Clean Air Act Proposed Interim Approval Operating Permits Program for the State of Texas

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[TX-001; FRL-5217-7]

Clean Air Act Proposed Interim Approval Operating Permits Program

for the State of Texas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes source category-limited interim approval of

the operating permits program submitted by the Governor of Texas for

the State of Texas 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,

with the exception of sources on Indian Lands. Source category-limited

interim approval was specifically requested by the Governor for this

submission.

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

July 7, 1995.

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

Jole C. Luehrs, Chief, New Source Review (NSR) Section, at the EPA

Region 6 Office listed below. Copies of the State's submittal and other

supporting information used in developing the proposed interim approval

are available for inspection during normal business hours at the

following locations. Interested persons wanting to examine these

documents should make an appointment with the appropriate office at

least 24 hours before visiting day.

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

1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.

Texas Natural Resource Conservation Commission, Office of Air Quality,

12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: David F. Garcia, New Source Review

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

Suite 700, Dallas, Texas 75202-2733, telephone 214-665-7217.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

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

November 15, 1990 (``the Act''), the EPA has promulgated rules which

define the minimum elements of an approvable State operating permits

program and the corresponding standards and procedures by which the EPA

will approve, oversee, and withdraw approval of a State operating

permits program (see 57 Federal Register 32250, July 21, 1992). These

rules are codified at 40 Code of Federal Regulations (CFR) part 70

(``the part 70 regulation''). Title V requires States to develop, and

submit to the EPA, programs for issuing these operating permits to all

major stationary sources and to certain other sources.

The Act requires that States develop and submit these programs to

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

disapprove each program within one year after receiving the submittal.

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

the part 70 regulation which together outline criteria for approval or

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

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

for a period of up to two years. Where a State requests source

category-limited interim approval and demonstrates compelling reasons

in support thereof, the EPA may also grant such an interim approval. If

the EPA has not fully approved a program by two years after the date of

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

establish and implement a Federal program.

B. Federal Oversight and Sanctions

If the EPA were to finalize this proposed source category-limited

interim approval, it would grant that approval for a period of two

years following the effective date of final interim approval, and the

interim approval could not be renewed. During the interim approval

period, the State of Texas would be protected from sanctions, and the

EPA would not be obligated to promulgate, administer, and enforce a

Federal permits program for the State of Texas. Permits issued under a

program with interim approval have full standing with respect to part

70, and the State will permit sources based on the transition schedule

provided in Regulation XII, Title 31 of the Texas Administrative Code

(TAC).

Following final interim approval, if Texas has failed to submit a

complete corrective program for full approval by the date six months

before expiration of the interim approval, the EPA would start an 18-

month clock for mandatory sanctions. If Texas then failed to submit a

corrective program that the EPA found complete before the expiration of

that 18-month period, the EPA would be required to apply one of the

sanctions [[Page 30038]] in section 179(b) of the Act, which would

remain in effect until the EPA determined that Texas had corrected the

deficiency by submitting a complete corrective program. Moreover, if

the Administrator found a lack of good faith on the part of Texas, both

sanctions under section 179(b) would apply after the expiration of the

18-month period until the Administrator determined that Texas had come

into compliance. In any case, if six months after application of the

first sanction, Texas still had not submitted a corrective program that

the EPA found complete, a second sanction would be required.

If following final interim approval, the EPA were to disapprove

Texas' complete corrective program, the EPA would 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 Texas had

submitted a revised program and the EPA had determined that it

corrected the deficiencies that prompted the disapproval. Moreover, if

the Administrator found a lack of good faith on the part of Texas, both

sanctions under section 179(b) would apply after the expiration of the

18-month period until the Administrator determined that Texas had come

into compliance. In any case, if six months after application of the

first sanction, Texas still had not submitted a corrective program that

the EPA found complete, a second sanction would be required.

In addition, discretionary sanctions may be applied where warranted

any time after the end of an interim approval period if Texas has not

timely submitted a complete corrective program or the EPA has

disapproved a submitted corrective program. Moreover, if the EPA has

not granted full approval to Texas' program by the expiration of an

interim approval, and that expiration occurs after November 15, 1995,

the EPA must promulgate, administer, and enforce a Federal permits

program for Texas upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials

Pursuant to section 502(d) of the Act, the Governor of each State

is required to develop and submit to the Administrator an operating

permits program under State or local law or under an interstate compact

meeting the requirements of title V of the Act. Texas submitted, under

the signature of former Governor Ann W. Richards, the operating permits

program submittal to be implemented in all areas of the State of Texas

with the exception of Indian Lands. The State of Texas requested that

the EPA approve its operating permit program as a source category-

limited interim program for a period of two years.

In the State's operating permits program submittal, Texas does not

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

tribal government in Texas has authority to administer an independent

air program in the State. Upon promulgation of regulations under

section 301(d) of the Act, Indian tribes will be able to apply for

treatment as States under the Act, and receive the authority from the

EPA to implement an operating permits program under title V of the Act.

The EPA will, where appropriate, conduct a Federal title V operating

permits program in accordance with forthcoming EPA regulations, for

those Indian tribes which do not apply for treatment as States under

the Act.

The Texas Air Control Board (TACB) was the traditional implementing

authority for the Act and all of its amendments. The submittal,

including the rules, were adopted by the TACB. The TACB's operations

and legal responsibilities were consolidated with operations of other

Texas environmental agencies. Therefore, effective September 1, 1993,

the Texas Air Control Board became part of a new State of Texas

environmental agency, the Texas Natural Resource Conservation

Commission (TNRCC). All rules, permits, orders, and any other final

actions of the TACB remain in full legal effect unless and until

revised by the TNRCC.

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

description of the State's operating permits program describing how it

intends to carry out its responsibilities under the part 70

regulations. The Texas Federal Operating Permits program description,

volume 1 of the submittal, explains that the Texas operating permits

program was developed to satisfy all of the requirements of the part 70

regulation. The operating permit in Texas will be used to consolidate

relevant applicable requirements into one permit document.

The program description provides a broad overview of the State's

program, a broad description of how the Federal operating permits

program in Texas will be implemented in accordance with part 70, and a

description of how the program will implement the applicable

requirements set forth in other titles of the Act, specifically title

I, title III, title IV, and title VII. The State projects over 3,000

sites will be subject to the operating permits program.

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

legal opinion from the Attorney General (or the attorney for a State

air pollution control agency that has independent legal counsel),

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

operating permits program. The Texas Attorney General submitted such an

opinion in Volume 5 (the submittal supplement), demonstrating adequate

legal authority as required by Federal law and regulation for interim

approval.

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

program documentation not contained in the regulations, such as permit

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

its permits program. The State addresses this requirement in the Texas

Federal Operating Permits Program Submittal Supplement in Volume 5 (the

submittal supplement). The supplemental volume contains a model permit,

application forms (including the standard phase II acid rain forms),

monitoring, recordkeeping and reporting forms, public notice examples

and guidance to implement the operating permits program. The detailed

guidance addresses many part 70 requirements including documentation on

permit applicability, permit application procedures, permit issuance,

permit revisions and reopenings, permit renewals, compliance plan and

certifications, and monitoring, reporting and recordkeeping.

2. Regulations and Program Implementation

The State of Texas has submitted TACB Regulation XII, Title 31 of

TAC, Chapter 122--``Federal Operating Permits'' (``the Texas permit

regulation'') and TACB General Rules, Title 31 of TAC, section 101.27

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

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

of their procedurally correct adoption was submitted in the Texas

Federal Operating Permits Program Volumes 1 and 2 of the submittal.

Copies of all applicable State and local statutes and regulations which

authorize the part 70 program, including those governing State

administrative procedures, were submitted with the State's program in

Volumes 3 and 4.

The following discusses how the Texas permit regulation meets or

does not meet the existing part 70 regulation. However, due to pending

litigation involving sections of the part 70 regulation, revisions have

been proposed, and more proposed revisions may be forthcoming. Any

revisions to [[Page 30039]] the part 70 regulation may alter or obviate

the need for the State to make the regulatory changes identified in

this notice. During the State's rulemaking process proposing to make

changes necessary for full title V approval, the EPA will comment on

the State's proposal using the criteria in whatever regulation is in

place at that time. In the Federal Register notice proposing action on

the State's submittal for full approval, the EPA will use the criteria

in whatever is the final part 70 regulation, whether it be the existing

July 21, 1992, regulation or a later version (``part 70'').

The following requirements, set out in the part 70 regulation, are

addressed in the State's submittal: (1) Provisions to determine

applicability (40 CFR 70.3(a)): 31 TAC section 122.120; (2) Provisions

to determine complete applications (40 CFR 70.5(a)(2)): 31 TAC section

122.134 and the forms (40 CFR 70.4(b)(4)): Supplemental Volume,

Operating Permits Guidance; (3) Public Participation (40 CFR 70.7(h)):

31 TAC sections 122.150-122.155; (4) Provisions for minor permit

modifications (40 CFR 70.7(e)(2)): 31 TAC sections 122.215-122.217; (5)

Provisions for permit content (40 CFR 70.6(a)): 31 TAC sections

122.141-122.145; (6) Provisions for operational flexibility (40 CFR

70.4(b)(12)): 31 TAC section 122.221; (7) Provisions to determine

insignificant activities (40 CFR 70.5(c)): 31 TAC section 122.010

(definition of applicable requirement) and sections 122.215-122.217;

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

Supplemental Volume ``State of Texas Office of the Attorney General''

and Volume 3, ``Texas Health and Safety Code'', section 382.082(b).

The following requirements of 40 CFR part 70 are addressed in the

Texas permit regulation:

(a) Applicability criteria, including any criteria used to

determine insignificant activities or emissions levels (40 CFR

70.4(b)(2)). These provisions require all sources subject to the

operating permits regulations to have a permit to operate that assures

compliance by the source with all applicable requirements. The State is

to submit a program that, at a minimum, assures adequate authority to

issue permits in compliance with all the applicable requirements of

title V of the Act and the part 70 regulation. 40 CFR 70.2 defines the

term ``applicable requirement'' to include: any standard or other

requirement provided for in the applicable implementation plan approved

or promulgated by the EPA through rulemaking under title I of the Act

that implements the relevant requirements of the Act; any term or

condition of any preconstruction permit issued pursuant to regulation

approved or promulgated through rulemaking under title I including Part

C or D, of the Act; and additional requirements listed in 40 CFR 70.2.

40 CFR part 70 requires all applicable requirements to be adequately

addressed in the permit application and the operating permit.

Section 122.010 of the Texas permit regulation defines the term

``applicable requirement.'' Paragraph A of the definition makes

specific reference to the Texas State Implementation Plan (SIP)

approved chapters which the State considers relevant requirements of

title I of the Act. Paragraph B uses the qualifier ``Part C (Prevention

of Significant Deterioration) or Part D (Nonattainment Review)'' to

further specify what constitute applicable requirements. This

definition excludes certain minor NSR permitting activities as

applicable requirements. Under the Texas permitting structure, any

reasonably available control technology (RACT), maximum achievable

control technology (MACT), section 112, or section 111 requirements

applicable to minor units at major sources (whether reflected in a

minor source permit or not) will be included as part of major source's

original title V permit. Any non-RACT, non-111, and non-112 minor NSR

permitting requirement will not be included in the major source's title

V permit. For this reason, the proposed definition is inconsistent with

the definition contained in the part 70 regulation. The EPA interprets

the Federal definition of ``applicable requirement'' to include terms

and conditions of ``any preconstruction permits issued pursuant to

regulations approved or promulgated through rulemaking under title I'',

including all minor new source review permits.

However, on August 29, 1994, (see 59 FR 44574, Operating Permits

Program Interim Approval Criteria), the EPA proposed revisions to 40

CFR part 70 to allow interim approval for States such as Texas whose

programs do not provide for incorporating into permits all requirements

established through EPA-approved minor NSR programs, and that can show

compelling reasons for receiving interim approval. The State of Texas

has argued that the State's existing minor NSR program is so stringent

as to make the integration of a minor NSR permit into part 70 permits

infeasible, and from the standpoint of environmental protection,

unnecessary. The EPA acknowledges that Texas' 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. Texas has also pointed to the

exceptionally large number of part 70 sources which are located in the

State and which are candidates for minor NSR. On the basis of the

showing of compelling reasons described above, the EPA believes that a

State or local permitting authority with minor NSR/part 70 integration

difficulties such as Texas would warrant interim approval.

The following sections of the permit regulation are directly

related and are considered part of the minor NSR/part 70 integration

issue: permit application (sections 122.130-122.139), permit revisions

(sections 122.210-122.221), and permit content (section 122.141-

122.145). For full approval, these sections must be revised to be

consistent with part 70.

The August 29, 1994, proposal for Operating Permits Program Interim

Approval Criteria requires that, in such interim approval situations, a

State: (1) Include a statement in permits that certain minor NSR

requirements are not included in permits issued during the interim

period; (2) include a cross-reference in each operating permit to the

minor NSR permit for that source; and (3) require reopening of permits

for incorporation of minor NSR permit conditions upon completion of the

interim approval period. If the August proposal is finalized, it is the

EPA's position that the Texas program can be granted interim

authorization as long as the State complies with the three conditions

discussed above.

Section 122.120 of the Texas permit regulation addresses 40 CFR

70.3(a), regarding applicability of part 70. Section 122.120 requires

the owner or operator of a site to submit an application for a Federal

operating permit if the site contains one or more of the following: (1)

Any major source as defined in section 122.010 (relating to

[[Page 30040]] general definitions); (2) any affected source as defined

in section 122.012 (relating to acid rain definitions); (3) any solid

waste incineration unit required to obtain a Federal operating permit

pursuant to section 129(e) of title I of the Act; and (4) any non-major

source which the EPA, through further rulemaking, has designated as no

longer exempt from the obligation to obtain a Federal operating permit.

The State further identifies in sections 122.120(4) (A)-(C) any non-

major source subject to section 111, any non-major source subject to

section 112 or ``any source in a source category designated by the

Administrator pursuant to title III of the Act''. The State's provision

regarding applicability is inconsistent with the Federal definition.

Sections (4) (A) and (B) each appear to define non-major source as

``any source, including an area source,'' subject to standards under

section 111 or 112 of the Act. Section 122.120(4) could potentially be

interpreted as exempting any source, even a major source, from the

requirement to obtain a part 70 permit. For full approval, the State

must revise sections 122.120(4) (A) and (B) to clarify source

applicability. Additionally, section 122.120(4)(C) of the permit

regulation defines non-major source as ``any source in a source

category designated by the Administrator pursuant to Title III of the

Act.'' 40 CFR 70.3(a) includes a number of different types of sources

other than section 112 sources. For full approval, section

122.120(4)(C) of the permit regulation must be modified to be

consistent with 40 CFR 70.3(a).

Section 122.010 of the Texas permit regulation defines major source

as ``any site which emits or has the potential to emit air pollutants

as described in subparagraphs (A), (B), and (C) of this definition.''

The permit regulation defines ``site'' to allow research and

development (R & D) operations to be treated as a separate site from

any manufacturing facility with which they are co-located. The State's

permit regulation is inconsistent with 40 CFR 70.3 which requires that

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

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

demonstrate adequate legal authority to issue permits and assure

compliance with each applicable requirement by all part 70 sources.

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

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

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

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

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

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

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

& D facility has a different two-digit Standard Industrial

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

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

New Source Review program.

The Texas permit regulation could cause certain part 70 major

sources, as defined in 40 CFR 70.2, or portions of such sources with

the same SIC code, to be treated as separate sources. This could cause

some part 70 sources to be exempted from coverage by part 70 permits

which must ensure all part 70 requirements for these sources are met.

For full part 70 approval, the Texas permit regulations must treat

research and development activities consistent with part 70.

Pursuant to 40 CFR 70.5(c), a permit application must describe all

emissions of regulated air pollutants emitted from any emission unit.

However, the Administrator may approve, as part of a State program, a

list of insignificant activities and emission levels which need not be

included in the permit application. The Texas operating permit program

is designed to require the applicant to certify all emission units

subject to an applicable or potential applicable requirement be

described in the permit application.

Section 122.132 of the Texas permit regulation discusses the

required information the permittee is to include in the operating

permit application. The permit application shall include for each

emission unit, or group of similar emission units: (1) Information

identifying each applicable requirement, any corresponding emission

limitation and any corresponding monitoring, reporting, and

recordkeeping requirements; and (2) information identifying potentially

applicable requirements for that particular type of emission unit and

the basis for the determination that those applicable requirements do

not apply.

Therefore, it is necessary for the applicant to identify all

potential applicable requirements for each unit and give a basis for

all negative applicable determinations. In other words, where a unit

has a limitation or a specific characteristic of an emission unit that

is limited by a regulation, but the applicant claims the unit is not

subject to that regulation, the applicant is required to justify why.

The applicant is responsible and is liable for including all applicable

and potentially applicable requirements in the permit application. The

potential applicable requirement language as a practical manner will

require the source to characterize operations and emissions in a manner

that is comprehensive enough to allow the State to independently verify

which requirements are applicable. This process is subject to audits by

State field inspectors, and action could be taken if violations of the

Texas Permit Regulation exist.

Pursuant to section 122.120(1) of the Texas permit regulation, the

owner or operator of a site shall submit an application to the TNRCC if

the source is a major source. Major source applicability is calculated

on a site's potential to emit air pollutants. When the applicant is

calculating major source applicability, all emissions at each unit will

be accounted for at the site, regardless if a unit is potentially

subject to an applicable requirement. The operating permit application

requires the applicant to indicate all air pollutants that are major at

the site. The operating permit will reference pre-construction permits

in which specific emission data for each emission unit will reside.

Additionally, more detail of specific emission data is contained in an

emission inventory database.

The design and approach the State uses to keep activities out of

the operating permit application is considered practical and equivalent

to part 70. This design attains the same results as a list of

insignificant activities or emissions thresholds for units. The EPA

believes the procedure set forth in the Texas permit regulation to

identify insignificant activities achieves the goal and intent of the

part 70 regulation and therefore is consistent and acceptable.

The part 70 regulation requires the permit application to describe

all emissions of regulated air pollutants emitted from any emissions

unit. A regulated air pollutant includes any pollutant subject to a

standard promulgated under section 112 or other requirement established

under section 112 of the Act, including sections 112(g), (j), and (r).

The Texas permit regulation defines the term ``air pollutant'' and does

not define ``regulated air pollutant.'' It defines air pollutant to

include ``any pollutant listed in section 112(b) or section 112(r) of

the Act and subject to a standard promulgated under section 112 of the

Act.'' The term ``air pollutant'' is also used in the Texas definitions

for ``potential to emit'' and ``major source.'' This creates an

inconsistency with the part 70 regulation, in which applicability is

based on a source's potential to emit any air pollutant,

[[Page 30041]] including those listed pursuant to section 112, rather

than on pollutants which are subject to a promulgated standard. For

full approval, the definition of ``air pollutant'' must be modified to

be consistent with the part 70 regulation.

Section 122.010 of the Texas permit regulation defines ``major

source'' and further identifies the twenty-seven stationary source

categories required to include a source's fugitive emissions in

determining when a source is major. Category xxvii states that, for

``any other stationary source category which, as of August 7, 1980, is

being regulated under sections 111 or 112 of the Act,'' fugitives must

be counted in determining if the source is major. This is inconsistent

with the current 40 CFR 70.2 which requires fugitive emissions to be

counted for all section 111 and 112 standards, and which does not limit

the stationary source categories to those which existed as of August 7,

1980. For full approval, the State must be consistent with part 70.

Section 122.010 of the Texas permit regulation defines ``title I

modification'' as a change at a site that qualifies as a modification

under section 111 of title I of the Act or section 112(g) of title I of

the Act, or as a major modification under part C or part D of title I

of the Act. The State's definition of ``title I modification'' does not

include changes reviewed under a minor source preconstruction review

program (``minor NSR changes''), nor does it include changes that

trigger the application of National Emission Standards for Hazardous

Air Pollutants (NESHAP) established pursuant to section 112 of the Act

prior to the 1990 Amendments. The EPA is currently in the process of

determining the appropriate interpretation of ``title I modification''.

As further explained below, the EPA has solicited public comment on

whether the phrase ``modification under any provision of title I of the

Act'' in 40 CFR 70.7(e)(2)(i)(A)(5) should be interpreted to mean

literally any change at a source that would trigger permitting

authority review under regulations approved or promulgated under title

I of the Act. This would include minor State preconstruction review

programs approved by the EPA as part of the State Implementation Plan

under section 110(a)(2)(C) of the Clean Air Act and regulations

addressing source changes that trigger the application of NESHAP

established pursuant to section 112 of the Act prior to the 1990

Amendments.

In the August 29, 1994, proposed revisions to the interim approval

criteria at 40 CFR section 70.4(d) the EPA proposes to allow State

programs with a narrower definition of ``title I modification'' to

receive interim approval (59 FR 44572). The EPA in that notice states

its belief that the better reading of ``title I modification'' would

include minor NSR and pre-1990 NESHAP requirements, but solicited

public comment on the appropriate interpretation of the term (59 FR

44573). If the definition of ``title I modification'' is finalized to

include minor NSR changes, States such as Texas which have a narrower

definition are eligible for interim but not final approval. If the

final definition excludes changes reviewed under minor NSR and changes

that trigger a pre-1990 NESHAP requirement, the State's definition of

``title I modification'' would be consistent with part 70.

For similar reasons, the EPA will not construe 40 CFR section

70.7(e)(2)(i)(A)(3) to prohibit the State from receiving interim

approval because it allows minor NSR case-by-case determination changes

to be processed as minor permit modifications. Again, although the EPA

has reasons for believing that the better interpretation of ``title I

modification'' is the broader one, the EPA does not believe that it is

appropriate to deny interim approval to a State such as Texas on such

grounds.

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

requirements are addressed in sections 122.130-122.139 of the Texas

permit regulation. A transition plan is included in the permit

regulation which accounts for six SIC codes subject to the Texas

interim approval program. The Texas permit regulation requires the

owner or operator to submit a timely and complete application for each

site subject to the requirements of the permit regulations.

Pursuant to 40 CFR 70.5(c)(8)(iii)(C), a compliance schedule is

required for sources out of compliance at the time of permit issuance.

Section 122.132(b)(3)(B) of the Texas permit regulation addresses

compliance schedules but appears to not require that schedules be at

least as stringent as any consent decree or administrative order to

which the source is subject. For full part 70 approval, the State must

revise the permit regulation to be consistent with the part 70

regulation.

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

requirements are provided for in subchapter C of the permit regulation.

The State has requested that the EPA approve the proposed operating

permits program as a source category-limited interim program for a

period of two years. Section (II)(B) of this notice (referring to

options for approval/disapproval and implications) further discusses

the sites subject to the interim approval program and the Texas

rationale for requesting interim approval.

Section 122.241 of the Texas permit regulation requires permit

applications for renewal at least six months prior to the date of

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

of permit expiration. The permit regulation contains criteria for

determining completeness of applications consistent with 40 CFR

70.5(a)(2).

Pursuant to 40 CFR 70.7, the State's program must prohibit a source

from operating after the time that the source is required to submit a

timely and complete application, except in compliance with a permit

issued under a part 70 program. Section 122.138 of the Texas permit

regulation allows an application shield if there is a timely and

complete application for permit issuance, significant permit

modification to a permit, or renewal. The site's failure to have a

Federal operating permit is not a violation until the State takes final

action on the permit. The application shield provided for in 40 CFR

70.7(b) does not apply to significant modifications, but only applies

to a ``complete application for permit issuance (including for

renewal)''. For this reason, section 122.138 of the Texas permit

regulation is inconsistent with 40 CFR 70.7. For full approval, the

Texas permit regulation must be made consistent with the part 70

regulation by deleting the reference in section 122.138 to

``significant permit modification to a permit.''

Sections 122.211-122.213 of the Texas permit regulation contain the

requirements of 40 CFR 70.7(d) for administrative amendments, but do

not require the Administrator's approval for similar changes allowed by

section 122.211. This is inconsistent with 40 CFR 70.7(d)(1)(vi) which

requires that, in order for changes other than those specified in 40

CFR 70.7(d) (i) through (v) to be made as administrative amendments,

they must first be determined by the Administrator, as part of the

approved part 70 program, to be similar to those specified in

70.7(d)(1) (i) through (iv). For full approval, section 122.211 must be

revised to specifically list the types of changes that the State

proposes to be eligible for processing as administrative amendments,

for the Administrator's approval as part of the State's part 70

program. [[Page 30042]]

Sections 122.215-122.217 of the Texas permit regulation requires

certain permit revisions to be processed as ``permit additions''. The

criteria for ``permit additions'' appear to be the same as the Federal

criteria for some types of changes noted under minor permit

modification provisions (40 CFR 70.7) and for some changes allowed as

``off permit'' changes under 40 CFR 70.4(b)(14). The State proposes to

implement the ``permit addition'' criteria in the interest of providing

adequate, streamlined, and reasonable procedures for processing permit

revisions. However, the EPA does not consider the streamlined

procedures set out in sections 122.215-122.217 of the Texas permit

regulation to be equivalent to the minor permit modification procedures

found in the part 70 regulation. For full approval, the permit

additions rule and all other Texas permit revisions rules must be

modified to be consistent with part 70.

The criteria to qualify for permit additions in section 122.215

include the following: A change at a site may qualify as a permit

addition if the change is not addressed or prohibited by the Federal

operating permit, does not violate any existing term or condition of

the Federal operating permit, does not violate any applicable

requirement, and is not a title I modification.

Section 122.215(c) also allows a change at a site to be processed

as a permit addition if the change ``does not require or change a

determination of an emission limitation under section 112(g) or section

112(j) of title I of the Act * * *''. The Federal part 70 regulation

contains a similar provision at 40 CFR 70.7(e)(2)(i)(A)(3) with respect

to minor permit modification procedures, but the Federal provision is

written in general terms to prohibit modifications that change a

``case-by-case'' determination of an emission limitation or standard.

Section 122.215(c) of the Texas permit regulation does not require

case-by-case reasonably available control technology (RACT) changes to

be processed as significant permit modifications. The EPA interprets 40

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

case'' determinations to apply to RACT equivalency determinations.

Therefore, the EPA does not consider the Texas provision to be

equivalent to the part 70 regulation. For full approval, the permit

regulation must be modified consistent with part 70.

Section 122.215(c)(2) of the Texas permit regulation defines

``significant changes to monitoring, reporting or recordkeeping

requirements in the permit.'' The definition includes the ``removal of

monitoring, recordkeeping, or reporting terms and conditions, or a

substitution in those terms and conditions promulgated pursuant to

Federal New Source Performance Standards or National Emission Standards

for Hazardous Air Pollutants.'' This definition of significant changes

to monitoring, reporting or recordkeeping requirements is acceptable

under the current part 70 rule. If any additional rulemaking is

promulgated by the EPA on this subject, the State must change its

definition consistent with the new rulemaking.

Section 122.216 of the Texas permit regulation allows applications

for permit additions to be submitted to the State no later than 90 days

after the owner or operator has obtained or qualified for a

preconstruction authorization. However, under this rule after the

source receives its preconstruction permit, it may make the requested

operating change before submitting the operating permit application

within the 90-day timeframe. 40 CFR 70.7(e)(2)(v) requires that no

operating change be made if a source is changing a term in its original

part 70 permit until the source has submitted the operating permit

revision application. For full approval, the Texas permit regulation

must be revised to be consistent with part 70.

Section 122.217 addresses the procedures used to process permit

additions and states ``the permit addition shall not become final until

after the EPA's 45-day review period at renewal.'' For the EPA to

consider permit additions equivalent to the procedures in 40 CFR

70.7(e)(2), the EPA must have the opportunity to review and object to

the issuance in writing within 45 days of receipt of the proposed

permit. For full approval, the Texas permit regulation must be

consistent with part 70 and allow for timely EPA review.

The Texas permit addition procedures addressed in section 122.217

provide that, within 90 days after receipt of a complete application,

the agency is to determine that the requested modification does not

meet the permit addition criteria and that it should therefore be

reviewed under the significant modification procedure, or the agency is

to revise the draft permit addition and transmit to the EPA the new

proposed permit addition. This section does not include a deadline for

the TNRCC to issue or deny a permit addition modification. The minor

permit modification procedures contained in 40 CFR 70.7(e)(2) require a

State to issue or deny the permit modification within 90 days or 15

days after the end of the Administrator's 45 day review period,

whichever is later. For full approval, the Texas permit regulation must

be consistent with part 70.

Subchapter E of the Texas permit regulation contains the acid rain

provisions, as well as the deadlines for submitting acid rain permit

applications. The provisions and timelines are consistent with those

required by title IV of the Act. Section 122.139 of the Texas permit

regulation regarding action on permit applications and section 122.136

regarding additional information are consistent with 40 CFR 70.4(b)(6)

and 70.7(a)(4).

Pursuant to the part 70 regulation, a permit must be reopened and

revised for cause when an additional applicable requirement becomes

applicable to a permitted site with a remaining permit term of three or

more years. Sections 122.231 and 122.233 of the Texas permit regulation

discuss the criteria and procedures for permit reopenings and meet the

requirements of 40 CFR 70.7(f).

Provisions for public notice have been contained in section 122.153

of the Texas permit regulation and in section 122.202(a)(3) for general

permits. Those sections provide for procedures for public notice and an

opportunity for public comment for all permit issuance proceedings,

including initial permit issuance, significant modifications, renewals,

and initial general permits. 40 CFR 70.7(h) requires the public notice

to include the emissions change involved in any permit modification.

For full approval, the State must revise its permit regulation to be

consistent with part 70.

Provisions for the EPA and affected State review to be accomplished

in an expeditious manner as required by 40 CFR 70.8 have been provided

for in sections 122.310 and 122.311 of the Texas permit regulation.

Section 122.132 of the Texas permit regulation requires the applicant,

rather than the permitting authority, to submit the permit application

directly to the Administrator. This is acceptable and meets the

requirements of 40 CFR 70.8.

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

records for five years. The State did not address this requirement in

the Texas permit regulation. However, the TNRCC is subject to, and must

comply with, the State of Texas Records Retention Schedule that is

approved by the State Auditor's Office and the Texas State Library and

Archives Commission (signed and dated April 7, 1993) requiring permit

files to be maintained for three years after a file is closed. A closed

file is one that is closed, terminated, expired, or settled.

[[Page 30043]] Therefore, records will be maintained for the life of

the permitted facility plus an additional three years. This is

consistent with and meets the requirements of 40 CFR 70.8(a)(3).

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

requirements are contained in sections 122.141-122.145 of the Texas

permit regulation. 40 CFR 70.3(d) requires fugitive emissions from a

part 70 source to be included in the operating permit in the same

manner as stack emissions. The definition of an ``emission unit'' in

section 122.010 of the Texas permit regulation includes fugitive

emissions to be collectively considered as an emission unit. The

operating permit will consolidate already existing federally

enforceable requirements at relevant emission units. This raises the

minor NSR/part 70 integration issue as discussed in section II(A)(2)(a)

above because of the manner in which Texas has defined ``applicable

requirement''. Under 40 CFR 70.3, a permit application must describe

all emissions of regulated air pollutants emitted from any emission

unit, including fugitive emissions from emission units not subject to

an applicable requirement. Because of the issue discussed in section

II(A)(2)(a) of this notice regarding the State's definition of

applicable requirement, the State's operating permit program does not

ensure that this part 70 requirement will be met. For full approval,

Texas must revise the Texas permitting regulation to be consistent with

part 70.

The Texas permit regulation allows for such changes as emission

trading and anticipated operating scenarios provided the permittee

meets the requirements set forth in section 122.221 (operational

flexibility), that the permittee comply with Regulation VI (Control of

Air Pollution by Permits for New Construction or Modification), and

provided the Texas SIP allows it. Regulation VI does not allow for a

facility to ``trade emissions'' without best available control

technology and an impacts review, nor does Regulation VI allow a source

to vary its operating scenario, unless expressly allowed under an

existing preconstruction authorization. The Texas permit regulation has

adequately addressed emission trading and operating scenarios.

40 CFR 70.6(b) requires all terms and conditions of a permit,

including any provisions designed to limit a source's potential to

emit, to be enforceable by the EPA and citizens, unless such terms and

conditions are specifically designated as not federally enforceable.

The State submitted section 122.122 (relating to establishment of

federally enforceable restrictions on potential to emit) as a SIP

revision on September 17, 1993. Section 122.122 establishes a procedure

for grandfathered sources, (i.e. sources exempted from having a State

NSR permit because they were constructed or operated prior to 1971), to

submit a certification to the State that establishes a limit on

potential to emit that is enforceable as a matter of State law. If

section 122.122 is approved by the EPA into the SIP, these limits would

be federally enforceable as well. The EPA is taking no action on

section 122.122 in this notice. A separate action will be taken on the

State's proposed SIP revision at a later date.

On January 25, 1995, the EPA's Office of Air Quality Planning and

Standards issued guidance which, among other things, announced the

availability of a two-year transition period during which a State could

give sources additional options for seeking federally enforceable

limitations on potential to emit. These options allow a source with a

practicably enforceable limit on potential to emit in a State

enforceable permit and/or limitations established by State rule (such

as by certificates of registration issued pursuant to section 122.122),

to certify to the EPA that it accepts the Federal enforceability of

that limit for the duration of the transition period. Certifications

developed pursuant to section 122.122 will serve as the basis for

exercise of this transition policy, provided Texas wishes to exercise

this option, and an acceptable certification process is developed

between Texas and the EPA addressing the source's acceptance of Federal

enforceability.

40 CFR 70.4 requires the State to issue permits for a fixed term of

five years in the case of permits for acid rain and all other permits

for a period not to exceed five years. 40 CFR 70.4(b)(3)(iv) provides

that permits issued for solid waste incineration units combusting

municipal waste subject to provisions under section 129(e) of the Act

can have a fixed permit term of twelve years. Rather than making the

distinction between five and twelve years, section 382.0543(a) of the

Texas Clean Air Act provides that an operating permit is subject to

renewal at least every five years. This approach for solid waste

incineration units combusting municipal waste is acceptable and meets

the requirements of the part 70 regulation. The Texas permit regulation

does not, however, limit the general permit term to a maximum of five

years. For full approval, the State of Texas must revise the general

permit term to be consistent with part 70.

Temporary sources, as allowed by 40 CFR 70.6(e), are provided for

in section 122.204 of the Texas permit regulation. This section meets

the requirements of the part 70 regulation.

The concept of a permit shield is discussed in 40 CFR 70.6(f) as a

means by which States could allow an enforcement shield as a permit

provision, provided certain criteria were met. The State determined

that the permit shield was too broad in scope and too difficult to

apply properly. Therefore, the State chose not to include the permit

shield as described in the part 70 regulation. Instead, the State

adopted section 122.145(e) through which the State intends to provide

for an enforcement shield in those situations where the interpretation

of a rule is required and may be subject to change.

The EPA believes the intent of the rule is worthy, but is concerned

about its ambiguities. Therefore, the EPA believes it can not go

forward with a final action granting interim approval to the State of

Texas unless the EPA receives a written commitment from the board of

the TNRCC or designee agreeing to process any actions taken pursuant to

section 122.145(e) as follows: (1) The interpretation made pursuant to

section 122.145(e) shall be limited to applicability issues only; (2)

the EPA shall have the opportunity to review and veto every section

122.145(e) action; and (3) the interpretation will be based upon the

most current EPA guidance, and any guidance developed by the TNRCC must

be in writing and preapproved by the EPA. Additionally, for full part

70 approval, the TNRCC must revise section 122.145(e) of the Texas

permit regulation to reflect the three previous provisions.

Emergency provisions are provided for in 40 CFR 70.6(g). Section

122.143 of the Texas permit regulation references chapter 101 (General

Rules), which contains notification requirements for major upsets.

Under this chapter, the owner or operator of a facility must notify the

Executive Director of the TNRCC as soon as possible of any major upset

condition which causes or may cause an excessive emission that

contravenes the intent of the statute or the regulations. In the event

that the information required in the notification is unknown at the

time of the initial notification, then such information must be

provided as soon as possible, and submitted as a written report no

later than two weeks from the onset of the upset condition. This

allowance for time of agency notification by the permittee is

[[Page 30044]] inconsistent with the part 70 regulation. 40 CFR

70.6(g)(3) requires the permittee to submit notice of the emergency to

the permitting authority within two working days. For full approval,

the Texas permitting rule must be consistent with the part 70

regulation.

The part 70 regulation requires an operating permits program to

allow for operational flexibility. 40 CFR 70.4(b)(12) allows for

``section 502(b)(10) changes without requiring a permit revision, if

the changes are not modifications under any provision of title I of the

Act and the changes do not exceed emissions allowable under the

permit.'' ``Section 502(b)(10) changes'' are not defined or included in

the Texas permit regulation; therefore, it is not clear what types of

changes can be processed through the State's operational flexibility

provision. Section 122.221 of the Texas permit regulation could be

interpreted to allow changes which violate what the EPA considers an

applicable requirement. This is inconsistent with the definition of

``Section 502(b)(10) changes'' in the part 70 regulation. Therefore,

for full approval, the State must revise its permit regulation such

that the definition of ``Section 502(b)(10) changes'' is consistent

with part 70.

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

122.215 of the Texas permit regulation defines off-permit changes under

part 70 as changes which qualify as permit additions. Because of the

State's narrow definition of applicable requirement, some changes which

would be allowed as ``off-permit'' changes under the Texas rule would

not be considered ``off-permit'' under the Federal definition of

changes which can be made without a permit revision under 40 CFR

70.4(b)(14). Section (II)(A)(2)(a) of this notice identifies issues

regarding the definition of applicable requirement that must be

addressed prior to full approval.

3. Permit Fee Demonstration

In the fee regulation, the State proposes to charge an emission fee

for sources subject to title V in Fiscal Year 1994 (FY 1994) and FY

1995 equivalent to at least the part 70 presumptive minimum fee of $25

per ton of regulated air pollutants, adjusted per the consumer price

index (CPI). The emission fee rate for FY 1994 is set at $25 per ton of

regulated pollutants including carbon monoxide (CO). Texas does not

charge fees above the 4,000 ton per year cap. The State will collect

$40 million per year to support all applicable part 70 activities. The

generation of $40 million in revenue, if CO emissions were excluded,

corresponds to an average of $30.77 per ton of regulated pollutants.

This average rate is above the presumptive minimum adjusted by the CPI.

The emission fee rate for FY 1995 averages $26 per ton of criteria

pollutants including the collection for CO emissions. The fee rate will

be reviewed in early calendar year 1995 and every two years thereafter.

The fee review will account for projected CPI adjustment, additional

staffing needs, and/or emission reductions that may require increasing

the fee rate.

Pursuant to 40 CFR 70.4(b)(8), the State must include in the fee

demonstration an estimate of the permit program costs for the first

four years after approval and a plan detailing how the State plans to

cover these costs. The EPA has received the TNRCC FY 1994 and FY 1995

operating budget. Since the EPA has not received a complete four year

projection, this will be required for full approval.

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

The State of Texas request for approval of a part 70 program also

serves as a request for approval of the State's rulemaking process as a

mechanism to gain delegation, when requested by the State for a

particular standard, of unchanged section 112 standards under the

authority of section 112(l). At this time, the State plans to use the

mechanisms of adoption-by-reference and case-by-case adoption to adopt

unchanged Federal section 112 requirements into its regulations. The

State of Texas may, at any time, exercise its option to request, under

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

the form of State regulations which the State demonstrates are

equivalent to the corresponding section 112 provisions promulgated by

the EPA. The State will receive delegation of those remaining standards

and programs through the section 112(l) delegation process.

The radionuclide NESHAP is a section 112 regulation and therefore

also an applicable requirement under the State operating permits

program for part 70 sources. There is not yet a Federal definition of

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

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

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

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

70 for another reason, thus requiring a part 70 permit. The EPA will

work with the State in the development of its radionuclide program to

ensure that permits are issued in a timely manner.

Texas has demonstrated in its operating permits program submittal

adequate legal authority to implement and enforce all section 112

requirements through the title V permit. This legal authority is

contained in Texas enabling legislation and in regulatory provisions

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

incorporate all applicable requirements. The EPA has determined that

this legal authority is sufficient to allow Texas to issue permits that

assure compliance with all section 112 requirements.

The State of Texas will pursue delegation of rules and programs, as

appropriate, to implement and enforce the existing and future

requirements of sections 111, 112, and 129 of the Act, and all MACT

standards promulgated in the future, in a manner consistent with State

law, to ensure all applicable requirements of part 70 are met.

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

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

reconstruct, or modify any major source of hazardous air pollutants

unless the State determines that the MACT emission limitation under

section 112(g) will be met. The EPA has announced its interpretation of

the Act in the Federal Register (see 60 FR 8333, February 14, 1995)

(hereafter Interpretive Notice). The Interpretive Notice postpones the

effective date of section 112(g) until after the EPA has promulgated a

final rule addressing that provision. The rationale for the revised

interpretation was explained in detail in the Interpretive Notice.

The Interpretive Notice explains that the EPA is still considering

whether the effective date of section 112(g) should be delayed beyond

the date of promulgation of the Federal rule to allow States time to

adopt rules implementing the Federal rule. If a decision is made to

allow such additional delay in the implementation of section 112(g),

the EPA will announce that decision in the final section 112(g)

rulemaking.

The State of Texas adopted, and incorporated by reference, the

provisions of 40 CFR part 72 in effect on the date of this action for

purposes of implementing an acid rain program that meets the

requirements of title IV of the Act. It is the EPA's position that this

State program meets the requirements of the Federal acid rain program.

5. Enforcement Provisions

40 CFR part 70 requires each operating permit program to provide

enforcement authority to address [[Page 30045]] violations of program

requirements by permitted sources. The Texas enforcement provisions are

contained in the Texas Clean Air Act (TCAA) and are discussed in the

Attorney General's Opinion. Pursuant to 40 CFR 70.11(a)(3)(ii), the

permitting authority shall have the authority to recover penalties

against any person who knowingly violates any applicable requirement,

any permit condition, or any fee or filing requirement. These fees

shall be recoverable in a maximum amount of not less than $10,000 per

day per violation. The TCAA contains provisions which exceed the

$10,000 per day per violation for all cases except for the filing fee

criminal enforcement provision. This filing fee provision contained in

section 382.092 of the TCAA imposes a penalty for failing to pay a

required fee which is punishable ``for an individual by a fine of not

more than twice the amount of the required fee, confined in jail not to

exceed 90 days, or both fine and confinement and, for a corporation or

association, by a fine of not more than twice the amount of the

required fee.'' The preamble to part 70 regulation recommends that

State enforcement authorities consider as criminal penalties not only

fines, but also incarceration, so that State prosecutors will have more

inducement to prosecute environmental crimes. Because this provision

imposes a range of fines, confinement in jail, and imprisonment, the

EPA is proposing to accept that the TCAA meets the criminal enforcement

provisions of part 70. The EPA believes the filing fee provision

achieves the goal and intent of 40 CFR part 70. The EPA is soliciting

comments on the proposed position.

Texas' operating permits program submittal adequately addressed the

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

1 and the supplemental volume. The submittal contains permit program

documentation such as draft copies of the permit forms, application

forms, public notice forms, certification forms, and compliance/

enforcement reporting forms. Monitoring requirements are contained in

this guidance material including the types of monitoring used to

demonstrate compliance. However, this guidance may be subject to change

once the part 64 enhanced monitoring rules are promulgated. The

enforcement program is described in the document ``Guidance on

Compliance and Enforcement Matters'' found in attachment IV of the

State's submittal. Volume 1 contains a complete description of the

State's compliance tracking and enforcement program which includes an

agreement between the State and the EPA, entitled ``Fiscal Year 1993

Memorandum of Understanding between the Texas Air Control Board and the

U.S. Environmental Protection Agency.''

6. Summary

The State of Texas submitted to the EPA its operating permits

program, requesting the EPA to grant interim approval to the Texas

operating permits program. The submittal has been reviewed for adequacy

to meet the requirements of 40 CFR part 70 (1992). The results of this

review are included in the technical support document, which will be

available at the docket at the locations noted above. The submittal has

adequately addressed all 11 elements required for interim approval as

discussed in the part 70 regulation. However, the EPA has in this

notice described inconsistencies between the Texas permit regulation

and the part 70 regulation. These inconsistencies involve both the

permit regulation and program implementation, with regard to

applicability, permit application requirements, and permit issuance and

revision. It is essential that these inconsistencies be remedied by the

State consistent with the Act and 40 CFR part 70 prior to the EPA

granting full approval of the State's operating permits program.

Due to pending litigation involving sections of 40 CFR part 70, the

part 70 regulation may be revised. Any final revisions may require the

State to make regulatory and statutory changes.

The State of Texas addressed all requirements necessary to receive

interim approval of the State operating permits program pursuant to

title V, 1990 Amendments and part 70 (1992).

B. Options for Approval/Disapproval and Implications

Pursuant to 40 CFR 70.4(d), Texas requested that the EPA approve

the Texas Operating Permits Program as a source category-limited

interim program for a period of two years. The EPA is proposing to

grant interim approval to the operating permits program submitted by

Texas on November 15, 1993, for a period of two years.

Volume 1 of the Texas operating permits program submittal includes

the rationale for requesting interim approval. The State projects that

over 3,000 major sources will be subject to the operating permits

program. Many of these sources are complex. The EPA recognizes that a

large percentage of the Nation's title V sources will be permitted by a

single agency and that a ramp-up period is essential. The time

following interim approval will allow the State to hire additional

engineers and train experienced engineers to write quality permits that

consolidate all applicable requirements into one document. Furthermore,

the additional time is necessary to develop a computer information

management system that will manage the permits, permit applications,

and additional documentation. This computer system will be the

mechanism used to interchange information between the TNRCC, the EPA,

the affected States, the regulated community, and the general public.

Such a database will give interested parties an efficient mechanism to

review the current applicable requirements and the compliance status of

a source. The EPA is satisfied that the State has demonstrated

compelling reasons for a source category-limited interim approval.

Between the interim program and the full program, the transition

schedule requires the State to take final action on applications for

400 sites each of the first two years, 1,000 sites the third year, and

600 sites each of the last two years. Therefore, it is projected that

60 percent of the sources required to obtain operating permits will

obtain those permits in the first three years of the program.

State-specific circumstances preclude the TNRCC from demonstrating

coverage of sources which are responsible for at least 80 percent of

the aggregate emissions during the interim period. The State will be

required to permit complex stationary sources such as refineries and

petrochemical plants. These complex plants can have as many as 3,000

emission units per source. The State's rationale for requesting interim

approval is to permit these complex sources toward the end of the

permit issuance period (rather than during the first two years). The

State designed the interim program to bring in similar types of sources

and those which have the fewest number of emission points. This will

enable the State to spend its resources on writing quality permits that

are federally enforceable. The EPA is confident that the State is

addressing enough sources in those first three years to represent a

significant portion of the program.

III. Proposed Rulemaking Action

In this action, the EPA is proposing source category-limited

interim approval of the operating permits program submitted by the

State of Texas. The program was submitted by the State to the EPA for

the purpose of complying with Federal requirements [[Page 30046]] found

in title V of the Act and in 40 CFR part 70, which mandate that States

develop, and submit to the EPA, programs for issuing operating permits

to all major stationary sources, and to certain other sources with the

exception of Indian Lands.

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

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

for delegation of Federal section 112 standards as they apply to part

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

adequate authorities, adequate resources for implementation, and an

expeditious compliance schedule, which are also requirements under 40

CFR part 70. Therefore, as part of this interim approval, the EPA is

also proposing to grant approval under section 112(l)(5) and 40 CFR

63.91 of the State's mechanism for receiving delegation of section 112

standards that are unchanged from Federal standards as promulgated when

requested by the State. The State will receive delegation of the

remaining standards through other section 112(l) delegation processes.

The EPA has reviewed this submittal of the Texas operating permits

program and is proposing source category-limited interim approval for a

period of two years. Certain defects in the State's permit regulation

and program implementation preclude the EPA from granting full approval

of the State's operating permits program at this time. The EPA is

proposing to grant interim approval, subject to the State obtaining the

needed regulatory and program implementation revisions within 18 months

after the Administrator's approval of the Texas title V program

pursuant to 40 CFR 70.4.

IV. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

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

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

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

complete file of all the information submitted to, or otherwise

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

approval. The principal purposes of the docket are:

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

documents so that they can effectively participate in the approval

process, and

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

consider any comments received by July 7, 1995.

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 permit 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

Administrative practice and procedure, Air pollution control,

Environmental protection, Intergovernmental relations, Operating

permits, and Reporting and recordkeeping requirements.

VI. Miscellaneous

A. Interim Approval

Proposed interim approval of the part 70 operating permits program

for the State of Texas.

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

Dated: May 3, 1995.

A. Stanley Meiburg,

Deputy Regional Administrator (6D).

[FR Doc. 95-13926 Filed 6-6-95; 8:45 am]

BILLING CODE 6560-50-P