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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[ND-001; FRL-5254-8]

Clean Air Act Final Interim Approval of Operating Permits

Program; State of North Dakota

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

-----------------------------------------------------------------------

SUMMARY: The EPA is promulgating final interim approval of the

Operating Permits Program submitted by the State of North Dakota 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: August 7, 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

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 April 28, 1995 EPA published a Federal Register notice proposing

interim approval of the Operating Permits Program for the State of

North Dakota. See 60 FR 20941. EPA received adverse comments on the

proposed interim approval, which are addressed below, and is taking

final action to promulgate interim approval of the North Dakota

PROGRAM.

[[Page 35336]]

II. Final Action and Implications

A. Analysis of State Submission

The Governor of North Dakota submitted an administratively complete

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

Dakota on April 28, 1994. The North Dakota PROGRAM, including the

operating permit regulations (Article 33-15, Section 33-15-14-06, of

the North Dakota Administrative Code--Air Pollution Control Rules

(NDAC)), substantially meets the requirements of 40 CFR 70.2 and 70.3

with respect to applicability; Secs. 70.4, 70.5, and 70.6 with respect

to permit content including operational flexibility; Sec. 70.5 with

respect to complete application forms and criteria which define

insignificant activities; Sec. 70.7 with respect to public

participation and minor permit modifications; and Sec. 70.11 with

respect to requirements for enforcement authority.

EPA's comments noting deficiencies in the North Dakota PROGRAM were

sent to the State in a letter dated December 22, 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 January 5, 1995. The State submitted

these corrective actions in letters dated February 22, March 20, and

June 13, 1995. EPA has reviewed these corrective actions and has

determined them to be adequate to allow for interim PROGRAM approval.

B. Response to Comments

The comments received on the April 28, 1995 Federal Register notice

proposing interim approval of the North Dakota PROGRAM, and EPA's

response to those comments, are as follows:

Comment #1: One commenter stated that they supported granting

interim approval of the State's PROGRAM. However, the commenter also

indicated a concern regarding EPA's requirement that the State lower

proposed insignificant emission levels, listed in subsection 33-15-14-

06.4.c of the NDAC, to ``more reasonable'' levels prior to full PROGRAM

approval. The commenter stated that, because the State's insignificant

exemption is based on the emission rate, rather than size or production

rate, and the regulation requires listing all emission units claiming

the exemption in the permit application, subsection 33-15-14-06.4.c of

the NDAC merely grants the applicant relief from additional

administrative burdens imposed on major sources. The commenter urges

EPA to reconsider its position when evaluating the PROGRAM for full

approval.

EPA Response: EPA does not consider this an adverse comment for

granting interim approval of the State's PROGRAM. However, for full

PROGRAM approval, EPA continues to believe that the insignificant

emission levels that North Dakota set for the listed air contaminants

(emission levels set at approximately 25% of the Prevention of

Significant Deterioration (PSD) major modification significant levels)

are too high to be considered reasonable levels for exempting those

emission units from Title V operating permit requirements. A

determination of what level of emissions is appropriate for these types

of exemptions is best performed based on a consideration of the size of

the emissions thresholds relative to the major source threshold

applicable in various areas of North Dakota. Emissions of 25% of the

PSD major modification significance levels are not clearly

insignificant. Also, EPA is concerned that a source could have numerous

emission units that emit less than the levels the State has set as

insignificant and would subsequently be excluded from the majority of

Title V permit requirements, even though the total emissions from all

such insignificant emission units may be greater than the major

modification significance levels or even greater than the major source

threshold. Consequently, EPA continues to believe that the State must

lower its insignificant emission levels for non-HAP units to a more

reasonable level.

Comment #2: One commenter stated that the North Dakota PROGRAM

jurisdiction should be consistent with existing treaties, court

decisions, applicable statutes, and Indian and non-Indian historical

activity which may have a bearing on jurisdiction. The commenter

referenced specific U.S. Supreme Court cases and indicated belief that

State-tribal jurisdictional questions should be decided in federal

court and not by EPA ``whose expertise is environmental and not

jurisdictional.''

EPA Response: Under Title V of the Act and the part 70 implementing

regulations, it is incumbent upon EPA to determine whether a given

State has the authority to implement a part 70 operating permits

program for affected sources before granting approval of the State's

PROGRAM. Specifically, the Act gives EPA regulatory authority ``to

establish the minimum elements of a permit program to be administered

by any air pollution control agency.'' See Sec. 502(b) of the Act. The

Act further provides that these minimum elements must include ``[a]

requirement that the permitting authority have adequate authority to *

* * issue permits and assure compliance by all sources required to have

a permit under [Title V] with each applicable standard, regulation or

requirement under [the Act].'' See section 502(b)(5) of the Act; 40 CFR

70.4(b)(3)(i).

Because EPA has the responsibility to ensure that a State has

adequate authority over sources affected by its Title V program, EPA

must make judgments about the scope of a State's legal authority,

including its jurisdictional reach over affected sources. EPA also has

the responsibility to address whether Tribes may administer Clean Air

Act programs and, if not, to establish other means by which EPA will

directly administer such programs. See sections 301(d) and 110(o) of

the Act; 59 FR 43956 (August 25, 1994).

North Dakota has not specifically asserted jurisdiction over air

pollution sources located within Indian Country in either its PROGRAM

submittal or its comments on EPA's proposed interim approval. The

Program Description that the State submitted to EPA as part of its

PROGRAM specifically indicated that the State was not seeking approval

to operate the PROGRAM on Indian Reservations. Thus, as EPA indicated

in its notice of proposed interim approval, EPA is not presently

deciding whether the State of North Dakota has jurisdiction over

sources within Indian Country. Should North Dakota choose to seek

PROGRAM approval over additional sources located in other areas, it may

do so without prejudice. Any EPA decision regarding State or Tribal

jurisdiction will necessarily be informed by relevant law, including

the applicable provisions of the Act and implementing regulations, and

other applicable Federal law.

C. Final Action

The EPA is promulgating interim approval of the Operating Permits

Program submitted by the State of North Dakota on April 28, 1994. The

State must complete the following corrective actions to receive full

PROGRAM approval: (1) The State must revise sub-section 33-15-14-06.4.c

of the NDAC to lower the insignificant emissions unit threshold for

criteria pollutants to more reasonable levels. (2) In order to

implement sub-section 33-15-14-06.5.a.(1)(c) of the NDAC, the State

must adopt specific provisions which detail

[[Page 35337]]

how to determine that an alternative emission limit is equivalent to

that in the SIP, and EPA must approve the provisions as part of the

SIP. Until this can be accomplished, the State must delete the words

``or this article'' from the first line of sub-section 33-15-14-

06.5.a.(1)(c) of the NDAC. (3) Sub-section 33-15-14-06.5.a.(11) of the

NDAC must be revised to state that changes in emissions are allowed by

this sub-section provided that they are not modifications under title I

of the Act and the changes do not exceed the emissions allowed under

the permit. (4) The State must revise sub-section 33-15-14-06.5.f.(1)

of the NDAC to read ``* * * the department shall include in a title V

permit to operate a provision stating that compliance with the

conditions of the permit shall be deemed compliance with any applicable

requirements as of the date of permit issuance * * *.'' (5) The State

must delete ``or this article'' from sub-section 33-15-14-06.5.a.(8) of

the NDAC, and ``this article'' from sub-sections 33-15-14-06.5.a.(10)

and 33-15-14-06.6.e.(1)(a)[2] of the NDAC to clarify that, in order to

implement these provisions, the State must have an economic incentives,

marketable permits or generic emissions trading program approved in its

SIP. (6) The Attorney General's opinion, that was part of the PROGRAM

submittal, does not cite to relevant State laws or regulations or to

State case law, and, instead of discussing the provisions of North

Dakota laws, largely discusses Federal regulations. The opinion should

discuss and reference North Dakota law which ensures that the

provisions for judicial review in North Dakota Century Code (N.D.C.C.)

Chapter 28-23-14 and 15 and in NDAC Article 33-22 are the exclusive

means for obtaining judicial review of the terms and conditions of

permits and that petitions for judicial review must be filed within the

90-day periods discussed in 40 CFR 70.4(b)(3)(xii). The State must

augment the Attorney General's opinion, providing discussion of and

citation to case law, statutes, and regulations which address the

requirements of 40 CFR 70.4(b)(3)(xii), or, if such an opinion cannot

be rendered, the State must change its statutes and/or regulations to

ensure that the requirements of 40 CFR 70.4(b)(3)(xii) are met. (7) The

State must augment the Attorney General's opinion, providing discussion

of and citation to case law and/or specific statutory or regulatory

provisions which provide for judicial review in cases of State

inaction, consistent with the requirements of 40 CFR 70.4(b)(3)(xi),

or, if such an opinion cannot be rendered, the State must change its

statutes and/or regulations to ensure that the requirements of 40 CFR

70.4(b)(3)(xi) are met. (8) The Attorney General's opinion states that

State law provides civil and criminal enforcement authority consistent

with 40 CFR 70.11. EPA was unable to determine from the opinion whether

North Dakota's PROGRAM is consistent in all respects with 40 CFR 70.11,

and in particular with the requirement for maximum fines of not less

than $10,000 per day per violation. The State must augment the opinion,

providing citation to and discussion of case law indicating that the

PROGRAM meets the penalty requirements contained in 40 CFR 70.11, or,

if such an opinion cannot be rendered, the State must change its

statutes and/or regulations to ensure that the requirements of 40 CFR

70.11 are met.

Evidence of these corrective actions for full PROGRAM approval must

be submitted to EPA within 18 months of EPA's interim approval of the

North Dakota PROGRAM.

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 North Dakota's PROGRAM that EPA is approving in this

notice would apply to all part 70 sources (as defined in the PROGRAM)

within the State, except the following: any sources of air pollution

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

the Fort Berthold, Fort Totten, Standing Rock, Sisseton and Turtle

Mountain Indian Reservations, or any other sources of air pollution

over which an Indian Tribe has jurisdiction. See, e.g., 59 FR 55813,

55815-55818 (Nov. 9, 1994). The term ``Indian Tribe'' is defined under

the Act as ``any Indian Tribe, band, nation, or other organized group

or community, including any Alaska Native village, which is Federally

recognized as eligible for the special programs and services provided

by the United States to Indians because of their status as Indians.''

See section 302(r) of the CAA; see also 59 FR 43955, 43962 (Aug. 25,

1994); 58 FR 54364 (Oct. 21, 1993).

In proposing not to extend the scope of North Dakota's PROGRAM to

sources located in ``Indian Country,'' EPA is not making a

determination that the State either has adequate jurisdiction or lacks

jurisdiction over such sources. Should the State of North Dakota choose

to seek PROGRAM approval within ``Indian Country,'' it may do so

without prejudice. 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, that

such approval would constitute sound administrative practice, and that

those sources are not subject to the jurisdiction of any Indian Tribe.

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

until August 7, 1997. During this interim approval period, the State of

North Dakota is protected from sanctions, and EPA is not obligated to

promulgate, administer and enforce a Federal operating permits program

in the State of North Dakota. 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 North Dakota fails to submit a complete corrective

PROGRAM for full approval by February 7, 1997, EPA will start an 18-

month clock for mandatory sanctions. If the State of North Dakota 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 North Dakota 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 North Dakota, both sanctions under section 179(b) will

apply after the expiration of the 18-month period until the

Administrator determines that the State of North Dakota has come into

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

sanction, the State of North Dakota still has not submitted a

corrective PROGRAM that EPA has found complete, a second sanction will

be required.

If EPA disapproves the State of North Dakota'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 North Dakota has

submitted a revised PROGRAM and EPA has determined

[[Page 35338]]

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 North Dakota, both sanctions under section 179(b) shall

apply after the expiration of the 18-month period until the

Administrator determines that the State of North Dakota has come into

compliance. In all cases, if, six months after EPA applies the first

sanction, the State of North Dakota 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 North Dakota 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 North Dakota

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 North Dakota 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

and non-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 North Dakota's construction

permitting program found in section 33-15-14-02 of the State's

regulations under the authority of title V and part 70 solely for the

purpose of implementing section 112(g) during the transition period,

discussed in section II.A.4.b. of the notice proposing interim approval

of the North Dakota PROGRAM, to meet the requirements of section

112(g). Since the approval would be for the single purpose of providing

a mechanism to implement section 112(g) during the transition period,

the approval would 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. Also, since the approval

would be for the limited purpose of allowing the State sufficient time

to adopt regulations, EPA is limiting the duration of the approval to

12 months following promulgation by EPA of its section 112(g) rule.

North Dakota's construction permitting program allows permit

requirements to be established for all air contaminants (which is

defined in section 33-15-01-04 of the NDAC and includes all of the

hazardous air pollutants (HAPs) listed in section 112(b) of the Act).

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.

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: June 26, 1995.

Jack W. 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 North

Dakota in alphabetical order to read as follows:

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

Permits Programs

* * * * *

North Dakota

(a) North Dakota State Department of Health and Consolidated

Laboratories--Environmental Health Section: submitted on May 11, 1994;

effective on August 7, 1995; interim approval expires August 7, 1997.

(b) [Reserved].

[FR Doc. 95-16755 Filed 7-6-95; 8:45 am]

BILLING CODE 6560-50-P