. Any

variances that may be issued by LDEQ will not have the effect of

revising the title V permit or relieving the source from compliance

with any requirements of the Act unless the variance is processed

through title V modification procedures.

The Attorney General's opinion has demonstrated that oil and gas

wellheads and pipelines will not constitute part 70 sources. Such a

demonstration was required by the State statutory provision at 30

L.R.S. section 2022(C)(1) which allowed for default issuance of State

permits to wellheads and pipelines 74 days after receipt of a permit

application by the permitting authority.

The Attorney General's opinion has also demonstrated that cotton

gins will not constitute part 70 sources. This demonstration was

required because the State statute prohibits the State from regulating

controlled burning of cotton gin agricultural wastes in connection with

cotton gin operations.

30 L.R.S. section 2054(B)(2)(b) provides that the Secretary of the

LDEQ has no jurisdiction or authority to make any regulation with

respect to burning of agricultural by-products in the field in

connection with the planting, harvesting or processing of agricultural

products, or with respect to controlled burning in connection with

timber stand management or with respect to controlled burning of

pastureland or marshland in connection with trapping or livestock

production. These sources do not meet the part 70 definition of major

source because air emissions from these sources are fugitive, and 40

CFR 70.2 does not require that fugitive emissions be counted in

determining whether such sources are major for purposes of section

302(j) of the Act or title I nonattainment definitions of ``major

source.'' Therefore, the State's lack of authority to permit the types

of controlled burning described in this section of Louisiana law is not

a defect in Louisiana's part 70 operating permits program.

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

program documentation not contained in the regulations, such as permit

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

its operating permits program. The State addresses this requirement in

Volumes I and III of its title V operating permits program submittal.

Volume III contains a model permit, application forms and instructions,

including the standard Phase II acid rain forms. Volume I contains a

description of the State's compliance tracking and enforcement program,

including the criteria for monitoring source compliance.

2. Regulations and Program Implementation

The State of Louisiana has submitted Air Quality Division

regulations LAC 33:III. Chapter 5, AQ#70-''Permit Procedures'' (``the

permit regulations'') and LAC 33:III. Chapter 65, AQ#76-''Rules and

Regulations for the Fee System of the Air Quality Control Programs''

(``the fee regulations''), for implementing the State's operating

permits program as required by 40 CFR 70.4(b)(2). Sufficient evidence

of their procedurally correct adoption was submitted in Volume III of

the 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 following requirements, set out in the EPA's part 70

regulation, are addressed in the State's submittal: (1) Provisions to

determine applicability (40 CFR 70.3(a)): AQ#70 section 507.A.1; (2)

Provisions to determine complete applications (40 CFR 70.5(a)(2)) and

program documentation (40 CFR 70.4(b)(4)): AQ#70 section 519 and AQ#70

section 517 respectively, and Volume III, Permit Forms and

Instructions; (3) Public Participation (40 CFR 70.7(h)): AQ#70 section

531.A; (4) Provisions for minor permit modifications (40 CFR

70.7(e)(2)): AQ#70 section 525; (5) Provisions for permit content (40

CFR 70.6(a)); Volume III, Permit Forms and Instructions; (6) Provisions

for operational flexibility (40 CFR 70.4(b)(12)): AQ#70 section 507.G;

(7) Provisions to determine insignificant activities (40 CFR

70.4(b)(2)): A list of insignificant activities was not included with

the submittal and may be submitted as a revision at a later date; (8)

Enforcement provisions (40 CFR 70.4(b)(5) and 70.4(b)(4)(ii)): 30

L.R.S. section 2025.F and Volume I, Enforcement and Compliance

Programs.

Following is a discussion of certain specific provisions in the

State's submission as they relate to requirements of 40 CFR part 70:

(a) Applicability criteria, including any criteria used to

determine insignificant activities or emissions levels (40 CFR

70.4(b)(2) and 70.3(a)): These requirements are met by AQ#70 section

517 which requires the permit application to include information

regarding emissions from sources of all regulated air pollutants and

does not allow an exemption for insignificant activities. The permit

regulations require that the applicable sources submit an application

prior to construction, reconstruction, or modification which may result

in an increase in air contaminants. AQ#70 section 507.A.3 requires that

permits incorporate all federally applicable requirements for each

emissions unit at the source. AQ#70 section 507.A requires all major

sources, all sources required to obtain an operating permit pursuant to

regulations promulgated under sections 111 or 112 of the Act (except

sources that would be required to obtain a permit solely because they

are regulated sources pursuant to section 112(r) of the Act), and all

affected sources under the acid rain program to apply for and receive

an operating permit.

Because of a regulation involving research and development (R & D)

facilities discussed below, the State will lack authority to ensure

that all part 70 sources submit an application in the first year after

interim approval. This defect in the State's authority will render the

interim approval granted to the Louisiana operating permits program, a

source category-limited interim approval. Further discussion of this

issue follows.

AQ#70 section 501.B.7 provides that the permitting authority may

allow a

certain complex within a facility to be considered as a source separate

from the facility with which it is co-located, provided that the

complex is used solely for R & D of new processes and/or products, and

is not engaged in the manufacture of products for commercial sale. The

permit regulations are inconsistent with 40 CFR 70.3 which requires

that a State's operating permits program provide for the permitting of

all major sources, and 40 CFR 70.4(b)(3)(i) which requires that the

State demonstrate adequate legal authority to issue permits and assure

compliance with each applicable requirement by all part 70 sources.

Confusion over this issue has occurred as a result of language in

the preamble to the final July 21, 1992, 40 CFR part 70 rulemaking (57

FR 32264). The preamble language indicates that States would have the

flexibility in many cases to treat R & D facilities separately from the

manufacturing facilities with which they are co-located. The EPA

intended for this language to clarify the flexibility in part 70 for

allowing R & D facilities to be treated separately in cases where the R

& D facility has a different two-digit Standard Industrial

Classification (``SIC'') code and is not a support facility. This

approach is consistent with the treatment of R & D facilities in the

New Source Review program.

40 CFR 70.2 requires all sources located on contiguous or adjacent

properties, under common control, and belonging to a single major

industrial grouping to be considered as the same source. The Louisiana

permit regulations could cause certain part 70 major sources, as

defined in 40 CFR 70.2, or portions of such sources with the same SIC

code, to be treated as separate sources. This could cause some part 70

sources to be exempted from coverage by part 70 permits which must

ensure all part 70 requirements for these sources are met.

The EPA's August 2, 1993, guidance provides that the EPA can grant

source category-limited interim approval to States whose programs do

not provide for permitting all required sources if the State makes a

showing that two criteria are met: (1) That there were ``compelling

reasons'' for the exclusions; and (2) that all required sources will be

permitted on a schedule that ``substantially meets'' the requirements

of 40 CFR part 70. The EPA considers Louisiana's misinterpretation of

the preamble language to be a compelling reason for granting this type

of interim approval. Louisiana has not requested additional time for

issuing initial permits. In addition, it has been estimated that a

small number of major sources will be deferred from permitting due to

the Louisiana R & D provision, and that such sources can still be

permitted within the three-year time frame. This substantially meets

the requirements of 40 CFR part 70. Also, for these reasons, the EPA is

not requesting a detailed, written analysis supporting the State's

claim that its program substantially meets the part 70 applicability

requirement.

Source category-limited interim approval will allow Louisiana to

develop a permitting schedule to provide for the permitting of any

``exempted'' sources during the latter part of the program's three-year

transition period, after the permit regulations have been revised.

Notwithstanding the granting of source category-limited interim

approval based on the possibility that some major sources will not be

required to submit applications within the first year after program

approval, the EPA expects that any permits issued will address all

applicable requirements, as required by 40 CFR 70.7(a)(1)(iv).

For full part 70 approval, the LDEQ will be required to revise its

permit regulations and demonstrate that no source or portion of a

source which would be defined as major under 40 CFR 70.2 will be

exempted from part 70 requirements because an R & D facility is co-

located with the source. Guidance on the R & D issue is expected to be

forthcoming from the EPA Office of Air Quality Planning and Standards

in the near future.

AQ#70 section 502 defines ``title I modification'' as a change at a

site that qualifies as a modification under section 111 of the Act, or

section 112(g) of the Act, or that results in a significant net

emissions increase under part C or part D of the Act. The EPA believes

the phrase ``modifications under any provision of title I of the Act''

in 40 CFR 70.7(e)(2)(i)(A)(5) is best interpreted to mean literally any

change at a source that would trigger permitting authority review under

regulations approved or promulgated under title I of the Act. This

would include State preconstruction review programs approved by the EPA

into the State Implementation Plan (SIP) under section 110(a)(2)(C) of

the Act and regulations addressing source changes that trigger National

Emission Standards for Hazardous Air Pollutants (NESHAPS) established

pursuant to section 112 prior to the 1990 amendments. The EPA intends

to revise its criteria for interim approval in 40 CFR 70.4(d) prior to

final approval on the proposal to grant Louisiana interim approval so

that interim approval may be granted to State programs, like

Louisiana's, that adopt a narrower definition of ``title I

modification'' than the Federal definition.

As noted, the EPA believes the better interpretation of ``title I

modification'' would preclude granting full approval to the Louisiana

operating permits program. However, in the proposal to revise 40 CFR

part 70, the EPA will be taking comment on whether the criteria in 40

CFR 70.7(e)(2)(i)(A), including the phrase ``modification under any

provision of title I,'' should be interpreted in a manner that would

allow the minor modification process to be used for changes reviewed

under programs approved pursuant to section 110(a)(2)(C) of the Act and

changes that trigger the application of NESHAPS established pursuant to

section 112 of the Act prior to the 1990 amendments. Should the EPA

adopt this alternative interpretation of ``title I modification'' which

allows the minor modification process to be used for changes reviewed

under programs approved pursuant to section 110(a)(2)(C) of the Act and

changes that trigger the application of NESHAPS established pursuant to

section 112 of the Act prior to the 1990 amendments, the definition of

``title I modification'' in Louisiana's operating permits program would

then be fully consistent with the 40 CFR part 70 ``title I

modification'' definition without change.

With regard to the definition of ``major source'', the definition

in AQ#70 section 502 is broader than the part 70 definition because it

does not require the sources to belong to a single major industrial

grouping. This is approvable under part 70, and will result in more

sources being covered by the State's operating permits program than

would be required by the part 70 definition of ``major source.''

(b) Permit application requirements (40 CFR 70.5(c)): These

requirements are addressed in AQ#70 section 517. In addition to the

information required to be submitted by 40 CFR 70.5(c), the permit

regulations also require the submittal of a location map of the

facility. AQ#70 section 507.G provides for alternative operating

scenarios, consistent with the requirements of 40 CFR 70.4(b)(12), and

requires the sources requesting alternative operating scenarios to

submit the information in accordance with AQ#70 section 517.

(c) Permit issuance and revision procedures (40 CFR 70.7): These

requirements are met by the permit regulations. AQ#70 section 507.C.1

requires all existing sources to submit an application within one year

of the effective date of the State's operating permits program

approval. AQ#70 section 507.C.2 requires that a permit application be

submitted prior to construction, reconstruction, or modification of any

source. Permit applications for renewal are required at least six

months prior to the date of permit expiration, but not more than

eighteen months prior to the date of permit expiration. The permit

regulations contain criteria for determining completeness of

applications consistent with 40 CFR 70.5(a)(2). Consistent with 40 CFR

70.7, the permit regulations prohibit a source from operating after the

time that the source is required to submit a timely and complete

application. AQ#70 section 507.B includes 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 consistent with 40 CFR 70.4(b)(10).

AQ#70 section 507.C.1.b contains the deadlines for submittal of

acid rain permit applications. Although this section purports to cover

all relevant dates for submittal of acid rain permit applications,

however, this section does not contain the deadlines required by 40 CFR

72.30(b)(2)(iii) for new units and for units that did not serve a

generator with a name plate capacity greater than 25 Megawatts

electrical on November 15, 1990, but which serve such a generator after

November 15, 1990. AQ#70 section 505.D.2 contains the deadlines for

submittal of acid rain permit applications consistent with those

required by title IV of the Act, but contradicts AQ#70 section

507.C.1.b. Even though AQ#70 section 505.A.4 states that any

requirement, provision, or emissions limitation of the Federal

regulations of the acid rain program, where applicable to an affected

source, shall supersede LAC 33:III Chapter 5 of the Louisiana

Regulations to the extent that such Federal regulations are

inconsistent with those permit regulations, the inconsistency between

AQ#70 section 505.D.2, 507.C.1.b and the Federal acid rain regulations

creates a lack of clarity and should be eliminated. Therefore, for full

part 70 approval, AQ#70 section 507.C.1.b must be revised to require

the affected sources to comply with the deadlines in LAC 33.III.505.D.2

consistent with 40 CFR parts 70 and 72.

AQ#70 section 519 contains provisions regarding completeness

determinations and requests for additional information consistent with

40 CFR 70.4(b)(6), 70.5(a)(2) and 70.7(a)(4). Requirements for

application contents are found in AQ#70 section 517.D and are

consistent with 40 CFR 70.5(c).

AQ#70 section 521 contains the requirements for administrative

amendments. AQ#70 section 521.A.5 allows an administrative amendment

for the incorporation of changes to render preconstruction permit terms

and conditions consistent with emissions data and operating parameters

as determined by start-up testing results provided the following

criteria are met: a. The changes are a result of a test performed upon

start-up of newly constructed, installed, or modified equipment or

operations; b. increases in permitted emissions will not exceed 5 tons

per year for any regulated pollutant; c. increases in permitted

emissions of Louisiana toxic air pollutants or of Federal hazardous air

pollutants would not constitute a modification under LAC 33:III.

Chapter 51 or under section 112(g) of the Act; d. changes in emissions

would not require new source review for prevention of significant

deterioration or nonattainment, and would not trigger the applicability

of any federally applicable requirement; e. changes in emissions would

not qualify as a significant modification; f. the request is submitted

no later than 12 months after commencing operation; and g. the permit

contains a term which provides for the incorporation of test results by

administrative amendment in accordance with the section entitled

``Administrative Amendments.'' The EPA considers these provisions to be

similar in many respects to the authority allowed for reasonably

anticipated operating scenarios without a permit revision under 40 CFR

70.6(a)(9), because the permit will give adequate notice of and provide

limitations on the changes that may occur through a subsequent

administrative amendment. In addition, these provisions are consistent

with part 70 revision procedures because they achieve substantially the

same result as would be the case if Louisiana's preconstruction and

operating permitting programs were separate. Since, if these programs

were separate, 40 CFR 70.5(a)(1)(ii) and 70.4(b)(14) together would

allow changes to preconstruction permits to occur prior to revision of

the part 70 permit (unless such changes conflicted with an existing

part 70 permit), the use of an expedited revision procedure for

incorporation of test results, such as that in AQ#70 section 521.A.6,

produces substantially equivalent results where the preconstruction and

operating permit programs are merged. In light of these considerations,

the EPA believes this provision is consistent with part 70.

AQ#70 section 521.A.6 provides that an administrative amendment may

be used to revise a permit for changes that would not violate any

applicable requirement or standard, which do not require permit

modifications under 40 CFR part 70 and which the permitting authority

considers to be similar in nature to the changes listed in that

subsection. This provision could be interpreted to allow administrative

amendments to permits to incorporate changes authorized by 40 CFR

70.4(b)(14). These ``off-permit'' changes, which are not addressed or

prohibited by the permit, may be made under part 70 without permit

revisions. However, the part 70 rule contains no authority for such

changes to be incorporated into operating permits except through the

appropriate part 70 permit procedures, which may be either a minor or

significant modification. Therefore, for full part 70 approval, section

521.A.6 must be revised to eliminate administrative amendments for this

type of change. In the interim, the EPA expects Louisiana to implement

this provision in a manner consistent with 40 CFR part 70.

AQ#70 section 521.A.6 also allows changes to be made to operating

permits by administrative amendment where the State's permitting

authority has determined they are similar to the changes listed in

AQ#70 section 521.A. Part 70 allows changes submitted as part of a

State's part 70 program, in addition to those specified in 40 CFR

70.7(d)(1), to be made as administrative amendments where the EPA

Administrator determines those changes to be similar to the changes

listed in 40 CFR 70.7(d)(1)(i)-(iv). However, no such proposed changes

were submitted by the State as part of its operating permits program,

and part 70 does not allow for the substitution of the State permitting

authority's approval for the Administrator's approval, which is

required by 40 CFR 70.7(d)(1)(vi). Therefore, for full part 70

approval, this defect in AQ#70 section 521.A.6 of the permit

regulations must be corrected.

The requirements of 40 CFR 70.4(b)(13), (16), 70.7(h), and 70.8 for

permit issuance, renewals, reopenings and revisions, including public

notice, and EPA and affected State review are met by the provisions of

AQ#70 sections 519, 531, and 533. AQ#70 section 533.B of the permit

regulations requires the applicant, rather than the permitting

authority, to submit the permit applications directly to the

Administrator. The notification to affected States will be provided by

the permitting authority within 5 working days of receipt of a complete

permit application as required by 40 CFR part 70. AQ#70 sections 533.C

and D and 531.B provide EPA review, objection and affected State notice

only for major sources. The Administrator may, at the time of an

operating permits program approval, waive the requirement for affected

State and EPA review for any category of sources other than major

sources pursuant to 40 CFR 70.8(a)(2). Pursuant to 40 CFR 70.3(b)(1),

the State is, under AQ#70 section 507.A.1, also deferring from the part

70 program at this time, non-major sources with the exception of acid

rain sources and solid waste incineration units required to obtain

permits pursuant to section 129(e) of the Act. This deferral is

acceptable under 40 CFR 70.3(b)(1) until the Administrator completes a

rulemaking to determine how the program should be structured for non-

major sources and whether any permanent exemptions in addition to those

provided for in 40 CFR 70.3(b)(4) are appropriate.

The requirements of 40 CFR 70.7(e) for minor modification

procedures are established in AQ#70 section 525. 40 CFR 70.7(e)(2)

allows the use of these expedited minor modification procedures for

certain types of changes. Among other limitations, the minor

modification procedures may not be used for any changes to ``case-by-

case'' determinations. AQ#70 section 525.A.2 of the permit regulations

defines the criteria for minor modifications.

Questions have been raised concerning whether the 40 CFR

70.7(e)(2)(i)(A)(3) provisions prohibiting changes in ``case-by-case''

determinations would apply in the instance of a preconstruction permit

in which the permitting authority, through a minor modification

procedure, changes a source-specific control technology requirement not

required under part C or D or section 111 or 112 of the Act, or an

emission limitation determination established on a source-specific

basis. The EPA believes the better interpretation of 40 CFR

70.7(e)(2)(i)(A)(3) requires that any requirement imposed on a source-

specific basis, such as one in which the permitting authority has

discretion in setting the requirement for the particular source, must

be considered to be a ``case-by-case'' determination. Therefore, the

EPA believes that a change involving a source-specific requirement in a

preconstruction permit would be considered a ``case-by-case

determination of an emission limitation'' under 40 CFR

70.7(e)(2)(i)(A)(3), ineligible for processing as a minor permit

modification. AQ#70 section 525.A.2.d allows the use of minor

modification procedures for some changes which would be considered

``case-by-case'' emission limits under the interpretation referred to

above. The EPA intends to revise 40 CFR part 70 to make interim

approval possible for a State which uses the approach taken in the

Louisiana operating permits program for the ``case-by-case''

restriction. The EPA is also soliciting comment in the proposal to

revise 40 CFR part 70 with regard to whether the criteria in 40 CFR

70.7(e)(2)(i)(A)(3) should be interpreted to allow source specific

minor preconstruction permit review changes in control technology

determinations or emission limitation determinations to be eligible for

minor modification procedures. Should EPA decide in favor of this

interpretation, Louisiana's approach to the ``case-by-case''

restriction would be fully consistent with 40 CFR part 70 without

change. If the EPA decides, instead, to adopt its current position

described above, the Louisiana operating permits program would be

inconsistent with 40 CFR part 70 requirements, because it allows

changes in control technology determinations and emission limitation

determinations among other changes that may fall within the 40 CFR

70.7(e)(2)(i)(A)(3) restriction to be processed through the minor

modification procedures. Therefore, as a condition of full part 70

approval, Louisiana would be required to revise these permit

regulations to provide that such changes must be processed as

significant modifications, as required by 40 CFR 70.7(e)(4).

AQ#70 section 525 requires that the application for a minor

modification be submitted to and approved by the permitting authority

prior to making the proposed change at the source. AQ#70 section

525.B.6 states that for any minor modification pertaining to a change

which affects federally enforceable permit terms and conditions at a

part 70 source, the terms of the permit revision shall not be federally

enforceable pursuant to 40 CFR part 70 until after the required EPA 45-

day review period has expired or until the EPA has notified the

permitting authority that the EPA will not object to final issuance of

the permit modification, whichever is first. If the permitting

authority has issued approval of the modification prior to such time,

the terms of the permit revision shall be enforceable by the State upon

approval by the permitting authority consistent with the approved SIP.

AQ#70 section 525.B.7 further provides that, if at any time after the

approval by the permitting authority the EPA objects, the permit will

be reopened. This is consistent with 40 CFR 70.7(e)(2)(v). This section

of the permit regulations provides time-frames for action on the minor

modification applications consistent with 40 CFR 70.7(e)(2)(iv). The

permit regulations do not provide for group processing of minor

modifications for groups of sources. Since the requirements in 40 CFR

part 70 for group processing are not mandatory, this is acceptable.

AQ#70 section 527 addresses the criteria for significant

modifications and substantially meets the requirements of 40 CFR

70.7(e)(4). AQ#70 section 527.A.3, in allowing certain changes that

render existing compliance terms irrelevant to be incorporated through

minor modification procedures, appears to refer to changes such as

those described in 40 CFR 70.4(b)(14), ``off-permit'' changes. However

the language of the permit regulations is unclear and requires

clarification. To remedy this defect, the State should add language

clarifying that the modification is one which would qualify as a change

under 40 CFR 70.4(b)(14) because it is not addressed or prohibited by

the permit and would otherwise qualify for treatment as a minor

modification under 40 CFR 70.7(e)(2)(i)(A).

Provisions for permit reopenings are addressed in AQ#70 section 529

and are consistent with the requirements of 40 CFR 70.7(f).

40 CFR 70.8(a)(3) requires that each State permitting authority

keep for five years such records as the Administrator may reasonably

require to ascertain whether the State program complies with the

requirements of the Act and 40 CFR part 70. 44 L.R.S. section 1

contains a very broad definition of ``public records.'' 44 L.R.S.

section 36 requires the records to be kept for three years unless a

longer formal retention schedule has been developed. As a condition of

full part 70 approval, a statutory change will be necessary or a

supplemental Attorney General's Opinion will need to be submitted

demonstrating how the current statute ensures that the required records

will be kept for at least five years.

(d) Permit Content (40 CFR 70.6(a)): The permit content

requirements of 40 CFR 70.6(a) are met by the model permit submitted in

Volume III of the State's part 70 submittal. However, 40 CFR

70.4(b)(16) also requires provisions in the State's program

implementing the requirements of 40 CFR 70.6 and 70.7. To meet these

part 70 requirements, AQ#70 sections 501.C.5 and 6 speak generally to

permit terms and conditions, but do not set out all requirements for

each operating permit. Specifically they do not include a requirement

that the permit specify the origin of and reference the authority for

each term or condition, nor do they identify differences in form from

the applicable requirements upon which the terms are based. Other

elements required by 40 CFR 70.6 are also not addressed. 40 CFR 70.6(a)

includes requirements for emission limitations, monitoring and

recordkeeping, and specifies that the regulation must state that no

permit revision shall be required under any approved economic

incentive, marketable permits or similar program. A severability clause

is also required to ensure the continued validity of the various permit

requirements in the event of a challenge to any portion of the permit.

These elements must be addressed in the permit regulations in order to

afford citizens the opportunity to legally challenge permits. Although

some of these elements are contained in the State's model operating

permit, one condition of full part 70 approval will be that the permit

regulations be revised to require that all permit elements of 40 CFR

70.6(a) be included in each permit.

AQ#70 section 507.H meets the compliance requirements of 40 CFR

70.6(c). General permits as allowed by 40 CFR 70.6(d) and temporary

sources as allowed by 40 CFR 70.6(e) are provided for in AQ#70 sections

513.A and 513.B, respectively. These sections meet the requirements of

40 CFR part 70.

40 CFR 70.6(f) provides that the State may allow a provision in the

part 70 permit stating that compliance with the conditions of the

permit shall be deemed compliance with any applicable requirement as of

the date of permit issuance provided certain requirements are met.

AQ#70 section 507.I allows a very restricted use of such a ``permit

shield.'' If the permit does not specifically state that a permit

shield exists for a specific Federal program, no shield is presumed to

exist. AQ#70 section 507.I requires all permit shields to undergo

public notice requirements.

40 CFR 70.6(g) contains provisions which state that certain

``emergencies'' may constitute affirmative defenses to actions for

noncompliance. AQ#70 section 507.J provides emergency provisions

consistent with those of 40 CFR 70.6(g), using the term ``upset''

rather than ``emergency.''

40 CFR 70.4(b)(12) requires that the State's part 70 submittal

contain operational flexibility provisions. AQ#70 section 507.G

provides for operational flexibility consistent with 40 CFR

70.4(b)(12).

The permit regulations do not include a definition of ``emissions

allowable under the permit,'' because the State interprets the plain

meaning of this term to be clear in the context of the permit

regulations without further definition. The EPA agrees that the

Louisiana permit regulations taken as a whole adequately define

``emissions allowable under the permit.''

(e) Off-permit (40 CFR 70.4(b)(14) and (70.4(b)(15)): Section 507.F

of the permit regulations allows off-permit changes which meet the

requirements and provisions of 40 CFR 70.4(b)(14) and (15).

3. Permit Fee Demonstration

The fees for criteria air pollutants contained in the fee

regulations are below the presumptive minimum; therefore a detailed fee

demonstration was submitted in Volume I of the title V operating

permits program submittal. The fee regulations require a fee of $9.00

per ton for criteria pollutants based on actual emissions at major

sources. For facilities which emit hazardous air pollutants (HAPs), the

fees are $25, $50 or $100 per ton based on the class of the pollutant.

These fees, when totaled and divided by the total emissions, result in

the collection of approximately $19 per ton for part 70 sources. After

careful review, the State determined that these fees would support the

title V permit program costs as required by 40 CFR 70.9(a). The fee

demonstration explains that this fee structure allows program costs to

be covered without unduly penalizing any industry in the State, and the

fees generated would meet the program costs. The fee demonstration is

detailed and contains direct and indirect costs as well as the cost for

the implementation of enhanced monitoring, and titles III and IV of the

Act. The number of resource-hours and positions needed to implement the

program was calculated and the fees were adjusted to meet these costs.

The fee regulations contain a provision requiring an annual review of

the program fee schedule and fee regulations, based on the previous

year's costs of permit program operation. The Louisiana fee

demonstration shows that this fee schedule meets the requirements for

an operating permits program in Louisiana. The State will collect

$11,000,000 per year to support all applicable part 70 activities.

Total costs to administer the operating permits program are projected

to be $10.6 million per year. The State will also increase State air

quality staff by 14 positions. Any changes in the fees would need to be

made by a revision to the fee regulations.

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

The State of Louisiana acknowledges that its request for approval

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

delegation of unchanged section 112 standards under the authority of

section 112(l) as they apply to part 70 sources. Upon receiving

approval under section 112(l), the State may receive delegation of any

new authority required by section 112 of the Act through the delegation

process.

The State also 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 the 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 for part 70 sources. There is not yet a Federal definition of

``major'' for radionuclide sources. Therefore, until a major source

definition for radionuclides is promulgated, no source would be a major

section 112 source solely due to its radionuclide emissions. However, a

radionuclide source may, in the interim, be a major source under part

70 for another reason, thus requiring a part 70 permit. 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,

reconstruct or modify any major source of HAPs unless the State

determines that the maximum achievable control technology emission

limitation under section 112(g) will be met. Such determination must be

made on a case-by-case basis where no applicable limitations have been

established by the Administrator. During the period from the title V

effective date to the date the State has taken appropriate action to

implement the final section 112(g) rule (either adoption of the

unchanged Federal rule or approval of an existing State rule under

112(l)), Louisiana intends to implement section 112(g) of the Act

through the State's preconstruction process.

The State of Louisiana commits to appropriately implementing and

enforcing 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 Louisiana developed acid rain permit rules as AQ#70

section 505, which was submitted with the operating permits program

package. The State also submitted standard acid rain permit application

forms. These forms will be revised as updated model forms are provided

by the EPA. These rules and permit applications meet the requirements

of the acid rain program.

5. Enforcement Provisions

Louisiana's operating permits program submittal addressed the

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

Volume I which included a signed Memorandum of Understanding between

EPA Region 6 and LDEQ. 30 L.R.S. section 2025.F.1 allows for injunctive

relief for violations that are emissions-related, and 30 L.R.S. section

2025.F.2 allows for criminal penalties for violations of emissions

limitations, fee and filing requirements, tampering with a monitoring

device, and false statements. 30 L.R.S. section 2025.F.2.c provides

that a person shall not be considered to be in willful or knowing

violation of a fee or filing requirement that was not complied with

through excusable neglect.

The Louisiana Attorney General's Opinion has demonstrated that the

State's enforcement authority is adequate under the requirements of 40

CFR part 70, as discussed above.

6. Summary

The State of Louisiana submitted to the EPA, under a cover letter

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

permits program. The submittal has been reviewed for adequacy under the

requirements of 40 CFR part 70. The results of this review are included

in the technical support document. The submittal has adequately

addressed all sixteen (16) elements required for full approval as

discussed in part 70, except with regard to the 70.4(b)(16) requirement

to include requirements for all permit conditions in the permit

regulations, the requirement that a permit, or any portion of a permit,

may not be held confidential, the requirement that the permit

regulations ensure that no source, or portion of a source which would

be defined as major under 40 CFR 70.2 will be exempted from part 70

requirements because an R & D facility is co-located with a

manufacturing facility, the requirement that AQ#70 section 521.A.6

ensure that ``off-permit'' changes are not processed as administrative

amendments, the requirement for approval by the Administrator for any

changes similar to those allowed by AQ#70 section 521.A to be processed

as administrative amendments, the requirement that AQ#70 section

527.A.3 be clarified as referring to ``off-permit'' changes, the

requirement that AQ#70 section 507.C.1.b be revised to require that

affected sources comply with the deadlines in AQ#70 section 505.D.2,

and the requirement that records be kept for five years, as discussed

above. According to EPA's current interpretation of ``title I

modification'' and ``case-by-case determination,'' the Louisiana

operating permits program would also need to be revised for full

approval consistent with the Federal interpretation, by making the

definition of ``title I modification'' consistent with the Federal

definition, and by requiring that changes to ``case-by-case'' emission

limitation determinations and source-specific control technologies

among other changes must be processed as significant modifications as

required by 40 CFR 70.7(e)(2)(i)(3). However, if, as discussed above,

40 CFR part 70 is revised to adopt the alternative interpretation of

``title I modification'' and ``case-by-case determination,''

Louisiana's regulation with regard to these issues would be fully

consistent with 40 CFR part 70 without change. Louisiana's operating

permits program submittal meets all requirements necessary to receive

source category-limited 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 to the operating

permits program submitted by Louisiana 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. As discussed above, the State's regulation regarding R & D

facilities causes the State to lack the authority to ensure that all

part 70 sources submit an application in the first year following

interim approval. Therefore, Louisiana will be granted source category-

limited interim approval. In order to receive source category-limited

interim approval, Louisiana's operating permits program must

substantially meet the part 70 requirements and demonstrate a

compelling reason. The EPA is satisfied that these requirements have

been met. If promulgated, the State must make the changes noted above

to receive full approval.

Evidence of these statutory and regulatory revisions and their

procedurally correct adoption must be submitted to the EPA within 18

months of the EPA's approval of the Louisiana 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

the EPA is not obligated to promulgate a Federal permits program in the

State. Permits issued under a program with interim approval would 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 the 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, the EPA's disapproval of the submittal would

not impose a new Federal requirement.

III. Proposed Rulemaking Action

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

operating permits program submitted by the State of Louisiana. The

program was submitted by the State to the EPA for the purpose of

complying with Federal requirements found in title V of the Act, and in

40 CFR part 70, which mandate that States develop, and submit to the

EPA, programs for issuing operating permits to all major stationary

sources, and to certain other sources with the exception of 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 40

CFR 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.

The EPA has reviewed this submittal of the Louisiana operating

permits program and is proposing source category-limited interim

approval. Certain defects in the State's statutes and regulations

preclude the EPA from granting full approval of the State's operating

permits program at this time. The EPA is proposing to grant interim

approval, subject to the State obtaining the needed regulatory and

statutory revisions within 18 months after the Administrator's approval

of the Louisiana 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

interim approval. Copies of the State's submittal and other information

relied upon for the proposed interim approval are contained in a docket

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

complete file of all the information submitted to, or otherwise

considered by, the EPA in the development of this proposed interim

approval. The principal purposes of the docket are:

(1) To allow interested parties a means to identify and locate

documents so that they can effectively participate in the approval

process; and

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

consider any comments received by September 26, 1994.

B. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

C. Regulatory Flexibility Act

Under the Regulatory Flexibility Act, 5 U.S.C. 600, et seq, the 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, the 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 the 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,

Intergovernmental relations, Operating permits.

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

Dated: August 12, 1994.

W.B. Hathaway,

Acting Regional Administrator (6A).

[FR Doc. 94-20951 Filed 8-24-94; 8:45 am]

BILLING CODE 6560-50-F