Operating Permits Program Interim Approval Criteria; Proposed Rule ENVIRONMENTAL PROTECTION AGENCY

SUMMARY: The EPA is proposing revisions to the interim approval

criteria within the regulations in part 70 of chapter I of title 40 of

the Code of Federal Regulations. Part 70 contains regulations requiring

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

operating permits to major, and certain other, stationary sources of

air pollution. Today's action proposes to make two changes to those

criteria.

As a result of today's proposed revisions to part 70, the

permitting authority would have a period of time under the interim

approval approach to revise its program with respect to these

provisions to conform to the requirements of part 70 so that full

approval could be granted before expiration of the interim approval and

possible application of sanctions.

DATES: Comments on the proposed regulatory changes must be received by

September 28, 1994.

ADDRESSES: Comments must be mailed (in duplicate if possible) to: EPA

Air Docket (LE-131), Attn: Docket No. A-93-50, room M-1500, Waterside

Mall, 401 M Street SW, Washington, DC 20460.

Docket: Supporting information used in developing the proposed

regulatory revisions is contained in Docket No. A-93-50. This docket is

available for public inspection and copying between 8:30 a.m. and 3:30

p.m. Monday through Friday, at the preceeding address. A reasonable fee

may be charged for copying.

FOR FURTHER INFORMATION CONTACT: Michael Trutna (telephone 919/541-

5345), mail drop 15, United States Environmental Protection Agency,

Office of Air Quality Planning and Standards, Air Quality Management

Division, Research Triangle Park, North Carolina 27711.

SUPPLEMENTARY INFORMATION:

Comments. The EPA is likely to be unable to extend the public

comment period due to the necessity of promulgating these regulatory

revisions in time to take action to grant interim approval to operating

permits programs in late 1994. Two paper copies of each set of comments

are requested. Comments generated on computer should also be sent on an

IBM-compatible, 3 1/2 inch diskette and clearly labeled. Comments

should refer to specific page numbers and regulatory section numbers

whenever possible.

I. Background

Title V of the Clean Air Act (Act) Amendments of 1990, Public Law

101-549, enacted on November 15, 1990, requires EPA to promulgate

regulations establishing the requirements for development and submittal

of State programs and the minimum elements a program must contain to be

approvable. On July 21, 1992, EPA's regulations meeting the Title V

requirements were published in the Federal Register (57 FR 32250).

Title V and the part 70 regulations require States and local

agencies to submit operating permits programs to EPA within 3 years of

enactment of the 1990 Act Amendments. In accordance with title V, EPA

must take action within 1 year of program submittal to approve or

disapprove a program. Section 502(g) of the Act allows EPA to grant

interim approval to a program if it ``substantially meets the

requirements'' of title V. Interim approval may be granted for a period

of up to 2 years and may not be extended or renewed. The interim

approval provision allows permitting authorities time to correct the

program deficiencies preventing full program approval. The minimum

program elements that a program must contain to be eligible for interim

approval are contained in Sec. 70.4(d) of part 70.

The first proposed revision to part 70 addresses programs with

provisions allowing a permit to be revised through the minor permit

modification procedure to reflect a change at a facility which was

subject to EPA-approved minor source preconstruction permit

requirements, commonly referred to as ``minor new source review''

(minor NSR). There has been confusion and controversy as to whether

part 70 allows such changes to be processed as minor permit

modifications (see Secs. 70.7(e)(2)(i)(A)(3) and (5)). As discussed

below, EPA believes that the better interpretation of the current rule

would be that it does not allow minor NSR changes to be processed as

minor permit modifications. The purpose of the proposed change to part

70 is to allow a program to receive interim approval if that

interpretation is correct and the program allows minor NSR changes to

be incorporated into the permit through minor permit modification

procedures. Based on this regulatory revision, EPA intends to propose

interim approval for those State programs that allow minor NSR changes

to be incorporated into part 70 permits using minor permit modification

procedures.

The second proposed revision to part 70 addresses programs that do

not incorporate into a source's part 70 permit changes which are

established through an EPA-approved minor NSR program. Title V and part

70 require a permit to contain provisions that assure compliance with

all applicable requirements (section 502(b)(5)(A), Sec. 70.6(a)). The

definition in part 70 of applicable requirement includes requirements

established through minor NSR permitting procedures (Sec. 70.2,

definition of ``applicable requirement''). The proposed revision to

part 70 would, for the period of interim approval, allow permits to be

issued and revised without incorporating those source changes that are

applicable requirements solely because they are established through

minor NSR.

A. Interim Approval of Programs

Through the mechanism of interim approval, section 502(g) of the

Act allows EPA to grant permitting authorities limited relief from the

Act's tight timeframe for operating permit program development and

submittal to EPA. The timeframe in section 502(d) of the Act requires

program submittal within 3 years of enactment of the 1990 Act

amendments (i.e., by November 15, 1993). If the permitting authority is

unable to develop, adopt, and submit to EPA a fully approvable program

by the required date, EPA may grant the submitted program interim

approval if it ``substantially meets'' the requirements of title V (42

U.S.C. 7661a(g)). In the notice granting interim approval, EPA must

specify the changes that the permitting authority must make to the

program before the program can receive full approval. The EPA may grant

the program interim approval for a period of up to 2 years, and may not

renew the interim approval. The effect of this interim approval

provision in title V is to suspend for the period of interim approval

the provisions of section 502(d) of the Act which require application

of sanctions to a permitting authority and the imposition of a Federal

permitting program for failure to submit a fully approvable program.

The sanctions and Federal program would become immediately effective

upon expiration of interim approval if the interim approval has not

been replaced by a full approval by that expiration date. Part 70

currently allows EPA to grant interim approval only if the program

expressly meets certain minimum criteria (see Sec. 70.4(d)(3)(i-xi))

and substantially meets all other part 70 requirements (see memorandum

in the docket for today's action (A-93-50) from John Seitz to Air

Division Director, Regions I-X, August 2, 1993, ``Interim Title V

Program Approvals'').

B. Provisions for Public Participation

The EPA is concerned that one situation where neither full nor

interim approval may be available under the current part 70 is when

permitting authorities wish to use the minor permit modification

process of part 70 to incorporate the results of minor NSR permit

actions into the part 70 permit. Part 70 prohibits permitting

authorities from processing under minor permit modification procedures

modifications under any provision of title I of the Act (see

Sec. 70.7(e)(2)(i)(A)(5)) or case-by-case determinations, or changes

thereto, of an emission limitation or other standard (see

Sec. 70.7(e)(2)(i)(A)(3)). Minor NSR changes occur pursuant to State or

local programs approved under regulations promulgated under section

110(a)(2) of the Act. Since that section occurs in title I of the Act,

the argument has been made that minor NSR changes are consequently

title I modifications that may not be incorporated into the part 70

permit through minor permit modification procedures. For the reasons

stated in the notice proposing changes to part 70's permit revision

procedures elsewhere in today's Federal Register, EPA believes that the

better interpretation of ``title I modifications'' would include minor

NSR changes. The Agency solicits comment on the proper interpretation

of ``title I modifications.''

In addition, EPA considers to be a case-by-case determination any

requirement imposed on a source-specific basis where the permitting

authority has discretion in setting the requirement for that particular

source. This would include a situation where the permitting authority

imposes a technology-based control requirement on a source-specific

basis in a minor NSR permit. Consequently, the current rule's

limitation on case-by-case determinations would also limit the ability

to use minor permit modification procedures for minor NSR changes.

Pursuant to the interpretation of ``title I modifications'' set

forth above, processing minor NSR changes as minor permit modifications

would also violate the currently promulgated interim approval criteria

language of Sec. 70.4(d)(3)(iv). These criteria require adequate public

notice of and an opportunity for public comment and a hearing on draft

permits and revisions in a program with interim approval, except for

modifications qualifying for minor permit modification procedures under

Sec. 70.7(e). Since, under this interpretation, minor NSR changes would

not qualify for minor permit modification procedures,

Sec. 70.4(d)(3)(iv) would require a program granted interim approval to

provide public review and an opportunity for a hearing for minor NSR

changes when they are incorporated into a part 70 permit. However, if

permitting authorities incorporate minor NSR changes into part 70

permits through minor permit modification procedures, the changes would

not be subject to public review and an opportunity for a hearing. Thus,

under the interpretation of ``title I modifications'' discussed above,

part 70 would currently prohibit EPA from granting interim approval to

programs that process minor NSR actions as minor permit modifications.

The Agency is therefore proposing to revise part 70 to allow a program

to receive interim approval if the program allows minor NSR changes to

be processed as minor permit modifications.

C. Provisions for Incorporating Applicable Requirements

Section 502(b)(5)(A) of the Act and Sec. 70.6(a)(1) require a part

70 permit to contain provisions that assure compliance with all

applicable requirements. The definition of ``applicable requirements''

in Sec. 70.2 includes ``any term or condition of any preconstruction

permits issued pursuant to regulations approved or promulgated through

rulemaking under title I, including parts C or D, of the Act.'' Minor

NSR permit terms and conditions established through State or local

minor NSR programs approved by EPA are therefore clearly title I

applicable requirements and must be incorporated into part 70 permits.

If a State or local agency lacks the authority to issue permits that

include all applicable requirements, including those requirements

established through the State or local minor NSR program, the

underlying part 70 program would not be eligible for full approval.

Moreover, Sec. 70.4(d)(3)(ii) of the current part 70 requires that,

to be eligible for interim approval, a program must contain adequate

authority to issue permits that assure compliance with all of the

applicable requirements referred to in Sec. 70.4(c)(1), which includes

applicable requirements under title I of the Act. If a part 70 program

does not provide for incorporating into permits those requirements

established through the EPA-approved State or local minor NSR program,

Sec. 70.4(d)(3)(ii) prohibits EPA from granting that part 70 program

interim approval.

II. Discussion of Today's Action

A. Proposed Action to Revise Interim Approval Criteria

The EPA in today's notice is proposing to revise the interim

approval criteria in Sec. 70.4(d)(3) to allow programs with provisions

corresponding to one or more of the discrepancies with part 70

previously identified to be eligible for interim approval. The EPA

believes that the proposed revisions to the interim approval criteria

are reasonable. The Act, in section 502(g), provides for interim

approval on the basis of whether the submitted program would

``substantially meet'' the provisions of title V. The establishment of

``substantially meets'' criteria is within the discretion of EPA; it is

also within EPA's authority to revise the criteria if there is

appropriate justification for doing so. As subsequently discussed, EPA

believes the actions in today's proposal are appropriate to address

difficulties in program development that have occurred since

promulgation of part 70 and are within the meaning of section 502(g)

for judging whether programs substantially meet the requirements of

title V of the Act.

B. Proposed Revision to Public Participation Provisions

The EPA is today proposing to revise part 70 to allow interim

approval of a program that is designed to use the current minor permit

modification process to revise part 70 permits to incorporate the terms

and conditions of permits issued under approved State or local minor

NSR programs as well as conditions resulting from review of changes

triggering review under 40 CFR 61.15 (for purposes of National Emission

Standards for Hazardous Air Pollutants). If an operating permits

program allows minor NSR or Sec. 61.15 changes to go through the minor

permit modification process, then it could in many cases violate the

section 70.4(d)(3)(iv) requirement for public participation on those

actions since, under the more inclusive interpretation of ``title I

modifications'' discussed earlier in this notice, they would not

qualify for minor permit modification procedures. A number of programs

that have been submitted to EPA for approval contain this mechanism and

would, under this interpretation of the current part 70, be ineligible

for either full or interim approval.

As previously discussed under the background portion of this

preamble, the provision in part 70 that bears directly upon interim

approval of programs that process minor NSR changes as minor permit

modifications is Sec. 70.4(d)(3)(iv). There are no other provisions in

section 70.4(d) that would prevent interim approval of operating

permits programs as long as EPA determines that otherwise the program

substantially meets the requirements of part 70.

The specific revision to part 70 being proposed would modify the

interim approval criteria provision in Sec. 70.4(d)(3)(iv) to exclude

from the requirement for public notice and an opportunity for public

comment and a hearing those changes that would not be processed under

minor permit modification procedures because they are changes subject

to minor NSR or Sec. 61.15 that implicate Secs. 70.7(e)(2)(i)(3) and/or

(5). The criteria for interim approval, as revised, would thus require

public participation for all permit actions except for: (1) those that

qualify as minor permit modifications (as is now stated in

Sec. 70.4(d)(3)(iv)) and (2) those that incorporate changes subject to

minor NSR or subject to the definition of modification in Sec. 61.15

which are processed as minor permit modifications. This proposed change

would allow programs that process minor NSR or Sec. 61.15 changes as

minor permit modifications to receive interim approval even under the

more inclusive interpretation of ``title I modifications'' discussed

above, thereby allowing the permitting authority time to correct any

deficiency in lieu of EPA disapproving those programs.

The EPA acknowledges that the criteria for ``substantially meets''

with respect to requirements for public participation and the

interaction with the phrase ``modification under any provision of title

I of the Act'' may have been confusing to State and local permitting

authorities. The EPA believes the better interpretation of the term

``title I modification'' would include any change processed through

either major or minor NSR procedures as well as Sec. 61.15. In the May

10, 1991, Federal Register notice proposing the part 70 regulations (56

FR 21712), footnotes 5 and 6 of the preamble (56 FR 21746) address the

phrase ``title I modification.'' Footnote 6 does not clearly state that

any change processed through the minor NSR procedures would be

considered a title I modification, and footnote 5 refers to footnote 6

for what constitutes a title I modification. As a result, State or

local agencies may have interpreted the term ``title I modification''

to not include minor NSR changes. The Agency also realizes that

permitting authorities may have believed that incorporation of minor

NSR changes into part 70 permits did not constitute establishing case-

by-case emission limitations within the meaning of

Sec. 70.7(e)(2)(i)(A)(3). Permitting authorities could have interpreted

this provision to only apply to case-by-case determinations made during

the permitting process rather than to those having been made through

other mechanisms prior to issuance of the operating permit.

Another approach that could allow interim approval would be to

interpret the public participation provisions of minor NSR programs to

suffice for meeting the public participation provisions of

Sec. 70.4(d)(3)(iv). However, several operating permit programs that

have been submitted to EPA for approval do not now guarantee adequate

public participation in their minor NSR programs. This approach would

thus not suffice to resolve the problem for all programs.

The EPA does not wish to initially disapprove operating permits

programs that allow minor NSR changes to be processed under minor

permit modification procedures in view of the confusion that has

surrounded the interpretation of title I modifications and the fact

that EPA is taking comment on that interpretation in this proposal.

Such disapprovals would have neither programmatic nor environmental

benefits. For that reason EPA is proposing to change the interim

approval criteria and intends to propose granting interim approval to

State or local programs that allow minor NSR changes to be processed as

minor permit modifications.

C. Proposed Revisions to Applicable Requirements Provisions

The EPA is aware of at least one part 70 program (submitted by the

State of Texas) that currently defines ``applicable requirements'' to

exclude requirements established exclusively through an EPA-approved

State or local minor NSR program. Along with its part 70 program, Texas

submitted a written demonstration of program sufficiency to EPA in

which the State cited what it believes are compelling reasons

supporting its decision not to include minor NSR requirements as

applicable requirements. Nevertheless, EPA reads Secs. 70.2 and

70.6(a)(1) to clearly and unequivocally require that minor NSR

requirements are applicable requirements which must be included in part

70 permits. Therefore, EPA has evaluated Texas's demonstration only in

terms of arguments which could at best support a potential interim

approval for Texas, not in terms of arguments that the Texas program

would, as presently constituted, be eligible for full approval.

Texas has argued, for example, that the State's existing minor NSR

program is so stringent as to make the integration of minor NSR permits

into part 70 permits infeasible, and, from the standpoint of

environmental protection, unnecessary. The EPA acknowledges that

Texas's minor NSR program is a very stringent one. The Texas program

requires authorization prior to the construction of any new facility or

the modification of an existing facility. The term ``facility'' is

broadly defined to include any ``point of origin'' of air contaminants,

so there is no opportunity for a source to ``net out'' of minor NSR.

Moreover, Texas mandates best available control technology (BACT) as

the emission control technology which applies to all minor NSR changes.

Texas further subjects each minor NSR permit and permit amendment to a

health effects evaluation which considers the cumulative effect of the

proposed action, together with other air contaminant sources, on

ambient air quality. Finally, where the Texas minor NSR program

provides for public notice of a permit action, the program provides

citizens the right to request a full evidentiary hearing on the action

(as opposed to the more limited opportunities for public participation

typically provided by State or local agencies under NSR programs).

Similarly, Texas has pointed to the exceptionally large number of

part 70 sources which are located in the State and which are candidates

for minor NSR. Texas estimates that it has over 3,000 part 70 sources,

including the nation's largest concentration of chemical manufacturing

and petroleum refining facilities. Many of these sources have large

numbers of emission units, making part 70 permitting difficult and

time-consuming. In addition to this part 70 responsibility, the State

anticipates that it will have to process between 8,000 and 10,000 minor

NSR actions each year. While Texas's burden of processing part 70

applications will be heavy in any event, Texas contends that the added

burden of integrating minor NSR into part 70 permits will completely

overwhelm the State's processing system in the initial years of program

implementation. Texas has informed EPA that it is currently developing

a computerized information management system which is designed to ease

the task of integrating minor NSR and part 70 permitting requirements.

This system is not yet operational, however, and is not expected to be

available for database integration for several months.

Finally, Texas argues that because its minor NSR permits would be

cross-referenced within part 70 permits so that the public and EPA

could easily locate and review the minor NSR applicable requirements,

inclusion of the minor NSR requirements themselves is unnecessary.

While EPA is not persuaded that merely cross-referencing minor NSR

permits in a part 70 permit is in any way equivalent to setting forth

in permit terms minor NSR requirements themselves as applicable

requirements, EPA believes that this argument militates in favor of

potentially granting interim approval to the Texas program.

On the basis of the type of showing of compelling reasons described

above, EPA believes that a State or local permitting authority with

minor NSR/part 70 integration difficulties such as Texas should be

given the opportunity, if otherwise appropriate under the Sec. 70.4(d)

criteria, to receive interim approval and to correct its program

deficiency during the interim period. Therefore, EPA is proposing today

to revise its interim approval criteria to allow for interim approval

of programs that do not currently have authority to assure compliance

with applicable requirements that are developed exclusively through an

EPA-approved minor NSR program. The proposed revision also provides

that each part 70 permit issued by such a program during the interim

approval period must state that applicable minor NSR requirements are

not included in that part 70 permit, and shall cross-reference any

excluded minor NSR permits so that citizens may access and review those

permits. Moreover, minor NSR requirements excluded from part 70 permits

would not be eligible for the permit shield under Sec. 70.6(f). The EPA

wishes to emphasize that it is only proposing a revision to part 70 to

make possible the evaluation of a program like that submitted by Texas.

The EPA takes no position at this time as to the approvability of the

State of Texas's request for interim approval. The EPA will evaluate

the adequacy of Texas's demonstration of compelling reasons and whether

it otherwise ``substantially meets'' part 70 as part of the Agency's

ongoing review of the Texas part 70 program. Comment is solicited on

whether this interim relief is appropriate in situations other than

that described for the Texas program.

The EPA also wishes to make it clear that excluding minor NSR

requirements from part 70 permits does not fulfill the objectives of

title V and the Act. First, a part 70 permit that does not contain

minor NSR requirements is not an accurate compendium of the Act

requirements applicable to the permitted source. Second, as a result of

exclusion from the part 70 permit, minor NSR requirements may not be

subject to the same issuance and revision procedures, or include the

same compliance terms, as would be the case if they were included in

the part 70 permit.

Texas has argued, however, that it will be able to effectively

implement its approved minor NSR program during the interim period

without specifically including the details of the minor NSR permits

issued under that program in issued part 70 permits. The minor NSR

requirements are for the most part applied on a source-specific basis,

and are federally enforceable independent of their inclusion in a part

70 permit. In addition, because Texas has also requested interim

approval as a source category limited program, which would provide for

issuance of part 70 permits over a 5-year period, this exclusion should

affect significantly less than half the permits that will be issued in

Texas during the (at most) 2-year period in which the interim approval

would be in effect. The EPA notes that as a condition of being granted

interim approval, Texas would have to submit a corrective program at

least 6 months prior to the end of the interim approval period, and

permits and permit revisions issued after EPA approves this corrective

submittal would have to contain the requirements of minor NSR permits

issued after that time. Moreover, minor NSR requirements excluded from

part 70 permits would not be eligible for the permit shield under

Sec. 70.6(f) and the excluded requirements would be cross-referenced in

the part 70 permit as discussed above.

The EPA believes that these considerations would considerably

mitigate the consequences of excluding minor NSR from permits issued

during the interim period. The EPA will consider these and similar

factors in determining whether programs from Texas or other permitting

authorities meeting the revised criteria otherwise ``substantially

meet'' the requirements of part 70. Two specific factors EPA will

consider in evaluating a request for interim approval under the revised

criteria are (1) whether a program's exclusion of minor NSR as an

applicable requirement will diminish the effectiveness of the State or

local agency's minor NSR program during the interim period, and (2)

whether the State or local permitting authority had previously

submitted a part 70 program to EPA that included minor NSR as an

applicable requirement. The EPA believes that State and local

permitting authorities should be discouraged from revising their part

70 programs to exclude minor NSR as an applicable requirement,

especially when this revision would necessitate EPA's interim approval

(at best) of a program that would otherwise qualify for full approval.

The EPA also emphasizes that if an interim approval is later granted to

an operating permits program under the revised criteria, EPA expects

that the permitting authority will address and fully correct its

deficient authority no later than 6 months before expiration of any

interim approval. Full approval of such a program would not be possible

at the end of the interim approval period if the problem with the

applicable requirements authority were not corrected.

If and when EPA grants full approval to a program that had received

interim approval under the revised criteria, each part 70 permit issued

during the interim period that excluded minor NSR requirements would

have to be reopened to incorporate the excluded requirements. Moreover,

the terms and conditions of minor NSR permits issued or revised after

the end of the interim period would have to be included as applicable

requirements in part 70 permits, even if the part 70 permit was

originally issued during the interim approval period.

D. Proposed Revision Regarding Effectiveness of Permits

The EPA proposes to clarify the description in Sec. 70.4(d)(2)

concerning the effect of EPA's interim approval of a part 70 program to

explicitly state that permits issued under a program granted interim

approval are fully effective for all title V purposes. Because

permitting authorities operating under interim approval are able to

issue fully effective part 70 permits to sources, EPA considers those

permitting authorities eligible to charge all required permit fees to

sources in accordance with Sec. 70.9.

III. Impacts of Proposal

Consideration of anticipated impacts supports today's proposed

revisions to the interim approval criteria. The impacts of not

providing these opportunities could include disapproval of several

operating permits programs, imposition of sanctions on permitting

authorities, the promulgation of Federal programs, delay in the

effective date of permitting programs, and undue disruption in

permitting authority efforts to conform to part 70. Conversely, the EPA

does not feel there are significant adverse effects of the actions

proposed in today's notice.

The interim approval period during which a minor NSR change could

be processed under minor permit modification procedures or would not be

included in the permit as an applicable requirement would last for no

more than the first 2 years of the permit issuance transition period.

This period could even be less than 2 years in that program

modifications needed to qualify for full program approval must be fully

adopted by the permitting authority and submitted to EPA no later that

6 months prior to the end of the interim approval period.

Permit applications for all sources subject to the program are due

during the first year, and one-third of the permits must be issued

during each of the 3 years of the transition period. These factors will

reduce the number of permits being issued and also the number of permit

modifications occurring during this transition period when permits are

initially being issued; therefore, the effect of the changes being

proposed today will be less significant. Up to one-half of the permits

may not even be issued during the interim approval period. In addition,

the permitting actions covered by today's proposal would only be those

that are first processed through EPA-approved minor NSR programs. These

factors limit any programmatically adverse impacts of today's proposed

revisions to the interim approval criteria regarding minor NSR changes,

while at the same time ensuring that permitting authorities will not be

delayed in administering and implementing their programs and issuing

federally-enforceable operating permits.

With respect to proposed part 70 revisions concerning public

participation, EPA is proposing elsewhere in today's Federal Register

to take regulatory action to revise the part 70 permit revision

process. State and local programs will be required generally to submit

revised programs to meet the new requirements no later than 2 years

after EPA promulgates the revisions to part 70. There appears,

therefore, to be little to gain by forcing a State or local agency

whose program does not conform to the existing interim approval

requirements regarding public participation to adopt program revisions

that will shortly thereafter have to again be revised to conform to

revised permit revision provisions.

In light of the proposal to revise the permit revision provisions

of part 70, the disruption and difficulties that would be caused by

disapproving submitted State and local programs, the short duration and

apparent minimal impact of today's action, and the apparent widespread

misunderstanding of the requirements of the current rule, the EPA

believes these proposed revisions to interim approval criteria of part

70 are reasonable and necessary.

IV. Action on Submitted Programs

The EPA realizes that there are also significant transitional

issues to address in implementing these changes. Many of the current

part 70 program submittals have been evaluated against the current part

70 requirements and EPA has proposed an action as to their

approvability. In these notices, EPA has proposed interim approval of

those submitted programs with the described minor permit modification

problem upon the condition that EPA revise the interim approval

criteria to address the problem. While these notices may assume a

positive result to today's proposal, they avoid the need to

subsequently re-propose interim approval if today's proposed relief

were promulgated. Implementation of part 70 would be unduly delayed by

the need for a second rulemaking process. If today's proposal is not

promulgated, EPA may subsequently be required to take alternative

action.

The EPA can grant an interim approval for a period of up to 2 years

and the interim approval cannot be renewed. The EPA would indicate in

the interim approval notice the discrepancy of the program with full

approval requirements of part 70 and would indicate that the program

would have to be revised to conform with part 70 within the interim

approval period for full program approval subsequently to be granted.

Note that if part 70 is revised before the end of the period granted

for interim approval, the program granted interim approval would most

likely be revised to meet the revised part 70.

Permitting authorities would have to complete their program

revision and submit revised programs to EPA at least 6 months prior to

expiration of the interim approval to allow EPA time to process the

change and grant the program full approval before the expiration of the

interim approval. If the permitting authority fails to take proper

action to revise its program within the timeframe allowed under interim

approval, the interim approval will expire and the provisions of

section 502(d) of the Act regarding sanctions and EPA imposition of a

Federal operating permits program would take effect.

The revisions to the interim approval criteria in part 70 being

proposed today would allow permitting authorities to proceed with their

programs expeditiously, rather than requiring EPA to disapprove the

programs and begin promulgation of Federal programs. The EPA solicits

comment on this approach and how best to address the concerns

associated with its implementation.

VI. Administrative Requirements

A. Public Hearing

No public hearing will be held to discuss the proposed regulatory

revisions unless a hearing is requested in writing and sufficient

reason for a hearing is included in the written request. If a public

hearing is held, it will take place on the last day of the public

comment period. Persons wishing to attend a hearing, if held, should

call (919) 541-5586 to determine if a hearing will be held and to

obtain the time and location. Persons wishing to request a public

hearing must submit a written request to EPA during the public comment

period at the address given in the ADDRESSES section of this preamble.

B. Docket

The docket for this regulatory action is A-93-50. 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 (except for interagency

review materials) (307(d)(7)(A)). The docket is available for public

inspection at EPA's Air Docket, which is listed under the ADDRESSES

section of this notice.

C. Office of Management and Budget (OMB) Review

Under Executive Order 12866 (E.O. 12866) (58 FR 51735, October 4,

1993), section 4(c), EPA must judge whether a regulation is a

significant regulatory action which would precipitate the requirement

to prepare an assessment of the potential costs and benefits (referred

to as a Regulatory Impact Analysis (RIA)) of the regulatory action.

Sections 3(f)(1-4) of E.O. 12866 define ``significant'' regulatory

actions as those that may:

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

adversely affect in a material way the economy, 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

E.O. 12866.

Today's proposed revisions to part 70 would simply remove

obstructions to the implementation of part 70 and State and local

operating permits programs. However, the Agency has determined that

this rule is a ``significant'' regulatory action under the terms of

E.O. 12866, sections 3(f)(1-4), since it is closely linked to the

notice published elsewhere in today's Federal Register proposing

regulatory revisions involving several novel legal and policy issues.

The EPA has submitted this action to OMB for review. Changes made in

response to OMB suggestions or recommendations will be documented in

the public record.

D. Regulatory Flexibility Act Compliance

Under the Regulatory Flexibility Act, whenever an Agency publishes

any proposed or final rule in the Federal Register, it must prepare a

Regulatory Flexibility Analysis (RFA) that describes the impact of the

rule on small entities (i.e., small businesses, organizations, and

governmental jurisdictions). That analysis is not necessary, however,

if an Agency's Administrator certifies that the rule will not have a

significant economic impact on a substantial number of small entities.

The EPA has established guidelines for determining whether an RFA

is required to accompany a rulemaking package. The guidelines state the

criteria for determining when the number of affected small entities is

``substantial'' and whether there is a significant impact. The

determination of significant impact for small businesses essentially

depends upon compliance costs, production costs, and predicted

closures. For small governments, the determination of significant

impact depends upon compliance costs, operating costs, and

recordkeeping costs.

A regulatory flexibility screening analysis was prepared to examine

the potential for significant adverse impacts on small entities

associated with specific permitting provisions of the current part 70

and is in the docket for the part 70 rulemaking action (Docket No. A-

90-33). The effect of today's proposal allows permitting authorities to

proceed with implementation of their programs and would not create any

additional impacts on small businesses.

E. Paperwork Reduction Act

The information collection requirements (ICR) for the part 70

regulations were submitted for approval to OMB under the Paperwork

Reduction Act, 44 U.S.C. 3501 et seq. An ICR document was prepared by

EPA in association with the promulgation of part 70 and a copy may be

obtained from Sandy Farmer, Information Policy Branch (mail code 2136),

U.S. Environmental Protection Agency, 401 M Street, S.W., Washington,

D.C. 20460, (202) 260-2740.

Today's proposed regulatory revisions do not significantly alter

the estimates in the original ICR.

List of Subjects in 40 CFR Part 70

Environmental protection, Air pollution control, Prevention of

significant deterioration, New source review, Fugitive emissions,

Particulate matter, Volatile organic compounds, Nitrogen dioxide,

Carbon monoxide, Hydrocarbons, Lead, Operating permits.

Dated: July 8, 1994.

Carol M. Browner,

Administrator.

For the reasons set out in the preamble, part 70 of title 40,

chapter I of the Code of Federal Regulations is proposed to be amended

as follows:

PART 70--[AMENDED]

1. The authority citation for part 70 continues to read as follows:

Authority: 42 U.S.C. 7401, et seq.

2. Section 70.4 is amended by revising paragraphs (d)(2), (d)(3)

introductory text, (d)(3)(ii), and (d)(3)(iv) to read as follows:

Sec. 70.4 State program submittals and transition.

(d) * * *

(2) Interim approval shall expire on a date set by the

Administrator (but not later than 2 years after such approval), and may

not be renewed. Sources shall become subject to the program according

to the schedule approved in the State program. Permits issued under an

interim approved program shall be fully effective and expire at the end

of their fixed term, unless renewed under a part 70 program.

(3) The EPA may grant interim approval to any program if it meets

each of the following minimum requirements and otherwise substantially

meets the requirements of this part:

* * * * *

(ii) Applicable requirements. The program must provide for adequate

authority to issue permits that assure compliance with the requirements

of paragraph (c)(1) of this section for those major sources covered by

the program. Notwithstanding the preceding sentence, where a State or

local permitting authority lacks adequate authority to issue or revise

permits that assure compliance with applicable requirements established

exclusively through an EPA-approved minor NSR program, EPA may grant

interim approval to the program upon a showing by the permitting

authority of compelling reasons which support the interim approval and

that the program otherwise substantially meets the requirements of this

part. Any part 70 permit issued during this interim period that does

not incorporate minor NSR requirements shall note this fact in the

permit, and shall indicate how citizens may obtain access to excluded

minor NSR permits.

* * * * *

(iv) Public participation. The program must provide for adequate

public notice of and an opportunity for public participation on draft

permits, reopenings for cause, and revisions as required by Sec. 70.7

of this part, except for:

(A) Modifications qualifying for minor permit modification

procedures under Sec. 70.7(e) of this part as promulgated July 21,

1992; and

(B) Permit revisions to incorporate changes subject to minor NSR or

Sec. 61.15 of part 61 of this chapter processed as minor permit

modifications under Sec. 70.7(e) of this part as promulgated July 21,

1992.

* * * * *

[FR Doc. 94-21254 Filed 8-26-94; 8:45 am]

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