Clean Air Act Proposed Interim Approval Of Operating Permits Program; Illinois

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[IL001; FRL-5081-9]

Clean Air Act Proposed Interim Approval Of Operating Permits

Program; Illinois

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 Illinois for the purpose of complying with Federal

requirements which mandate that States develop, and submit to EPA,

programs for issuing operating permits to all major stationary sources,

and to certain other sources.

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

October 31, 1994.

ADDRESSES: Comments should be addressed to Jennifer Drury-Buzecky at

the Region V address.

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 location: EPA

Region 5, 77 West Jackson Boulevard, AR-18J, Chicago, Illinois, 60604.

Please contact Jennifer Drury-Buzecky at (312) 886-3194 to arrange a

time if inspection of the submittal is desired.

FOR FURTHER INFORMATION CONTACT: Jennifer Drury-Buzecky, AR-18J, 77

West Jackson Boulevard, Chicago, Illinois, 60604, (312) 886-3194.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

As required under title V of the Clean Air Act (``the Act'') as

amended (1990), 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 State operating permits programs (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 EPA, programs for issuing these operating permits to all

major stationary sources and to certain other sources.

The Act requires that States develop and submit these programs to

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

each program within 1 year after receiving the submittal. 40 CFR

70.4(e)(2), however, allows the Administrator to extend the review

period of a State's submittal if the State's submission is materially

altered during the one-year review period. This additional review

period may not extend beyond one year following receipt of the revised

submission. EPA received material changes to Illinois' submission on

April 18, 1994, and July 18, 1994. In addition, the State requested on

May 16, 1994, that EPA include the State's insignificant activities

regulations, currently undergoing rulemaking at the state level, in

EPA's final rulemaking on the State's submittal. 35 Illinois

Administrative Code 201 (35 IAC 201). Because these material changes

stopped EPA's final review clock, a final EPA action on the State's

submittal may not occur by November 15, 1994. EPA will act

expeditiously to promulgate a final notice on the State's revised

submission after the publication of this proposal and formal adoption

of all State rules.

The EPA's program review occurs pursuant to section 502 of the Act

and the part 70 regulations, which together outline criteria for

approval or disapproval. Where a program substantially, but not fully,

meets the requirements of part 70, EPA may grant the program interim

approval for a period of up to 2 years. If EPA has not fully approved a

program by 2 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

The EPA is proposing to grant interim approval to the operating

permits program submitted by Illinois on November 15, 1993. While

Illinois' program substantially meets the requirements of 40 CFR part

70, certain deficiencies must be corrected in the State's submittal

before EPA can fully approve the State's submittal. This document will

outline the corrections necessary for full approval.

For more detailed information on the analysis of the State's

submission, please refer to the part 70 Operating Permits Program

Review Checklist and technical support document accompanying this

approval.

1. Support Materials

A letter from Jim Edgar, Governor of the State of Illinois, to

Administrator Carol Browner, accompanying the State's submittal, names

the Illinois Environmental Protection Agency (IEPA) as the state agency

responsible for the administration of Illinois' title V operating

permit program throughout the entire state. Since the State entitles

its title V operating permit program the ``Clean Air Act Permit Program

(CAAPP)'', CAAPP will be used throughout this document when referencing

the State's program.

Also included in the State's submittal is a narrative description

of the CAAPP summarizing how the State will meet the requirements of 40

CFR part 70 and a legal opinion fromRoland W. Burris, Attorney General

of the State of Illinois, certifying that the legal authority exists

for the State to administer and enforce the title V program. According

to the narrative and a specific request from the State referenced

above, the State intends to develop future regulations governing

insignificant activities. The State anticipates that these regulations

will be finalized by the time of EPA's final action on this submittal.

The narrative also describes the existing federally enforceable state

operating permit program (FESOP), previously approved by EPA, that the

State will utilize to allow sources to limit their potential to emit

through federally enforceable operating restrictions to avoid title V

requirements.

The Illinois CAAPP submittal contains all the elements required by

40 CFR 70.4(b). Although the State's submittal does not include an

Implementation Agreement, the State and EPA will soon develop an

implementation agreement that accounts for the implementation issues

unique to Illinois' CAAPP.

The majority of the State's program is found in section 39.5 of the

Illinois Environmental Protection Act. 415 ILCS 5/39.5. Additional

regulations are found in 35 IAC 270, 105, 106, 252, 253, and draft

versions of both 201 and 211.

2. Regulations and Program Implementation

a. Applicability

The Illinois program meets the requirements of 40 CFR 70.2 and 70.3

for applicability.

b. Permit Applications

The Illinois program substantially meets the requirements of 40 CFR

70.5 for permit applications.

One permit application issue will require a legislative amendment

before EPA can fully approve the State's program. The current State

legislative provision concerning source certification of applications,

415 ILCS 5/39.5(5)(e), does not require the responsible official

certifying a document to make a ``reasonable inquiry'' or that the

statement be based upon ``information and belief'' according to 40 CFR

70.5(d) and 70.6(c)(1). The State must amend this provision in its

legislation to ensure that certifications by responsible officials

comply with all Federal requirements, namely that the official has made

a reasonable inquiry and that the certification is based upon

information and belief. EPA is, therefore, proposing interim approval

until this deficiency is corrected.

Another potential deficiency in the State's program concerns

insignificant activities. Illinois is currently developing regulations

for insignificant activities in 35 IAC 201 and 211. The regulations

propose insignificant emission limits for hazardous air pollutants

(HAP), specific categories of insignificant activities or emission

levels of all regulated pollutants, and provisions to allow sources to

propose their own insignificant activities.

Insignificant activity thresholds which are considered to be

acceptable by EPA for Illinois' program would fall in the range of 1-2

tons per year for criteria pollutants and the de minimis levels

established under 112(g) or lower for HAPs. These insignificance levels

are appropriate for the State's program because of the 25 ton per year

major source threshold level established in the State's severe ozone

nonattainment areas, and because of the overall major source threshold

level for HAPs established at 10 tons per year of one HAP and 25 tons

per year of any combination of HAPs. Illinois' insignificant activity

regulations establish insignificance levels of no more than 1 lb/hr of

any non-HAP (approximately 4 tons per year) and no more than .1 lb/hr

of any HAP (approximately .4 tons per year) per emission unit. Because

Illinois' insignificant activity regulations fail to comply with EPA's

notion of acceptable thresholds, EPA could only propose interim

approval for the State's 201 and 211 regulations. If EPA's concerns are

addressed in the State's final regulations before final action on this

notice, then EPA can fully approve the State's insignificant

activities. Alternatively, if the State does not address EPA's concerns

before final action on this notice, then EPA's final action will

include an interim approval on this issue.

c. Permit Issuance, Renewal, Reopenings and Revisions

The Illinois program meets the requirements of 40 CFR 70.7(h) for

public participation and 40 CFR 70.7(e)(2) minor modifications. Two

interim approval issues exist, however, with respect to the State's

definition of administrative permit amendment. 415 ILCS 5/

39.5(13)(c)(vi) allows incorporation of revised limitations or other

requirements resulting from the application of an approved economic

incentives rule, a marketable permits rule or generic emissions trading

rule into a CAAPP permit through the administrative amendment

procedure. Since 40 CFR 70.7(d) does not allow the use of an

administrative permit amendment to accomplish incorporation of

emissions trades into a part 70 permit, the State's definition of

administrative amendment is one basis for the EPA's proposal to grant

interim approval of the State's program. The State must amend its

legislation to require the use of the significant modification

procedure to incorporate emission trades into a CAAPP permit before the

EPA can fully approve the State's definition of administrative

amendment.

The second interim approval issue is found in 415 ILCS 5/

39.5(13)(c)(v). The State's program allows incorporation of

requirements from preconstruction review permits authorized under an

EPA-approved preconstruction permit program into a CAAPP permit through

the administrative amendment procedure, provided that the permit meets

procedural and compliance requirements substantially equivalent to

those in the State's CAAPP permit issuance process (emphasis added).

The EPA encourages the use of the administrative amendment procedure to

incorporate preconstruction review permits into part 70 permits.

Nevertheless, 40 CFR 70.7(d)(1)(v) allows such incorporation only when

the State's preconstruction review program meets procedural and

compliance requirements substantially equivalent to the requirements of

40 CFR 70.7 and 70.8 that would be applicable to the change if it were

subject to review as a permit modification, and compliance requirements

substantially equivalent to those contained in 40 CFR 70.6. The EPA

interprets 40 CFR part 70 to require that the State's part 70

regulations or preconstruction permit program detail the actual

procedural and compliance requirements necessary to incorporate

preconstruction permits into part 70 permits.

For full approval of the State's program, the State would need to

develop regulations detailing the actual procedural and compliance

requirements necessary for incorporation of preconstruction permits

into part 70 permits. These regulations would need to supplement the

State's title V submittal or be submitted as a revision to the State's

preconstruction permit program state implementation plan.

d. Permit Content

Another major component of the State's program concerns the

contents of a CAAPP permit. The State's CAAPP substantially meets the

requirements of 40 CFR 70.6, including the requirements for operational

flexibility. A CAAPP permit will incorporate applicable requirements of

existing State Implementation Plans (SIP), as well as any future

applicable requirements promulgated by EPA. Legislative authority

exists in 415 ILCS 5/39.5(11) to develop general permits covering

numerous similar sources, except for sources subject to the Acid Rain

Program. These general permits are targeted for future development.

One issue of EPA concern with State programs is the ability of a

part 70 source to obtain a waiver from any applicable requirement. The

Illinois Pollution Control Board (IPCB) has the authority to issue a

variance from requirements imposed by State law. 415 ILCS 5/35-38,

previously approved into the State's SIP for non-part 70 sources,

allows the IPCB discretion to grant relief from compliance with State

rules and regulations. The EPA regards this provision as wholly

external to the program submitted for approval under part 70, and

consequently is proposing to take no action on this provision of State

law. The EPA has no authority to approve provisions of State law, such

as the variance provisions referred to, which are inconsistent with the

CAA. The EPA does not recognize the ability of a permitting authority

or other state entity to grant relief from the duty to comply with the

terms of a federally enforceable part 70 permit, except where such

relief is granted through procedures allowed by part 70. For example,

40 CFR 70.6(g) defines the circumstances under which an affirmative

defense can be raised when an action is brought against a source for

noncompliance with a permit condition. The EPA reserves the right to

enforce the terms of the part 70 permit where the permitting authority

or other state entity purports to grant relief from the duty to comply

with a part 70 permit in a manner inconsistent with part 70 procedures.

415 ILCS 5/39.5(5)(s) and 35 IAC 270.408 of the State's submittal

incorporate previously approved SIP provisions into the CAAPP program

(35 IAC 201.261 through 201.265) which allow an owner or operator of a

CAAPP source to include within its CAAPP application a request for

permission to operate during a startup, malfunction, or breakdown.

These provisions appear to allow sources to exceed emission limits and

standards of the State's SIP, but are not applicable to any other

requirements of a title V permit. Since sources that request these

exceedances must request them in their CAAPP applications, EPA will

have the opportunity to review and comment on these different emission

limits just as it would comment on any other permit provision. Since

these provisions were previously approved into Illinois' SIP, the

incorporation of these provisions into Illinois' part 70 regulations is

not problematic for the approval of the State's program as long as

these provisions never apply to other Federal requirements in a title V

permit and do not diminish the State's authority to assure the source's

compliance with all applicable requirements.

Another component of permit content is the length of time in which

a source must notify the permitting authority to report a deviation

from a permit condition. Part 70 of the operating permits regulations

requires prompt reporting of deviations from the permit requirements.

40 CFR 70.6(a)(3)(iii)(B) requires the permitting authority to define

prompt in relation to the degree and type of deviation likely to occur

and the applicable requirements. Although the permit program

regulations should define prompt for purposes of administrative

efficiency and clarity, an acceptable alternative is to define prompt

in each individual permit. The EPA believes that prompt should

generally be defined as requiring reporting within two to ten days of

the deviation. Two to ten days is sufficient time in most cases to

protect public health and safety as well as to provide a forewarning of

potential problems. For sources with a low level of excess emissions, a

longer time period may be acceptable. Prompt reporting, however, must

be more frequent than the semiannual reporting requirement, given this

is a distinct reporting obligation under 40 CFR 70.6(a)(3)(iii)(A).

Illinois addresses the issue of prompt reporting in 415 ILCS 5/

39.5(7)(f)(ii) of its CAAPP legislation. Because Illinois did not

actually define ``prompt,'' EPA may veto permits that do not contain

sufficiently prompt reporting requirements for deviations.

e. Enforcement

The Illinois program substantially meets the requirements of 40 CFR

70.11 with regard to enforcement authority. One issue, however,

requires a change in existing State legislation to bring the State's

enforcement authority completely in accord with the requirements of

part 70. 415 ILCS 5/44(j)(4)(D) of the Illinois Environmental

Protection Act prohibits the knowing tampering of any monitoring device

or record. 40 CFR 70.11(a)(3)(iii), however, prohibits the knowing

tampering of any monitoring device or method. The State must amend its

legislative provision to include a prohibition against knowing

tampering of a monitoring method. The EPA, therefore, proposes interim

approval of the State's program.

Another issue concerning title V enforcement authority is the

ability of a source to request an alternative emission limit equivalent

to that stated in a SIP. 415 ILCS 5/39.5(7)(q) allows a source to

demonstrate in its CAAPP application that an alternative emission limit

would be equivalent to that contained in the applicable IPCB

regulations. The State submitted revised regulations that restricted

the use of alternative emission limits in 35 IAC 270.401(e) to the

situation where the applicable EPA-approved SIP allows for such

determination. Since this revision to the State regulations adequately

addresses EPA's concerns regarding the use of alternative equivalent

emission limits, the State may utilize equivalent alternative emission

limits in its CAAPP when the underlying SIP provision allows for such

determination.

3. Permit Fee Demonstration

415 ILCS 5/39.5(18) of the State's legislation provides for the

collection of fees in the amount of $13.50 per ton of allowable

emissions. Sources allowed to emit less than 100 tons per year in the

aggregate of all regulated air pollutants shall pay a flat fee of $1000

and no source shall be required to pay a fee in excess of $100,000.

Since the State is not charging the presumptive minimum, 40 CFR 70.9

requires that the State collect fees sufficient to cover the permit

program costs. Based upon the State's fee demonstration, EPA believes

that the amount of fee revenue collected by the State is sufficient to

run the State's program. Collection of fees based upon allowable

emissions results in the collection of fees from tons of pollution not

actually emitted. Monies collected from the program will be deposited

in a special fund in the State Treasury known as the CAA Permit Fund

and a board appointed by the State legislature will evaluate the

State's fee structure to ensure that future collection of funds will be

sufficient to run the program.

On July 18, 1994, the State submitted additional information

clarifying its detailed fee demonstration. As a result of this

additional information, the EPA believes the State's detailed fee

demonstration meets the requirements of 40 CFR part 70. Please refer to

the technical support document and letter dated June 21, 1994, from

IEPA, included with the docket on this approval, for more information

regarding the State's fee demonstration.

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

a. Authority and/or Commitments for Section 112 Implementation

Illinois has demonstrated in its title V program submittal adequate

legal authority to implement and enforce all section 112 requirements

through the title V permit. This legal authority is contained in

Illinois' enabling legislation and in regulatory provisions defining

``applicable requirements'' and stating that the permit must

incorporate all applicable requirements. EPA has determined that this

legal authority is sufficient to allow Illinois to issue permits that

assure compliance with all section 112 requirements.

The EPA is interpreting the above legal authority to mean that

Illinois is able to carry out all section 112 activities. For further

rationale on this interpretation, please refer to the Technical Support

Document accompanying this rulemaking and the April 13, 1993, guidance

memorandum titled ``Title V Program Approval Criteria for section 112

activities,'' signed by John Seitz.

b. Implementation of 112(g) Upon Program Approval

As a condition of approval of the part 70 program, Illinois is

required to implement section 112(g) of the Act from the date of

approval of the part 70 program. Imposition of case-by-case

determinations of MACT or offsets under section 112(g) will require the

use of a mechanism for establishing federally enforceable restrictions

on a source-specific basis. The EPA is proposing to approve Illinois'

preconstruction permitting program, found in 35 IAC 201-203, under the

authority of title V and part 70 solely for the purpose of implementing

section 112(g) during the transition period between title V approval

and adoption of a State rule implementing EPA's section 112(g)

regulations. EPA believes this approval is necessary so that Illinois

has a mechanism in place to establish federally enforceable

restrictions for section 112(g) purposes from the date of part 70

approval. Although section 112(l) generally provides authority for

approval of State air toxics programs, title V and section 112(g)

provide authority for this limited approval because of the direct

linkage between implementation of section 112(g) and title V. The scope

of this approval is narrowly limited to section 112(g) and does not

confer or imply approval for purposes of section 110 or any other

provision under the Act. If Illinois does not wish to implement section

112(g) through its preconstruction permit program and can demonstrate

that an alternative means of implementing section 112(g) exists, the

EPA may, in the final action approving Illinois' part 70 program,

approve the alternative instead.

This proposed approval is for an interim period only, until such

time as the State receives delegation of the section 112(g) rules.

Accordingly, EPA is proposing to limit the duration of this approval to

a reasonable time following promulgation of section 112(g) regulations

so that Illinois, acting expeditiously, will be able to adopt rules

consistent with the section 112(g) regulations.

Once EPA promulgates the section 112(g) rules, implementation of

title V requires that Illinois adopt these rules within a reasonable

period of time. EPA considers final adoption by the State 12 months

after EPA promulgation a reasonable period of time. Once the State

adopts the section 112(g) rules, the State will issue permits in

accordance with the section 112(g) rules.

c. Program for Delegation of Section 112 Standards as Promulgated

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

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

delegation of section 112 standards as promulgated by EPA as they apply

to part 70 sources. Section 112(l)(5) requires that the State's program

contain adequate authorities, adequate resources for implementation,

and an expeditious compliance schedule, which are also requirements

under part 70.Therefore, the EPA is also proposing to grant approval

under section 112(l)(5) and 40 CFR 63.91 of Illinois' program for

receiving delegation of section 112 standards that are unchanged from

the Federal standards as promulgated. Because the State of Illinois has

historically accepted automatic delegation of section 112 standards and

requirements, EPA proposes to approve the delegation of section 112

standards and requirements through automatic delegation. Therefore,

once EPA promulgates a section 112 standard, the State of Illinois will

automatically assume responsibility for collection and receipt of any

information required by the standard, as well as any further activities

agreed to by IEPA and EPA. The details of this delegation mechanism

will be set forth in a Memorandum of Agreement between Illinois and EPA

expected to be completed prior to approval of Illinois' section 112(l)

program for straight delegations. This program applies to both existing

and future standards, but is limited to sources covered by the part 70

program.

The EPA is proposing approval under section 112(l) of the Clean Air

Act (CAA) of Illinois' state operating permits program for the purposes

of creating federally enforceable limitations on the potential to emit

of Hazardous Air Pollutants (HAPs) regulated under section 112 of the

CAA. The EPA is approving this program as meeting the criteria

articulated in the June 28, 1989, Federal Register notice for State

operating permit programs to establish limits federally enforceable on

potential to emit.

The June 28, 1989, notice provided that EPA would approve a state

operating permit program into a SIP for the purpose of establishing

federally enforceable limits on a source's potential to emit if the

program met five specific requirements. This notice, because it was

written prior to the 1990 amendments to section 112, addressed only SIP

programs to control criteria pollutants. Federally enforceable limits

on criteria pollutants (i.e., VOC's or PM-10) may have the incidental

effect of limiting certain HAPs listed pursuant to section 112(b). This

situation would occur when a pollutant classified as a HAP is also

classified as a criteria pollutant.1 As a legal matter, no

additional program approval by EPA is required in order for these

criteria pollutant limits to be recognized for this purpose.

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\1\The EPA intends to issue guidance addressing the technical

aspects of how these criteria pollutant limits may be recognized for

purposes of limiting a source's potential to emit of HAP to below

section 112 major source levels.

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EPA has determined that the five approval criteria for approving

FESOP programs into the SIP, as specified in the June 28, 1989, Federal

Register notice, are also appropriate for evaluating and approving the

programs under section 112(l). The June 28, 1989, notice does not

address HAP because it was written prior to the 1990 amendments to

section 112 and not because it establishes requirements unique to

criteria pollutants. Hence, the following five criteria are applicable

to state operating permit program approvals under section 112(l): (1)

The program must be submitted to and approved by EPA; (2) The program

must impose a legal obligation on the operating permit holders to

comply with the terms and conditions of the permit and that permits

which do not conform to either the operating permit program

requirements, the requirements of EPA's underlying regulations or the

June 28, 1989, criteria may be deemed ``not federally enforceable'' by

EPA; (3) The program must contain terms and conditions that are at

least as stringent as any requirements contained in the SIP or

enforceable under the SIP or any section 112 or other Clean Air Act

standard or requirement; (4) Permits issued under the program must

contain conditions that are permanent, quantifiable, and enforceable as

a practical matter; and (5) Permits issued under the program must be

subject to participation, including at a minimum advance notice of the

permit in the form of a 30-day public comment period.

In addition to meeting the criteria in the June 28, 1989, notice, a

state operating permit program must meet the statutory criteria for

approval under section 112(l)(5). Section 112(l) allows EPA to approve

a program only if it: (1) Contains adequate authority to assure

compliance with any section 112 standards or requirements; (2) provides

for adequate resources; (3) provides for an expeditious schedule for

assuring compliance with section 112 requirements; and (4) is otherwise

likely to satisfy the objectives of the Act.

The EPA plans to codify the approval criteria for programs limiting

potential to emit of HAP in Subpart E of part 63, the regulations

promulgated to implement section 112(l) of the Act. The EPA currently

anticipates that these criteria, as they apply to state operating

permit programs, will mirror those set forth in the June 28, 1989,

notice, with the addition that the State's authority must extend to HAP

instead of or in addition to VOC's and PM-10. The EPA currently

anticipates that state operating permit programs that are approved

pursuant to section 112(l) prior to the subpart E revisions will have

had to meet these criteria, and hence, will not be subject to any

further approval action.

The EPA believes it has authority under section 112(l) to approve

programs to limit potential to emit of HAPs directly under section

112(l) prior to this revision to subpart E. Section 112(l)(5) requires

EPA to disapprove program that are inconsistent with guidance required

to be issued under section 112(l)(2). This might be read to suggest

that the ``guidance'' referred to in section 112(l)(2) was intended to

be a binding rule. Even under this interpretation, the EPA does not

believe that section 112(l) requires this rulemaking to be

comprehensive. That is, it need not address all instances of approval

under section 112(l). The EPA has already issued regulations under

section 112(l) that would satisfy this requirement. Given the severe

timing problems posed by impending deadlines set forth in MACT

standards and for submittal of title V applications, EPA believes it is

reasonable to read section 112(l) to allow for approval of programs to

limit potential to emit prior to issuance of a rule specifically

addressing this issue. Accordingly, EPA is proposing approval of

Illinois' program now so as to enable Illinois to begin issuing

federally enforceable permits as soon as possible.

EPA proposes the approval of Illinois' federally enforceable state

operating permit program (FESOP) program for the purpose of limiting

potential to emit of HAP. The Illinois FESOP program was previously

approved for the purpose of limiting potential to emit of criteria

pollutants on December 17, 1992. 57 FR 59928. In that notice, EPA

stated that the Illinois state operating permit program met the five

criteria required for Federal approvability under the June, 1989,

register notice. See 57 FR 59930-59931. Illinois' FESOP program: (1)

Was submitted to and approved by EPA into the SIP; (2) provides that

all sources are under a legal obligation to adhere to the terms and

limitations of such permits and that permits which do not conform to

the operating permit program requirements and the requirements of EPA's

underlying regulations may be deemed ``not federally enforceable'' by

EPA; (3) provides that the Illinois Environmental Protection Agency

(IEPA) and Illinois Pollution Control Board must act in a manner

consistent with all pertinent Federal statutes and regulations

including the SIP; (4) ensures that all permit conditions are

permanent, quantifiable and enforceable as a practical matter; and (5)

ensures that all FESOP permits are issued subject to public

participation, including advance notification in the form of at least a

30-day public comment period. By approving the Illinois FESOP program,

EPA recognized the Illinois FESOP program as a federally enforceable

method of limiting potential to emit of criteria pollutants. 415 ILCS

5/9.1(d)(2) provides the statutory authority for the State to include

the requirements of section 111 and 112 of the Act, including any

regulations promulgated thereunder, into state permits.

Regarding the statutory criteria under section 112(l), the EPA

believes that Illinois' FESOP program contains authority to assure

compliance with section 112 requirements since the third criteria of

the June 28, 1989 notice is met, that is, since the program does not

provide for waiving any section 112 requirement. Sources would still be

required to meet section 112 requirements applicable to non-major

sources. Regarding adequate resources, Illinois has included in its

request for approval under section 112(l) a commitment to provide

adequate resources to implement and enforce the program. This request

is contained in a September 14, 1994, letter from Bharat Mathur, Chief

of the Bureau of Air, IEPA, to Stephen Rothblatt, Chief, Regulation

Development Branch, EPA Region 5. Fees will be collected from FESOP

sources through both the title V and FESOP process. Sources that apply

for FESOPs through the title V process will pay a fee of $1000. Sources

applying through the FESOP program will be charged a fee based upon

actual emissions. Since the processing of a FESOP permit consumes

considerably less resources than the processing of a title V permit,

the State believes that sufficient resources will be available to

administer FESOP permits for those who request and qualify. The EPA

believes this mechanism will be sufficient to provide for adequate

resources to implement this program, and will monitor the State's

implementation of the program to assure that adequate resources

continue to be available.

Illinois' FESOP program also meets the requirement for an

expeditious schedule for assuring compliance. A source seeking a

voluntary limit on potential to emit is probably doing so to avoid a

Federal requirement applicable on a particular date. Nothing in this

program would allow a source to avoid or delay compliance with the

Federal requirement if it fails to obtain the appropriate federally

enforceable limit by the relevant deadline. Finally, Illinois' FESOP

program is consistent with the objectives of the section 112 program

since its purpose is to enable sources to obtain federally enforceable

limits on potential to emit to avoid major source classification under

section 112. The EPA believes this purpose is consistent with the

overall intent of section 112.

The EPA recognizes that state operating permits may already exist

that contain restrictions on the potential to emit of HAPs. As long as

the State issued these permits in accordance with all State regulations

and the criteria discussed above, EPA will consider these permits to be

federally enforceable upon promulgation of this action.

d. Title IV

Illinois' program contains adequate authority to issue permits

which reflect the requirements of title IV and its implementing

regulations. Illinois' submittal letter contains a commitment to revise

its regulations as necessary to accommodate Federal revisions and

additions to title IV and the Acid Rain regulations once they are

promulgated.

B. Options for Approval/Disapproval and Implications

The EPA is proposing to grant interim approval to the operating

permits program submitted by Illinois on November 15, 1993. If this

approval is promulgated, the State must make the following changes to

receive full approval: (1) The State must amend 415 ILCS 5/39.5(5)(e)

to ensure that certifications by responsible officials comply with all

Federal requirements, namely that the official has made a reasonable

inquiry and that the certification is based upon information and

belief; (2) the State must amend 415 ILCS 5/39.5(13)(c)(vi) to require

the use of the significant modification procedure to incorporate

emission trades into a CAAPP permit; (3) for full approval of the

State's program, the State must develop regulations detailing the

actual procedural and compliance requirements necessary for

incorporation of preconstruction permits into part 70 permits as a

supplement to the State's title V submittal or submitted as a revision

to the State's preconstruction permit program state implementation

plan; (4) the State must amend 415 ILCS 5/44(j)(4)(D) to include a

prohibition against knowing tampering of a monitoring method; and (5)

the State must correct all deficiencies in its insignificant activities

regulations currently under development. If finalized insignificant

activities rules address EPA's concerns and these rules are submitted

prior to final action on this notice, then EPA can grant full approval

of these rules. If EPA's concerns are not addressed prior to final

action, then the State's insignificant activities rules will receive

interim approval.

Illinois' program is not fully approvable because of the

deficiencies mentioned above. The program, however, substantially meets

the requirements of part 70 because Illinois' CAAPP complies with all

other part 70 requirements. This interim approval, which may not be

renewed, extends for a period of up to 2 years. Because the interim

approval automatically expires two years after promulgation of a final

interim approval, the State may submit its interim corrections at any

time, however, the State may not submit its corrections any later than

18 months after promulgation of final interim approval. The EPA will

then have six months to promulgate a final action.

During the interim approval period, the State is protected from

sanctions for failure to have a program, and EPA is not obligated to

promulgate a Federal permits program in the State. Permits issued under

a program with interim approval have full standing with respect to part

70, and the 1-year time period for submittal of permit applications by

subject sources begins upon interim approval, as does the 3-year time

period for processing the initial permit applications.

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

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

of section 112 standards as promulgated by EPA as they apply to part 70

sources. Section 112(l)(5) requires that the State's program contain

adequate authorities, adequate resources for implementation, and an

expeditious compliance schedule, which are also requirements under part

70. Therefore, 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 program for delegations only applies to

sources covered by the part 70 program.

III. 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, 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. The EPA will

consider any comments received by October 31, 1994.

B. Executive Order 12866

The Office of Management and Budget (OMB) has exempted this action

from Executive Order 12866 review.

C. Regulatory Flexibility Act

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

must prepare a regulatory flexibility analysisassessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, EPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000.

Operating permit 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

permit program approval does not impose any new requirements, I certify

that it does not have a significant impact on any small entities

affected. Moreover, due to the nature of the Federal-state relationship

under the Act, preparation of a regulatory flexibility analysis would

constitute Federal inquiry into the economic reasonableness of State

action. The Act forbids EPA to base its actions concerning operating

permit programs on such grounds. Union Electric Co. v. U.S. E.P.A., 427

U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C. 7410(a)(2).

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations, Operating permits,

Reporting and recordkeeping requirements.

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

Dated: September 21, 1994.

David A. Ullrich,

Acting Regional Administrator.

[FR Doc. 94-24253 Filed 9-29-94; 8:45 am]

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