Clean Air Act Final Interim Approval of Operating Permits Program; State of Montana

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[MT-001; FRL-5206-2]

Clean Air Act Final Interim Approval of Operating Permits

Program; State of Montana

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: The EPA is promulgating final interim approval of the

Operating Permits Program submitted by the State of Montana for the

purpose of complying with Federal requirements for an approvable State

Program to issue operating permits to all major stationary sources, and

to certain other sources.

EFFECTIVE DATE: June 12, 1995.

ADDRESSES: Copies of the State's submittal and other supporting

information used in developing the final interim approval are available

for inspection during normal business hours at the following location:

U.S. Environmental Protection Agency, Region 8, 999 18th Street, suite

500, Denver, Colorado 80202.

FOR FURTHER INFORMATION CONTACT: Laura Farris, 8ART-AP, U.S.

Environmental Protection Agency, Region 8, 999 18th Street, suite 500,

Denver, Colorado 80202, (303) 294-7539.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

Title V of the 1990 Clean Air Act Amendments (sections 501-507 of

the Clean Air Act (``the Act'')), and implementing regulations at 40

Code of Federal Regulations (CFR) part 70 (part 70) require that States

develop and submit operating permits programs to EPA by November 15,

1993, and that EPA act to approve or disapprove each program within one

year after receiving the submittal. The EPA's program review occurs

pursuant to section 502 of the Act and the part 70 regulations, which

together outline criteria for approval or disapproval. Where a program

substantially, but not fully, meets the requirements of part 70, EPA

may grant the program interim approval for a period of up to two years.

If EPA has not fully approved a program by two years after the November

15, 1993 date, or by the end of an interim program, it must establish

and implement a Federal program.

On February 14, 1995 EPA published a Federal Register notice

proposing interim approval of the Operating Permits Program for the

State of Montana (PROGRAM). See 60 FR 8335. EPA received no adverse

comments on this proposed interim approval, and is taking final action

to promulgate interim approval of the Montana PROGRAM.

II. Final Action and Implications

A. Analysis of State Submission

The Governor of Montana submitted an administratively complete

title V Operating Permit Program (PROGRAM) for the State of Montana on

March 29, 1994. The Montana PROGRAM, including the operating permit

[[Page 25144]] regulations (Sub-Chapter 20, sections 16.8.2001 through

16.8.2025, inclusive, of the Administrative Rules of Montana),

substantially meets the requirements of 40 CFR 70.2 and 70.3 with

respect to applicability; 70.4, 70.5, and 70.6 with respect to permit

content including operational flexibility; 70.5 with respect to

complete application forms and criteria which define insignificant

activities; 70.7 with respect to public participation and minor permit

modifications; and 70.11 with respect to requirements for enforcement

authority.

EPA's comments noting deficiencies in the Montana PROGRAM were sent

to the State in a letter dated October 3, 1994. The deficiencies were

segregated into those that require corrective action prior to interim

PROGRAM approval, and those that require corrective action prior to

full PROGRAM approval. The State committed to address the PROGRAM

deficiencies that require corrective action prior to interim PROGRAM

approval in a letter dated October 20, 1994. The State submitted these

corrective actions in letters dated March 30 and April 5, 1995. EPA has

reviewed these corrective actions and has determined them to be

adequate to allow for interim PROGRAM approval.

B. Final Action

The EPA is promulgating interim approval of the Operating Permits

Program submitted by the State of Montana on March 29, 1994. The State

must complete the following corrective actions to receive full PROGRAM

approval: (1) Section 16.8.2002(1)(d) of Sub-Chapter 20 is part of the

definition of administrative permit amendment and allows for the

department's discretion in determining whether or not a change in

monitoring or reporting requirements would be as stringent as current

monitoring or reporting requirements. This does not meet the criteria

of an administrative permit amendment listed 40 CFR 70.7(d)(1)(iii),

which requires that only more frequent monitoring or reporting

requirements can be processed through an administrative permit

amendment. Prior to full PROGRAM approval, the State must delete

section 16.8.2002(1)(d) of Sub-Chapter 20, which allows for the

department's discretion in determining whether or not a change in

monitoring or reporting requirements would be as stringent as current

monitoring or reporting requirements. (2) Section 16.8.2002(1)(f) of

Sub-Chapter 20 is part of the definition of administrative permit

amendment and allows the State to determine if other types of permit

changes not listed in the definition of administrative permit amendment

can be incorporated into a permit through the administrative permit

amendment process. This does not meet requirements of 40 CFR

70.7(d)(1)(vi). This provision must be changed prior to full PROGRAM

approval to allow the Administrator of EPA (or EPA and the State) to

determine if changes not included in the definition of administrative

permit amendment can be processed through the administrative permit

amendment process. (3) The definition of ``insignificant emissions

unit'' in section 16.8.2002(22)(a) of Sub-Chapter 20 includes an

emission threshold of 15 tons per year of any pollutant other than a

hazardous air pollutant. EPA does not consider this to be a reasonable

level from which to exempt emissions units from title V operating

permit requirements. Prior to full PROGRAM approval, the State must

lower the emissions cap for defining ``insignificant emissions units''

to assure they will not encompass activities that trigger applicable

requirements. If the State defines insignificant activity levels

greater than those suggested, a demonstration must be made to show why

such levels are, in fact, insignificant. (4) Section

16.8.2002(24)(a)(ii) of Sub-chapter 20 defines ``non-Federally

enforceable requirement'' to include any term contained in a

preconstruction permit issued under Sub-Chapters 9, 11, 17, or 18 that

is not Federally enforceable. However, everything contained in a

preconstruction permit issued under these Sub-Chapters (which currently

are, or soon will be, included in the State's SIP) is considered to be

Federally enforceable. Prior to full PROGRAM approval this language

must be revised or deleted. (5) Section 16.8.2008 of Sub-Chapter 20

that lists the permit content requirements does not require a

severability clause consistent with Sec. 70.6(a)(5) of the Federal

permitting regulation. Prior to full PROGRAM approval, the State must

include a severability clause in Sub-Chapter 20 consistent with

Sec. 70.6(a)(5) of the Federal permitting regulation. (6) Section

IX.C.2 of the checklist that was part of the PROGRAM submittal

regarding the implementation of the enhanced monitoring requirements of

section 114(a)(3) of the Act states that there are no impediments to

using any monitoring data to determine compliance and for direct

enforcement. However, the State has incorporated by reference the

Federal new source performance standards (NSPS) and national emissions

standards for HAPs (NESHAPs) in 40 CFR parts 60 and 61 into its SIP-

approved regulations, which provide that compliance can be determined

only by performance tests (see 40 CFR 60.11(a) and 40 CFR 61.12(a)).

Prior to full PROGRAM approval, the State must provide an Attorney

General's opinion verifying the State's authority to use any monitoring

data to determine compliance and for direct enforcement. If the State

does not have such authority, then the State's SIP-approved regulations

must be revised prior to full PROGRAM approval to provide authority to

use any monitoring data to determine compliance and for direct

enforcement. (7) The Attorney General's Opinion regarding the State's

authority to terminate permits is unclear. MCA 75-2-211(1) and 217(1)

refer to ``issuance, modification, suspension, revocation, and

renewal'' of permits, but not ``termination.'' Prior to full PROGRAM

approval, the State must provide an Attorney General's interpretation

that Montana's statutory authority extends to ``terminating'' permits.

(8) The PROGRAM submittal contained a letter to Douglas M. Skie dated

February 28, 1994 certifying the State's authority to implement section

112 of the Act. The letter discusses the State's authority to require

permit applications from sources subject to section 112(j) of the Act,

but does not address the State's ability to make case-by-case MACT

determinations. Prior to full PROGRAM approval, the State must certify

its ability to make case-by-case MACT determinations pursuant to

section 112(j) of the Act. (9) The State's February 28, 1994 letter to

EPA also discusses the State's authority to implement section 112(r) of

the Act, but does not address the State's ability to require annual

certifications from part 70 sources as to whether their risk management

plans (RMPs) are being properly implemented, or provide a compliance

schedule for sources that fail to submit the required RMP. Prior to

full PROGRAM approval, the State must certify its ability to require

annual certifications from part 70 sources regarding proper

implementation of their RMPs and to provide a compliance schedule for

sources that fail to submit the required RMP. (10) Section

16.8.2008(2)(a) allows the State to terminate, or revoke and reissue,

permits for continuing and substantial violations. This language may be

too limiting and may not provide full authority needed to be consistent

with section 502(b)(5)(D) of the Act, which requires that state permit

programs have authority to ``terminate, modify, revoke and reissue

permits for cause.'' The [[Page 25145]] State addressed this issue in

its March 30, 1995 letter; however, EPA was unable to determine whether

Montana's PROGRAM is consistent in all respects with section

502(b)(5)(D) of the Act. Prior to full PROGRAM approval, the State must

either (a) clarify that it has authority to terminate or revoke and

reissue permits in all circumstances in which cause to do so exists or

(b) amend section 16.8.2008(2)(a) to eliminate any provisions that may

be construed to limit ``cause'' in an unacceptable manner.

Refer to the technical support document accompanying this

rulemaking for a detailed explanation of these PROGRAM deficiencies and

the required corrective actions.

The scope of Montana's final interim PROGRAM approval does not

extend to ``Indian Country,'' as defined in 18 U.S.C. 1151, including

the following ``existing or former'' Indian reservations in the State:

Northern Cheyenne, Rocky Boys, Blackfeet, Crow, Flathead, Fort Belknap,

and Fort Peck Indian Reservations. Before EPA would approve the State's

PROGRAM for any portion of ``Indian Country,'' EPA would have to be

satisfied that the State has authority, either pursuant to explicit

Congressional authorization or applicable principles of Federal Indian

law, to enforce its laws against existing and potential pollution

sources within any geographical area for which it seeks program

approval and that such approval would constitute sound administrative

practice. This is a complex and controversial issue, and EPA does not

wish to delay interim approval of the State's PROGRAM with respect to

undisputed sources while EPA resolves this question.

In deferring final action on PROGRAM approval for sources located

in ``Indian Country,'' EPA is not making a determination that the State

either has adequate jurisdiction or lacks such jurisdiction. Instead,

EPA is deferring judgment regarding this issue pending EPA's evaluation

of the State's analysis.

This interim PROGRAM approval, which may not be renewed, extends

until June 11, 1997. During this interim approval period, the State of

Montana is protected from sanctions, and EPA is not obligated to

promulgate, administer and enforce a Federal operating permits program

in the state of Montana. Permits issued under a program with interim

approval have full standing with respect to part 70, and the one year

time period for submittal of permit applications by subject sources

begins upon the effective date of this interim approval, as does the

three year time period for processing the initial permit applications.

If the State of Montana fails to submit a complete corrective

PROGRAM for full approval by December 11, 1996, EPA will start an 18-

month clock for mandatory sanctions. If the State of Montana then fails

to submit a corrective PROGRAM that EPA finds complete before the

expiration of that 18-month period, EPA will be required to apply one

of the sanctions in section 179(b) of the Act, which will remain in

effect until EPA determines that the State of Montana has corrected the

deficiency by submitting a complete corrective PROGRAM. Moreover, if

the Administrator finds a lack of good faith on the part of the State

of Montana, both sanctions under section 179(b) will apply after the

expiration of the 18-month period until the Administrator determines

that the State of Montana has come into compliance. In any case, if,

six months after application of the first sanction, the State of

Montana still has not submitted a corrective PROGRAM that EPA has found

complete, a second sanction will be required.

If EPA disapproves the State of Montana's complete corrective

PROGRAM, EPA will be required to apply one of the section 179(b)

sanctions on the date 18 months after the effective date of the

disapproval, unless prior to that date the State of Montana has

submitted a revised PROGRAM and EPA has determined that it corrected

the deficiencies that prompted the disapproval. Moreover, if the

Administrator finds a lack of good faith on the part of the State of

Montana, both sanctions under section 179(b) shall apply after the

expiration of the 18-month period until the Administrator determines

that the State of Montana has come into compliance. In all cases, if,

six months after EPA applies the first sanction, the State of Montana

has not submitted a revised PROGRAM that EPA has determined corrects

the deficiencies, a second sanction is required.

In addition, discretionary sanctions may be applied where warranted

any time after the expiration of an interim approval period if the

State of Montana has not timely submitted a complete corrective PROGRAM

or EPA has disapproved its submitted corrective PROGRAM. Moreover, if

EPA has not granted full approval to the Montana PROGRAM by the

expiration of this interim approval and that expiration occurs after

November 15, 1995, EPA must promulgate, administer and enforce a

Federal permits program for the State of Montana upon interim approval

expiration.

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 promulgating 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 applies to sources covered by

the part 70 program, as well as non-part 70 sources.

EPA is also finalizing its approval of Montana's preconstruction

permit program found in Sub-Chapter 11, sections 16.8.1101 through

16.8.1120, of the State's regulations under the authority of title V

and part 70 solely for the purpose of providing a mechanism to

implement section 112(g) during any transition period between EPA's

promulgation of a section 112(g) rule and adoption by the State of

rules to implement section 112(g). However, since this approval is for

the single purpose of providing a mechanism to implement section 112(g)

during any transition period, the approval itself will be without

effect if EPA decides in the final section 112(g) rule that sources are

not subject to the requirements of the rule until State regulations are

adopted. The EPA is limiting the duration of this approval to 12 months

following promulgation by EPA of the final section 112(g) rule.

III. Administrative Requirements

A. Docket

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

for the final interim approval, including public comments received and

reviewed by EPA on the proposal, are maintained in a docket 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 final interim approval. The docket is available for

public inspection at the location listed under the ADDRESSES section of

this document. [[Page 25146]]

B. Executive Order 12866

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

C. Regulatory Flexibility Act

The EPA's actions under section 502 of the Act do not create any

new requirements, but simply address operating permits programs

submitted to satisfy the requirements of 40 CFR part 70. Because this

action does not impose any new requirements, it does not have a

significant impact on a substantial number of small entities.

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.

Dated: May 2, 1995.

Jack McGraw,

Acting Regional Administrator.

Part 70, chapter I, title 40 of the Code of Federal Regulations is

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. Appendix A to part 70 is amended by adding the entry for Montana

in alphabetical order to read as follows:

Appendix A to Part 70--Approval Status of State and Local Operating

Permits Programs

* * * * *

Montana

(a) Montana Department of Health and Environmental Sciences--Air

Quality Division: submitted on March 29, 1994; effective on June 12,

1995; interim approval expires June 11, 1997.

(b) [Reserved]

[FR Doc. 95-11677 Filed 5-10-95; 8:45 am]

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