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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[CO-001; FRL-5143-5]

Clean Air Act Final Interim Approval of Operating Permits

Program; State of Colorado

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: The EPA is promulgating interim approval of the Operating

Permits Program submitted by the State of Colorado 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: February 23, 1995.

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

information used in developing the final interim approval are available

for inspection during normal business hours at the following location:

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

500, Denver, Colorado 80202.

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

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

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

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

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

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

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

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

1993, and that EPA act to approve or disapprove each program within 1

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 2 years.

If EPA has not fully approved a program by 2 years after the November

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

and implement a Federal program.

On October 14, 1994, EPA published a Federal Register document

proposing interim approval of the Operating Permits Program for the

State of Colorado (PROGRAM). See 59 FR 52123. The EPA received adverse

comments on this proposed interim approval, which are summarized and

addressed below. In this rulemaking EPA is taking final action to

promulgate interim approval of the Colorado PROGRAM.

II. Final Action and Implications

A. Analysis of State Submission

The Governor of Colorado submitted an administratively complete

title V Operating Permit Program for the State of Colorado on November

5, 1993. The Colorado PROGRAM, including the operating permit

regulations (part C of Regulation No. 3), substantially meets the

requirements of 40 CFR 70.2 and 70.3 with respect to applicability; 40

CFR 70.4, 70.5, and 70.6 with respect to permit content including

operational flexibility; 40 CFR 70.5 with respect to complete

application forms and criteria which define insignificant activities;

40 CFR 70.7 with respect to public participation and minor permit

modifications; and 40 CFR 70.11 with respect to requirements for

enforcement authority.

Comments noting deficiencies in the Colorado PROGRAM were sent to

the State in a letter dated April 8, 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 deficiencies

that require corrective action prior to interim PROGRAM approval in a

letter dated May 12, 1994, and subsequently held a public hearing to

consider and finalize these changes on August 18, 1994. EPA has

reviewed these changes and has determined that they are adequate to

allow for interim approval. One issue noted in the April 8th letter

related to insignificant activities that requires further corrective

action prior to full PROGRAM approval is discussed below in section C

``Final Action.'' An additional deficiency that requires corrective

action prior to full PROGRAM approval regarding the implementation of

section 112(r) of the Act is also discussed below in section C ``Final

Action.''

B. Response to Comments

The comments received on the October 14, 1994 Federal Register

document proposing interim approval of the Colorado PROGRAM, and EPA's

response to those comments, are as follows:

Comment #1: The commenter objected to EPA's proposed approval of

Colorado's preconstruction permitting program for purposes of

implementing section 112(g) of the Act during the transition period

between PROGRAM approval and adoption of a State rule implementing

EPA's section 112(g) regulations. The commenter argued that there is no

legal basis for delegating to Colorado the section 112(g) program until

EPA has promulgated a section 112(g) regulation and the State has a

section 112(g) program in place. In addition, the commenter argued that

the Colorado PROGRAM fails to address critical threshold questions of

when an emission increase is greater than de minimis and when, if it

is, it has been offset satisfactorily.

EPA Response: EPA disagrees with the commenter's contention that

section 112(g) cannot take effect until after EPA has promulgated

implementing regulations. The statutory language in section 112(g)(2)

prohibits the modification, construction, or reconstruction of a

hazardous air pollutant (HAP) source after the effective date of a

title V program unless a Maximum Achievable Control Technology (MACT)

standard (determined on a case-by-case basis, if

[[Page 4564]] necessary) is met. The plain meaning of this provision is

that implementation of section 112(g) is a title V requirement of the

Act and that the prohibition takes effect upon EPA's approval of the

State's PROGRAM regardless of whether EPA or a state has promulgated

implementing regulations.

The EPA has acknowledged that states may encounter difficulties

implementing section 112(g) prior to the promulgation of final EPA

regulations and has provided guidance on the 112(g) process (see April

13, 1993 memorandum entitled, ``Title V Program Approval Criteria for

Section 112 Activities'' and June 28, 1994 memorandum entitled,

``Guidance for Initial Implementation of Section 112(g),'' signed by

John Seitz, Director of the Office of Air Quality Planning and

Standards). In addition, EPA has issued guidance, in the form of a

proposed rule, which may be used to determine whether a physical or

operational change at a source is not a modification either because it

is below de minimis levels or because it has been offset by a decrease

of more hazardous emissions. See 59 FR 15004 (April 1, 1994). EPA

believes the proposed rule provides sufficient guidance to Colorado and

their sources until such time as EPA's section 112(g) rulemaking is

finalized and subsequently adopted by the State.

The EPA is aware that Colorado lacks a program designed

specifically to implement section 112(g). However, Colorado does have a

preconstruction review program that can serve as a procedural vehicle

for establishing a case-by-case MACT or offset determination and making

these requirements federally enforceable. The EPA wishes to clarify

that Colorado's preconstruction review program may be used for this

purpose during the transition period to meet the requirements of

section 112(g).

Note that in the notice of proposed interim approval of Colorado's

PROGRAM, EPA referred to part B of Colorado Regulation No. 3 as the

location of Colorado's preconstruction permitting program. While this

is the correct citation in Colorado's current version of Regulation No.

3 (which was recently revised and reorganized), EPA has not yet

approved the recent revisions and reorganization as part of the State

Implementation Plan (SIP). However, EPA has approved the State's

preconstruction permitting program as part of the SIP under the

previous organization of Regulation No. 3, and EPA believes Colorado's

preconstruction permitting program is adequate to meet the requirements

of section 112(g). Specifically, section III.A.1. of the EPA-approved

version of Regulation No. 3 requires that a preconstruction permit be

obtained for construction or modification of a stationary source.

``Stationary source'' is defined in Colorado's Common Provisions

Regulation as ``any building, structure, facility, or

installation...which emits any air pollutant regulated under the

Federal Act.'' ``Air pollutant'' is defined very broadly by the State

and would consequently include all HAPs. Thus, the State has adequate

authority to issue preconstruction permits to new and modified sources

of HAPs and, because the State's preconstruction permitting program has

been approved as part of the SIP, these permits would be considered

federally enforceable.

Another consequence of the fact that Colorado lacks a program

designed specifically to implement 112(g) is that the applicability

criteria found in its preconstruction review program may differ from

the criteria in section 112(g). EPA will expect Colorado to utilize the

statutory provisions of section 112(g) and the proposed rule as

guidance in determining when case-by-case MACT or offsets are required.

As noted in the June 28, 1994 guidance, EPA intends to defer wherever

possible to a State's judgement regarding applicability determinations.

This deference must be subject to obvious limitations. For instance, a

physical or operational change resulting in a net increase in HAP

emissions above 10 tons per year could not be viewed as a de minimis

increase under any interpretation of the Act. In such a case, the EPA

would expect Colorado to issue a preconstruction permit containing a

case-by-case determination of MACT.

Comment #2: The commenter asserted that Colorado has authority to

issue preconstruction permits only to sources of HAPs that are

components of criteria pollutants, such as PM-10 and volatile organic

compounds (VOCs).

EPA Response: EPA disagrees with this assertion. As described

above, EPA believes the State's preconstruction permitting program

requires permits for all new and modified sources of HAPs. The

exemptions to the construction permitting requirements in section

III.D. of the EPA-approved version of Regulation No. 3 support this

claim, in that many of the exemptions specifically clarify that the

construction permit exemptions do not apply to HAPs, and HAPs are

defined in the Common Provisions Regulation as including all of those

pollutants listed in section 112(b) of the Act. Therefore, EPA believes

that, until the 112(g) rule has been promulgated and adopted by the

State, the State has the authority to issue preconstruction permits to

all new and modified major sources of HAPs.

Comment #3: Two commenters expressed concern with the EPA proposal

to consider Colorado's law (S.B. 94-139) preventing the admission of

voluntary environmental audit reports as evidence in any civil,

criminal or administrative proceeding as ``wholly external'' to

Colorado's PROGRAM and asserted that these provisions are consistent

with congressional intent and EPA policy, and the Federal Government

should not interfere in the State's interpretation and exercise of its

own prosecutorial discretion. In addition, one commenter also stated

that, absent the audit privilege, it would be unlikely that voluntarily

disclosed information would be identified and further indicated that,

although title V may be delegated by EPA, such delegation does not

preempt or require the State to defend its laws to EPA.

EPA Response: EPA did not identify this as an approval issue and

stated that it is not clear at this time what effect this privilege

might have on title V enforcement actions. A national position on

approval of environmental programs in states which adopt statutes that

confer an evidentiary privilege for environmental audit reports is

being established by EPA. Further, EPA disagrees with the commenter's

interpretation of congressional intent and EPA policy. Congressional

intent was to encourage owners and operators to do self-auditing and

correct any problems expeditiously, but this is not the same as

providing an evidentiary privilege and enforcement shield. Congress

could have provided such a privilege and shield in the Act, but did

not. Section 113 of the Act and title V contain no exceptions for

withholding self-auditing reports as evidence in any enforcement

proceeding. Likewise, 40 CFR part 70 contains no such exceptions. Also,

EPA disagrees with the commenter's assumption that, absent the audit

privilege provided by Colorado law, it is unlikely that voluntarily

disclosed information would otherwise be identified. For example,

section 114 of the Act gives EPA the authority to issue information

requests and requires disclosure of information regardless of whether

it is generated through a self-audit. Colorado has similar authority.

EPA agrees that Colorado has the authority to adopt its own laws

regarding environmental matters as long as the area has not been

preempted by Congress. However, title V of the Act and the part 70

regulations give EPA the responsibility to ensure [[Page 4565]] that

states implement their operating permit programs in accordance with

title V and part 70. Thus, if Colorado's self-audit privilege impedes

Colorado's ability to implement and enforce its PROGRAM consistent with

title V and part 70, EPA may find it necessary to withdraw its approval

of the Colorado PROGRAM.

Comment #4: Two commenters objected to EPA's requirement that the

State obtain EPA approval of any new additions to Colorado's list of

insignificant activities before such exemptions can be utilized by a

source. One commenter stated that the State's administrative process

was for adding new exemptions to the State's Air Pollution Emission

Notice (APEN) requirements (which is a State program separate from the

part 70 operating permit program) and not for adding new insignificant

activities to be exempt from part 70 permitting requirements.

EPA Response: 40 CFR 70.5(c) requires EPA approval for lists of

insignificant activities identified in a state's title V operating

permit program. States have discretion to develop such lists but EPA is

required to review and approve these lists initially during the program

review and later during implementation as states seek to add new

exemptions to the list. Section 70.5(c) states, in part, ``the

Administrator may approve as part of a State program a list of

insignificant activities and emissions levels . . .'' [emphasis added].

Thus, EPA is not interfering with Colorado's legitimate exercise of

discretion but is merely requiring Colorado to include EPA review and

approval when amending its PROGRAM so it is consistent with 40 CFR

70.5(c). In addition, EPA agrees with the commenter that Colorado's

Exemption From APEN Requirements (Regulation 3, section II.D.1. of part

A) is separate from title V's insignificant activities list and

additions or changes to the list would not be effective until approved

by the Colorado Air Quality Control Commission as a revision to

Regulation 3. However, Regulation 3, part A, section II.D.5.

specifically states that ``any person may request the Division to

examine a particular source category or activity for exemption from

APEN or permit requirements'' [emphasis added]. Thus, this provision

would allow Colorado to add new exemptions from permit requirements

(which could include part 70 operating permit requirements) without

requiring EPA review and approval. This is inconsistent with title V

requirements and must be corrected to include EPA review and approval.

Comment #5: The commenter objected to EPA's statement that

Colorado's PROGRAM ``should'' define the meaning of ``prompt'' as used

in the requirements for reporting deviations from applicable

requirements, but that an ``acceptable alternative'' is for the State

to define ``prompt'' in each individual permit. The commenter stated

that EPA should not deny interim or full approval to any title V

operating permit program on grounds that it allows for defining

``prompt'' in the permit and that several earlier interim approval

notices must be revised.

EPA Response: EPA stated in the Federal Register notice proposing

interim approval of the Colorado PROGRAM that it believes that

``prompt'' should be defined in the PROGRAM regulations for purposes of

administrative efficiency and clarity. However, EPA agrees that the

State can define ``prompt'' for deviation reporting in each individual

permit but cautioned that EPA may veto permits that do not contain

sufficiently prompt reporting of deviations. This was not identified as

an approval issue. In addition, it would be inappropriate in this

notice to comment on how the definition of ``prompt'' was handled in

notices for other states' part 70 approvals.

Comment #6: The commenter expressed concern with EPA's statement

that the contents of risk management plans are not considered an

applicable requirement at this time but that rulemaking is ongoing and

changes to the State PROGRAM may be necessary to comply with new or

supplemental section 112(r) rulemaking. The commenter believes that

risk management plans should not be subject to permit revision

procedures under title V. The commenter also supports Colorado's

position that it will only implement the accidental release prevention

program under section 112(r) if Federal funds are available and further

notes that the State has no authority under title V to use permit fees

to fund risk management plan implementation.

EPA Response: Guidance issued April 13, 1993 (a memorandum from

John Seitz entitled: ``Title V Program Approval Criteria for Section

112 Activities'') states that when general statutory authority to issue

permits implementing title V is present, but the Attorney General is

unable to certify explicit legal authority to carry out specific

section 112 requirements at the time of PROGRAM submittal, the Governor

may instead submit commitments to adopt and implement applicable

section 112 requirements. The memo further states that the EPA will

rely on these commitments in granting part 70 program approvals

provided the underlying legislative authority would not prevent the

State from meeting the commitments. Another guidance memorandum issued

June 24, 1994 (from John Seitz and Jim Makris entitled: ``Relationship

between the Part 70 Operating Permit Program and section 112(r)'')

states that the final risk management program rule, which has not been

promulgated at this time, will likely expand the scope of section

112(r) applicable requirements for sources. If Colorado's funding

restriction is incompatible with the final section 112(r) rule, the

State must eliminate this restriction from their legislation.

Comment #7: The commenter expressed a general concern that,

``Although Colorado chooses not to provide explicit variances through

its operating permit program, EPA should acknowledge that the state

retains enforcement discretion for any violation of permit

requirements.''

EPA Response: As the commenter noted, Colorado does not include

variances in its PROGRAM. 40 CFR part 70 does not allow states to grant

variances from title V requirements. EPA recognizes that title V

permits may include compliance schedules for sources which are out of

compliance with applicable requirements. However, such measures to

bring a source into compliance are not the same as variances, which

normally provide a complete exemption from a requirement. EPA also

recognizes that Colorado may exercise enforcement discretion when

addressing permit violations, but such discretion is not unlimited.

Comment #8: The commenter objected to EPA granting interim approval

of Colorado's PROGRAM because the Colorado SIP, according to the

commenter, has not been corrected to conform with the National Ambient

Air Quality Standard (NAAQS) for PM10. The commenter contends that

Colorado's SIP is based on total suspended particulate (TSP), which

they believe has no legal or regulatory basis as an air quality

standard. The commenter also asserts that EPA's listing of TSP as a

regulated pollutant in the April 26, 1993 guidance memorandum entitled

``Definition of Regulated Air Pollutant for Purposes of Title V'' is an

error and claims the correct regulated pollutant should be total

particulate, not TSP. Last, the commenter stated that ``enforcing

policies based on TSP instead of PM10 violates EPA's own regional

consistency rule'' found in 40 CFR 56.1-56.7. [[Page 4566]]

EPA Response: EPA disagrees with the commenter's claim that the

Colorado SIP has not been revised to conform with the NAAQS for

PM10. On the contrary, Colorado has developed nonattainment plans

regulating sources of PM10 for all of the State's PM10

nonattainment areas designated upon enactment of the 1990 Amendments.

All of those plans have been approved in at least some form (i.e.,

full, conditional, partial, or limited approval) by EPA. Further, the

State has updated its nonattainment new source review (NSR) and

prevention of significant deterioration (PSD) permitting requirements

to apply to new and modified major sources of PM10, and these

programs require compliance with the NAAQS (including the PM10

NAAQS) as a condition of permit issuance. EPA approved these revisions

to the State's permitting program as conforming to the PM10 NAAQS

on June 17, 1992 (57 FR 26997).

However, the State has retained some requirements pertaining to

sources of TSP, as follows: The State's PSD permitting program applies

to new and modified major sources of particulate matter (of which TSP

is a subset), as well as PM10. Regulation of such sources of

particulate matter is required by the Federal PSD permitting

regulations. Also, the State regulates minor sources of TSP in its

minor NSR permitting regulations, and the State regulations still

include the previous Federal ambient air quality standard for TSP.

However, on June 24, 1993, when the State adopted the PM10 NAAQS

into its regulations, the State temporarily suspended the TSP ambient

standard while the State determines whether to retain, revise, or

delete the TSP standard. In any case, the State always has the option

of adopting requirements that are more stringent than the Federal

requirements, as provided by section 116 of the Act. Further, EPA has,

in general, approved State provisions that are more stringent than the

Federal requirements as part of the SIP if such provisions can be

considered to control NAAQS (i.e., criteria) pollutants or their

precursors. Colorado's regulation of TSP under the minor NSR program

and its TSP ambient air quality standard will control PM10

emissions, since PM10 is a component of TSP. Thus, EPA believes

there is legal basis for the State retaining some controls on TSP in

its SIP.

In regard to the comment that TSP is not a regulated pollutant, the

commenter is correct. As pointed out in a June 14, 1993 memorandum from

John Seitz, some EPA guidance documents have incorrectly used the term

``TSP'' interchangeably with ``particulate matter emissions.'' However,

TSP is not a regulated air pollutant as defined in 40 CFR 70.2.

Particulate matter emissions (of which TSP is a component), on the

other hand, are considered to be regulated pollutants as defined in 40

CFR 70.2. The EPA notes that Colorado's definition of ``regulated air

pollutant'' in its part 70 operating permit regulations includes both

particulate matter and PM10, so there is no flaw relative to this

issue which would prevent interim approval of Colorado's PROGRAM. If

Colorado also considers TSP as a regulated pollutant under its PROGRAM,

EPA would have no concerns with this issue as states' part 70 programs

are generally allowed to be more stringent than the corresponding

Federal requirements. Last, EPA does not believe it is violating the

regional consistency rules in 40 CFR 56.1-56.7 by allowing a State to

be more stringent than the corresponding Federal requirements. As

discussed above, EPA believes section 116 of the Act provides states

with the option of adopting requirements that are more stringent than

the Federal requirements. In fact, it has generally been a national

policy to allow state rules to be more stringent than the Federal

requirements, except in those cases where the Act or the corresponding

Federal regulations prohibit a state rule from being more stringent.

(For example, some of the operational flexibility rules in 40 CFR

70.4(b)(12) are a required element of states' part 70 programs, and

states do not have the option of prohibiting such flexibility.) Thus,

in this case, EPA believes it has followed its regional consistency

rules, and the fact that Colorado's SIP still regulates TSP does not

impact EPA's ability to grant interim approval to Colorado's PROGRAM.

Comment #9: The commenter expressed concern that EPA was requiring

the State of Colorado to authorize automatic annual increases in

spending to administer the State's PROGRAM. In addition, the commenter

stated that ``Colorado may, in the future, charge whatever fees it

wants in whatever combination it wishes, with or without any specific,

annual fee escalation mechanism, so long as it can run the aspects of

the Program set forth in Part 70.9(b)(1).''

EPA Response: EPA disagrees with the commenter's assertion that EPA

was requiring Colorado to authorize automatic annual increases in

spending. EPA simply wished to clarify that, regardless of the amount

of money the State collects to adequately fund all reasonable direct

and indirect costs of the PROGRAM, the State Legislature retains

spending authority and must annually authorize the spending of the

necessary fee revenue by the Permitting Authority. If adequate spending

authority is not authorized, and the State is therefore unable to fund

all the reasonable direct and indirect costs of the PROGRAM, the EPA

would be required to disapprove or withdraw the part 70 PROGRAM, impose

sanctions and implement a Federal permitting program. This language was

intended to clarify EPA's position and was not considered an issue for

interim approval. In addition, EPA agrees with the commenter's

statement regarding Colorado's authority to levy fees in whatever

combination it wishes so long as the State can adequately fund its

PROGRAM.

Comment #10: The commenter requested that EPA's final interim

approval of the Colorado PROGRAM clearly reflect OAQPS guidance stating

that preconstruction permits containing federally enforceable section

112(g) conditions need not be reopened subsequent to Colorado's

adoption of EPA's final section 112(g) rule.

EPA Response: The June 28, 1994 memorandum entitled ``Guidance for

Initial Implementation of Section 112(g)'' provides that ``if the State

issues a final, federally enforceable preconstruction permit before the

final section 112(g) rule is promulgated, the EPA recommends relying on

that permit rather than requiring the permit to be reopened as a result

of the final rule, so long as the permit reflects compliance with the

requirements of section 112(g).'' However, EPA wishes to clarify the

previous guidance statement by emphasizing that it cannot unequivocally

declare that all existing federally enforceable preconstruction permits

will not need to be reopened. EPA does not know which permits, if any,

will need to be reopened until after the section 112(g) rule is

promulgated, and this will be a case-by-case determination. Until the

section 112(g) rule is final, EPA will expect states to implement the

section 112(g) requirements using the guidance that has been provided.

Comment #11: The commenter stated that Colorado's PROGRAM allows

minor New Source Review changes to be processed as minor permit

modifications under Regulation No. 3, part C, consistent with EPA's

proposed interim approval criteria published at 59 FR 44572 (August 29,

1994), and that EPA's proposed interim approval correctly leaves intact

Colorado's procedures for minor permit modifications. The commenter

also stated that EPA should not lose sight of the importance of this

flexibility [[Page 4567]] between the date of interim approval of

Colorado's PROGRAM and final PROGRAM approval. In addition the

commenter believes that classifying minor new source review changes as

title I modifications would have disastrous consequences for industry.

EPA Response: EPA does not consider this an adverse comment

regarding approval of the Colorado PROGRAM since Colorado has submitted

a SIP revision to their new source review regulations (Regulation 3,

part B) which will enable minor modifications to be processed under the

title V minor permit modification procedures. However, the commenter

should note that EPA has not yet acted on this SIP revision and

therefore, it is not currently available. EPA expects to approve this

SIP revision before processing Colorado's full PROGRAM approval. In

addition, the broader issue of whether or not minor new source review

changes should be classified as title I modifications must be addressed

at the National level.

Comment #12: The commenter submitted comments it had previously

filed on the proposed part 70 rule and stated that it objected to the

interim approval of the Colorado PROGRAM for the same reasons it had

objected to the part 70 rule itself.

EPA Response: EPA believes the appropriate forum for pursuing

objections to the legal validity of the part 70 rule is through a

petition for review of the rule brought in the D.C. Circuit Court of

Appeals. EPA notes that this commenter has filed such a petition.

However, unless and until the part 70 rule is revised, EPA must

evaluate programs according to the rule that is in effect.

C. Final Action

The EPA is promulgating interim approval of the PROGRAM submitted

by the State of Colorado on November 5, 1993. The State must make the

following changes to receive full PROGRAM approval:

(1) The State must revise its administrative process in section

II.D.5 of part A of Regulation 3, for adding additional exemptions to

the insignificant activities list, to require approval by the EPA of

any new exemptions before such exemptions can be utilized by a source.

(2) The State must revise the Colorado Air Quality Control Act (25-

7-109.6(5)) to remove the condition that an accidental release

prevention program pursuant to section 112(r) of the Act will only be

implemented if Federal funds are available.

Refer to the technical support document accompanying this

rulemaking for a detailed explanation of each PROGRAM deficiency.

In Colorado's part 70 program submission, the State did not seek

part 70 PROGRAM approval within the exterior boundaries of Indian

Reservations in Colorado. The scope of Colorado's part 70 program

approved in this notice applies to all part 70 sources (as defined in

the approved 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 Southern Ute Indian Reservation and the

Ute Mountain Ute Indian Reservation, 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 not extending the scope of Colorado's approved 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 Colorado choose to

seek PROGRAM approval within ``Indian Country,'' it may do so without

prejudice. Before EPA would approve the State's part 70 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 approval, which may not be renewed, extends until

February 24, 1997. During this interim approval period, the State of

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

promulgate, administer and enforce a Federal operating permits program

in the State of Colorado. Permits issued under a program with interim

approval have full standing with respect to part 70, and the 1-year

time period for submittal of permit applications by subject sources

begins upon the effective date of this interim approval, as does the 3-

year time period for processing the initial permit applications.

If the State of Colorado fails to submit a complete corrective

PROGRAM for full approval by August 24, 1996, EPA will start an 18-

month clock for mandatory sanctions. If the State of Colorado 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 Colorado 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 Colorado, both sanctions under section 179(b) will apply after

the expiration of the 18-month period until the Administrator

determined that the State of Colorado had come into compliance. In any

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

of Colorado still has not submitted a corrective PROGRAM that EPA has

found complete, a second sanction will be required.

If EPA disapproves the State of Colorado'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 Colorado has

submitted a revised PROGRAM and EPA has determined that it corrected

the deficiencies that prompted the disapproval. Moreover, if the

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

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

expiration of the 18-month period until the Administrator determines

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

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

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 Colorado 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 Colorado PROGRAM

by the expiration of this interim approval and that expiration

[[Page 4568]] occurs after November 15, 1995, EPA must promulgate,

administer and enforce a Federal permits program for the State of

Colorado upon interim approval expiration.

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

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

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

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

adequate authorities, adequate resources for implementation, and an

expeditious compliance schedule, which are also requirements under part

70. Therefore, the EPA is also 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 only applies to

sources covered by the part 70 PROGRAM.

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: January 13, 1995.

Jack McGraw,

Acting Regional Administrator.

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

amended as follows:

PART 70--[AMENDED]

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

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

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

Colorado in alphabetical order to read as follows:

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

Permits Programs

* * * * *

Colorado

(a) Colorado Department Health-Air Pollution Control Division:

submitted on November 5, 1993; effective on [date 30 days after date of

publication]; interim approval expires February 24, 1997.

(b) [Reserved]

* * * * *

[FR Doc. 95-1736 Filed 1-23-95; 8:45 am]

BILLING CODE 6560-50-F