Clean Air Act Proposed Interim Approval of the Operating Permits Program; Nevada Division of Environmental Protection; Nevada

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5273-9]

Clean Air Act Proposed Interim Approval of the Operating Permits

Program; Nevada Division of Environmental Protection; Nevada

AGENCY: Environmental Protection Agency (``EPA'').

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the operating permits

program submitted by the Nevada Division of Environmental Protection

(``NDEP'' or ``State'') 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.

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

September 6, 1995.

ADDRESSES: Comments should be addressed to Celia Bloomfield, Mail Code

A-5-2, U.S. Environmental Protection Agency, Region IX, Air and Toxics

Division, 75 Hawthorne Street, San Francisco, CA 94105.

Copies of NDEP's submittal and other supporting information used in

developing the proposed interim approval are available for inspection

during normal business hours at the following location: U.S.

Environmental Protection Agency, Region IX, 75 Hawthorne Street, San

Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Celia Bloomfield (telephone: 415/744-

1249), Mail Code A-5-2, U.S. Environmental Protection Agency, Region

IX, Air and Toxics Division, 75 Hawthorne Street, San Francisco, CA

94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the 1990 Clean Air Act Amendments

(sections 501-507 of the Clean Air Act (``Act'')), EPA has promulgated

rules that define the minimum elements of an approvable state operating

permits program and the corresponding standards and procedures by which

EPA will approve, oversee, and withdraw approval of state operating

permits programs (see 57 FR 32250 (July 21, 1992)). These rules are

codified at 40 CFR part 70 (``part 70''). Title V requires states to

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

all major stationary sources and to certain other sources.

The Act requires that states develop and submit title V programs to

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

each program within one year after receiving the submittal. 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.

This proposed interim approval applies to the NDEP title V

operating permits program and sources under NDEP's jurisdiction. NDEP

has jurisdiction over all sources in the State outside of Washoe

County, Clark County and tribal lands, as well as all fossil fuel fired

steam generating power plants inside Washoe and Clark Counties. Washoe

County District Health Department received interim approval on January

5, 1995 (60 FR 1741), and interim approval was proposed for Clark

County Health District on March 14, 1995 (60 FR 13683).

B. Federal Oversight and Sanctions

If EPA were to finalize this proposed interim approval, it would

extend for two years following the effective date of final interim

approval and could not be renewed. During the interim approval period,

NDEP would be protected from sanctions, and EPA would not be obligated

to promulgate, administer and enforce a federal permits program in

Nevada. 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 interim approval, as does the three-year time period

for processing the initial permit applications.

Following final interim approval, if NDEP failed to submit a

complete corrective program for full approval by the date six months

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

clock for mandatory sanctions. If NDEP then failed to submit a

corrective program that EPA found complete before the expiration of

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

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

until EPA determined that NDEP had corrected the deficiency by

submitting a complete corrective program. Moreover, if the

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

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

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

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

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

EPA found complete, a second sanction would be required.

If, following final interim approval, EPA were to disapprove NDEP's

complete corrective program, 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 NDEP had submitted a

revised program and 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 NDEP, both

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

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

into compliance. In all cases, if, six months after EPA applied the

first sanction, NDEP had not submitted a revised program that EPA had

determined corrected the deficiencies that prompted disapproval, 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 a state has not

timely submitted a complete corrective program or EPA has disapproved a

submitted corrective program. Moreover, if EPA has not granted full

approval to NDEPs program by the expiration of an interim approval and

that expiration occurs after November 15, 1995, EPA must promulgate,

administer and enforce a federal permits program for NDEP upon interim

approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

The analysis contained in this notice focuses on specific elements

of NDEP's title V operating permits program that must be corrected to

meet the minimum requirements part 70. The full program submittal; the

Technical Support Document (``TSD''), which contains a detailed

analysis of the submittal; and

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other relevant materials are available for inspection as part of the

public docket (NV-DEP-95-1-OPS). The docket may be viewed during

regular business hours at the address listed above.

1. Title V Program Support Materials

NDEP's initial title V program was submitted on November 22, 1993.

The submittal was found to be complete on January 13, 1994. In a letter

dated July 20, 1994, NDEP submitted to EPA revised title V implementing

regulations. The revised regulations constituted a material change to

the State's title V program, and hence, extended EPA's review period

pursuant to section 70.4(e)(2). On February 8, 1995, EPA received an

amended title V submittal from NDEP (``amended submittal'') and a

letter from the Governor's designee requesting that the amended

submittal be reviewed and acted on in lieu of the initial November 22,

1993 submittal. EPA agreed, sent a second program completeness letter

to NDEP on February 27, 1995, and is taking action on the February 8,

1995 amended submittal in this notice.

NDEP's February 8, 1995 submission contains a complete program

description, enabling legislation, State implementing and supporting

regulations, and all other program documentation required by section

70.4. The amended submittal also contains a list of the changes made

from the November 22, 1993 version, such as a revised fee demonstration

and the removal of enacted bills that have since been codified into the

Nevada Revised Statutes (``NRS''). The February 8, 1995 submittal does

not, however, include an updated Attorney General's opinion; it

includes the original version signed November 15, 1993. Consequently,

the citations for several rules and legislation are expressed in a

precodification format. EPA is therefore relying on elements of the

initial submittal as supporting documentation for this rulemaking. The

TSD, located in the docket, specifically identifies when EPA's

evaluation of the program relies on supporting documentation contained

in the initial program submittal.

2. Title V Operating Permit Regulations and Program Implementation

NDEP relied on additions and amendments to its existing air quality

regulations (NAC 445.430-445.846) to satisfy the requirements of part

70 and title V. The first ``title V'' revisions to NAC 445.430-846 were

adopted on November 3, 1993. On March 3, 1994, the Nevada State

Environmental Commission made additional changes to the title V

portions of NAC 445.430-846. The February 8, 1995 amended submittal

contains the March 3, 1994 version of NAC 445.430-445.846; a May 26,

1994 amendment to NAC 445.7135 (fees); a February 16, 1995 amendment to

NAC 445B.221 (part 72, acid rain); and a February 16, 1995 amendment to

NAC 445B.327 (fees).1 In a letter sent to EPA dated July 12, 1995,

NDEP identified the provisions in NAC 445.430-846 relevant to title V

implementation and requested that EPA take action only on those

provisions identified. Therefore, in this proposed interim approval

notice, EPA is acting on the following provisions of Nevada State law:

NAC 445.430, 445.432, 445.433, 445.4343, 445.4346, 445.438, 445.4395,

445.4415, 445.4425, 445.4615, 445.4625, 445.4635, 445.4645, 445.477,

445.4915, 445.4955, 445.500, 445.5008, 445.504, 445.506, 445.5095,

445.5105, 445.521, 445.5275, 445.5305, 445.5405, 445.5431, 445.548,

445.550, 445.559, 445.5695, 445.571, 445.5855, 445.5905, 445.5915,

445.5925, 445.5935, 445.613, 445.628, 445.630, 445.649, 445.662,

445.664, 445.696, 445.697, 445.699, 445.704, 445.7042, 445.7044,

445.705, 445.7052, 445.7054, 445.7056, 445.7058, 445.706, 445.707,

445.7073, 445.7075, 445.7077, 445.7112, 445.7114, 445.7122, 445.7124,

445.7126, 445.7128, 445.713, 445.7131, 445.7133, 445.7135, 445.7145,

445.7155, 445.717, 445.7191, 445.7193, 445.7195, 445B.221, 445B.327.

Provisions not included in the July 12, 1995 letter from NDEP may still

be considered supporting documentation for the State's title V

operating permit program.

\1\ The citation format varies because NDEP revised its citation

system after most of the implementing regulations were adopted and

submitted to EPA. A citation translation key can be found in the

docket at EPA Region IX.

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NDEP's title V implementing regulations substantially meet the

requirements of 40 CFR part 70, sections 70.2 and 70.3 for

applicability; sections 70.4, 70.5, and 70.6 for permit content,

including operational flexibility; section 70.7 for public

participation and minor permit modifications; section 70.5 for criteria

that define insignificant activities; section 70.5 for complete

application forms; and section 70.11 for enforcement authority.

Although the regulations substantially meet part 70 requirements, there

are several deficiencies in the program that are outlined under section

II.B.1. below as interim approval issues and further described in the

TSD.

a. Applicability

NDEP stated in its amended submittal that it will take advantage of

EPA's March 8, 1994 policy regarding fugitive emissions. NDEP will not

require fugitives to be considered in determining the major source

status of sources subject to post-1980 New Source Performance Standards

(``NSPS'') and National Emissions Standards for Hazardous Air

Pollutants (``NESHAP''). In accordance with that policy, NDEP's title V

program is eligible only for interim approval. (See March 8, 1994

memorandum entitled, ``Consideration of Fugitive Emissions in Major

Source Determinations,'' signed by Lydia Wegman.)

The program description, submitted as part of NDEP's title V

program, indicates the State's intention to permit only major sources,

phase II acid rain sources, and solid waste incinerators subject to

section 129(e) of the Act (program submittal, Section VI, pp.2-4). The

program description further states that NDEP's title V program does not

cover nonmajor sources (``area sources'') subject to a section 111 or

112 standard or in a category designated by the Administrator. While

the coverage is not consistent with section 70.3(b)(2), which states

that section 111 and 112 standards promulgated after July 21, 1992 will

specify whether a nonmajor source must obtain a title V permit, it is

acceptable for the following two reasons: 1) EPA is deferring title V

permit requirements for nonmajor sources subject to recently

promulgated MACT standards (See May 16, 1995 guidance document

entitled, ``Title V Permitting for Nonmajor Sources in Recent Section

112 Maximum Achievable Control Technology (MACT) Standards,'' by John

Seitz, Director of the Office of Air Quality Planning and Standards);

and 2) NDEP committed to expeditiously revise its title V program to

reflect any action by EPA to require title V permitting for nonmajor

sources (program submittal, section VI, pp.3-4).

Although NDEP's program description clearly indicates NDEP's intent

to exclude nonmajor sources from its title V (i.e., Class I) permitting

requirements, NDEP's regulations require any new source subject to a

section 111 or section 112 standard or any new source in a category of

sources designated by the Administrator of EPA to apply for a Class I-B

permit (NAC 445.7044.3 and .4). In other words, by omitting the word

``major'' when specifying new source applicability, the regulations

could be interpreted to require certain nonmajor sources to obtain

title V permits. EPA views this applicability distinction as an

inconsistency in the State's program. Prior to final rulemaking, EPA

requests that NDEP provide a letter to resolve this apparent

inconsistency and

[[Page 40142]]

describe under which reading the State desires EPA to act on its

program.

b. Integrated Permit

NDEP's program combines the requirements for operating permits and

construction permits (``integrated program''). All title V sources are

identified as Class I sources and must obtain Class I operating permits

that meet the requirements of title V and part 70. Sources subject to

State requirements only (i.e., not subject to the requirements of title

V or part 70) are identified as Class II sources and are outside the

scope of this proposed approval. Existing Class I sources will be

subject to Class I-A requirements, and new or modified Class I sources

will be subject to Class I-B requirements.

The regulations that implement the integrated program are contained

in the Nevada Administrative Code (``NAC'') sections 445.430-445.846.

This interim approval addresses only those elements that pertain to

operating permit program requirements for title V sources as identified

above. The proposed approval is not being made under EPA's title I

authority, and hence, is not amending Nevada's new source review

program.

c. Insignificant Activities

Section 70.5(c) states that EPA may approve, as part of a state

program, a list of insignificant activities and emissions levels which

need not be included in permit applications. Section 70.5(c) also

states that an application for a part 70 permit may not omit

information needed to determine the applicability of, or to impose, any

applicable requirement, or to evaluate appropriate fee amounts. Section

70.4(b)(2) requires states to include in their part 70 programs any

criteria used to determine insignificant activities or emission levels

for the purpose of determining complete applications. Under part 70, a

State must request and EPA may approve as part of that State's program

any activity or emission level that the state wishes to consider

insignificant. Part 70, however, does not establish appropriate

emission levels for insignificant activities, relying instead on a

case-by-case determination of appropriate levels based on the

particular circumstances of the part 70 program under review.

NDEP's list of insignificant activities is set out in NAC 445.705.3

and referred to as permit ``exemptions.'' Despite being called

``exemptions,'' NAC 445.705.3 ensures that potential emissions from

these activities will be included in all Class I applicability

determinations. In addition, NAC 445.7054.2(b) requires Class I permit

applications to describe all points of emissions and all activities

``in sufficient detail to establish the basis for the applicability of

standards and fees,'' thus ensuring that the application will not omit

information needed to determine whether or how a requirement of the Act

applies at a source. EPA interprets the terms ``all points of

emissions'' and ``all activities which may generate emissions of [the]

air pollutants'' in NAC 445.7054.2(b) to include those from NDEP's list

of insignificant activities at NAC 445.705.3.

NDEP's insignificant activities are defined by source or activity

type in combination with a given size or rate. Activities without a

specified size or rate cut-off qualify as insignificant if they are

below the major source threshold. This high cut-off, when viewed in

conjunction with the listed activities like ``agricultural land use''

and ``equipment or contrivances used exclusively for the processing of

food'' would almost certainly result in necessary information being

left off of the permit application. In order to be fully approvable,

NDEP must provide additional criteria that will limit insignificant

activities to activities that are unnecessary for evaluating the

applicability of requirements at a facility.

For other State and district programs, EPA has proposed to accept,

as sufficient criteria for full approval, emission levels defining

insignificant activities of two tons per year for criteria pollutants

and the lesser of 1000 pounds per year, section 112(g) de minimis

levels, or other title I significant modification levels for hazardous

air pollutants (``HAP'') and other toxics (40 CFR section

52.21(b)(23)(i)). EPA believes that these levels are sufficiently below

the applicability thresholds of many applicable requirements to assure

that no unit potentially subject to an applicable requirement is left

off a title V application. EPA is requesting comment on the

appropriateness of these emission levels for determining insignificant

activities in Nevada. This request for comment is not intended to

restrict the ability of other States and districts to propose, and EPA

to approve, different emission levels if the state or district

demonstrates that such alternative emission levels are insignificant

compared to the level of emissions from and types of units that are

permitted or subject to applicable requirements.

d. Variances

NDEP has authority under State law to issue a variance from State

requirements. Sections 445.506, 445.511, 445.516, and 445.521 of the

NRS allow the State to grant relief from enforcement action for permit

violations. EPA regards these provisions as wholly external to the

program submitted for approval under part 70, and consequently, is

proposing to take no action on these provisions of State law.

The EPA has no authority to approve provisions of State or local

law, such as the variance provisions referred to, that are inconsistent

with the Act. The EPA does not recognize the ability of a permitting

authority to grant relief from the duty to comply with a federally

enforceable part 70 permit, except where such relief is granted through

procedures allowed by part 70. A part 70 permit may be issued or

revised (consistent with part 70 permitting procedures) to incorporate

those terms of a variance that are consistent with applicable

requirements. A part 70 permit may also incorporate, via part 70 permit

issuance or modification procedures, the schedule of compliance set

forth in a variance. However, EPA reserves the right to pursue

enforcement of applicable requirements notwithstanding the existence of

a compliance schedule in a permit to operate. This is consistent with

40 CFR 70.5(c)(8)(iii)(C), which states that a schedule of compliance

``shall be supplemental to, and shall not sanction noncompliance with,

the applicable requirements on which it is based.''

e. Reporting of Permit Deviations

Part 70 requires prompt reporting of deviations from permit

requirements, and NDEP has not defined ``prompt'' in its program.

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

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

and the applicable requirements. Although the permit program

regulations should define prompt for purposes of administrative

efficiency and clarity, an acceptable alternative is to define prompt

in each individual permit. The EPA believes that prompt should

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

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

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

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

longer time period may be acceptable. However, prompt reporting must be

more frequent than the

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semiannual reporting requirement, given this is a distinct reporting

obligation under section 70.6(a)(3)(iii)(A). Where ``prompt'' is

defined in the individual permit but not in the program regulations,

EPA may veto permits that do not contain sufficiently prompt reporting

of deviations.

3. Permit Fee Demonstration

Section 502(b)(3) of the Act requires that each permitting

authority collect fees sufficient to cover all reasonable direct and

indirect costs required to develop and administer its title V operating

permits program. Each title V program submittal must contain either a

detailed demonstration of fee adequacy or a demonstration that

aggregate fees collected from title V sources meet or exceed $25 per

ton per year (adjusted annually based on the Consumer Price Index

(``CPI''), relative to 1989 CPI). The $25 per ton amount is presumed,

for program approval, to be sufficient to cover all reasonable program

costs and is thus referred to as the ``presumptive minimum,'' (40 CFR

70.9(b)(2)(i)).

NDEP elected to collect fees below the presumptive minimum and to

submit a detailed fee demonstration of fee adequacy. Nevada's fee

regulation, NAC 445B.327, was amended on February 16, 1995 to cap fees

at the 1995 level, thus charging $3.36 per ton of emissions of

regulated pollutants. In addition, facilities must pay annual

maintenance fees per permitted source. Given the amount of fees

collected from title V sources for fiscal year 1995, NDEP estimated the

total annual fee revenue from title V sources to be about $599,893

during the first three years of the program.

In order to determine whether the title V fees would be adequate to

cover the direct and indirect costs of the program, NDEP did a detailed

workload analysis which incorporated all the activities involved in

title V implementation. Based on this analysis, NDEP determined that

four additional staff would have to be hired. Incorporating the cost of

the four staff persons, a phased schedule for permitting sources, and

other direct and indirect costs, NDEP estimated the total title V

program costs to be approximately $457,079 each year during the first

three years of the program.

NDEP's fee analysis demonstrates that title V fees are expected to

be sufficient to cover the costs of the title V program. In order to

ensure continued fee adequacy, NDEP will keep an accounting system that

details expenditures associated with direct title V activities and

ensures that the State's air quality management fund has adequate fee

revenue to cover indirect program costs.

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

a. Authority and Commitments for Section 112 Implementation

NDEP has demonstrated in its title V program submittal adequate

legal authority to implement and enforce all section 112 requirements

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

Nevada's enabling legislation and in regulatory provisions defining

federal ``applicable requirements'' and requiring each permit to

incorporate conditions that assure compliance with all applicable

requirements. NDEP's submittal also contains a commitment to implement

and enforce section 112 requirements and to adopt additional

regulations as needed to issue permits that implement and enforce the

requirements of section 112. The EPA has determined that the legal

authority and commitments are sufficient to allow NDEP to issue permits

that assure compliance with all section 112 requirements. For further

discussion, please refer to the TSD accompanying this action and the

April 13, 1993 guidance memorandum entitled, ``Title V Program Approval

Criteria for Section 112 Activities,'' signed by John Seitz.

b. Authority for Title IV Implementation

NDEP incorporated by reference part 72, the federal acid rain

permitting regulations, on February 16, 1995. The incorporation by

reference was codified in NAC 445B.221 and submitted to EPA on February

27, 1995 to be added to the State's title V operating permit program.

B. Proposed Interim Approval and Implications

1. Title V Operating Permits Program

The EPA is proposing to grant interim approval to the operating

permits program submitted by the Nevada Division of Environmental

Protection, Bureau of Air Quality on November 22, 1993 and revised by

the amended submittal made on February 8, 1995. If promulgated, NDEP

must make the following changes to receive full approval:

(1) Revise NAC 445.7054.2(h)(2) to clearly require that compliance

certifications submitted as part of the permit applications include the

compliance status of all applicable requirements and the methods used

for determining compliance with all applicable requirements. As NDEP's

rule is currently written, a compliance certification is part of the

source's compliance plan, and the elements of the compliance plan are

required to address all applicable requirements (NAC 445.7054.2(h)).

However, the compliance certification provision, within the compliance

plan framework, can be read, inappropriately, to narrow the scope of

certifications to those applicable requirements that become effective

during the term of the permit. Nonetheless, because NAC

445.7054.2(h)(1) requires a narrative description of the source's

compliance status with respect to all applicable requirements, EPA

believes part 70's compliance certification requirements will be

substantially met for the interim approval period. (section 70.5(c)(9))

(2) Revise the definition of ``regulated air pollutant'' to

include, in addition to those pollutants listed under NAC 445.5905: 1)

any pollutant subject to requirements established under section 112 of

the Act, including sections 112(g), (j), and (r); and 2) any Class I or

Class II substance subject to a standard established by title VI of the

Act. (Section 70.2, definition of ``regulated air pollutant'')

(3) NDEP's rule does not contain a title V permit application

trigger for existing sources that become subject to the program after

the program's effective date. NAC 445.7052.1 must be revised to include

an application requirement for such sources. (section 70.5(a)(1)(i))

(4) NDEP's permit shield provisions in NAC 445.7114.1(j) are not

fully consistent with part 70 and must be revised as follows: 1)

clearly indicate that NAC 445.7114.1(j) provides for permit shields; 2)

require the permit to expressly state that a permit shield exists or

the permit is presumed not to provide such a shield (section

70.6(f)(2)); and 3) add a statement that the permit shield may not be

extended to minor permit modifications (section 70.7(e)(2)(vi)).

(5) Add emissions trading provisions consistent with section

70.6(a)(10), which requires that trading must be allowed where an

applicable requirement provides for trading increases and decreases

without a case-by-case approval.

(6) A schedule of compliance contained in a title V permit must be

consistent with that required in the permit application (section

70.6(c)(3)). While NDEP application provisions require all the

necessary elements of a schedule of compliance, the permit requirements

in NAC 445.7114.1(h) must be revised either by referencing the

application requirements in NAC 445.7054.2(h)(3) or by adding that the

schedule of compliance will contain a

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schedule of remedial measures, including an enforceable sequence of

actions with milestones, leading to compliance and that the schedule

shall resemble and be at least as stringent as that contained in any

judicial consent decree or administrative order. In addition, the

schedule of compliance must address requirements that become applicable

during the term of the permit pursuant to section 70.5(c)(8)(iii)(B).

(7) The progress report requirement in NAC 445.7114.1(h)(1) is

vague and must be revised to more clearly meet the requirements of

section 70.6(c)(4). EPA suggests adding the following language to NAC

445.7114.1(h)(1): ``Requirements for [s]emiannual progress reports with

dates for achieving milestones and dates when such milestones were

achieved.''

(8) NDEP indicated in its program description that Class I permits

may be issued to portable sources (program submittal, Section II, p.8).

In order to satisfy the part 70 requirements for temporary sources,

NDEP must add a requirement that the owner or operator of a Class I

``portable source'' (as defined in NAC 445.5695) notify NDEP at least

10 days in advance of each change in location. (section 70.6(e)(2))

(9) Revise NAC 445.7114.1(g) to ensure that any trade under a

federally enforceable emissions cap is preceded by a written

notification to NDEP at least 7 days in advance of the trade. The

notification must specify when the change will occur and include a

description of the change in emissions that will result and how the

increases and decreases will comply with the terms and conditions of

the permit. (sections 70.4(b)(12) and 70.4(b)(12)(iii)(A))

(10) Remove the phrase ``Except as otherwise provided in subsection

2'' from NAC 445.705.1, as it inaccurately suggests that major sources

subject to either the New Source Performance Standard for new

residential wood heaters or the National Emissions Standard for

Hazardous Air Pollutants for asbestos demolition are not required to

obtain title V operating permits.

(11) Provide additional defining criteria that will ensure that

NDEP's insignificant activities (i.e., activities exempt from part 70

permitting) are truly insignificant and are not likely to be subject to

an applicable requirement. Alternatively, NDEP may restrict the

exemptions to activities that are not likely to be subject to an

applicable requirement or emit less than State-established emission

levels. NDEP should demonstrate that these emission levels are

insignificant compared to the level of emissions from and type of units

that are required to be permitted or subject to applicable

requirements.

This interim approval, which may not be renewed, extends for a

period of up to two years. During the interim approval period, NDEP is

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

obligated to promulgate a federal permits program in the State. Permits

issued under a program with interim approval have full standing with

respect to part 70, and the one year time period for submittal of

permit applications by subject sources begins upon interim approval, as

does the three-year time period for processing the initial permit

applications.

The scope of NDEP's part 70 program that EPA proposes to approve in

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

approved program) within NDEP's jurisdiction. The approved program

would not apply to any part 70 sources over which an Indian tribe has

jurisdiction. See, e.g., 59 FR 55813, 55815-18 (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 43956, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 21,

1993).

2. State Preconstruction Permit Program Implementing Section 112(g)

The EPA has published an interpretive notice in the Federal

Register regarding section 112(g) of the Act (60 FR 8333; February 14,

1995) that postpones the effective date of section 112(g) until after

EPA has promulgated a rule addressing that provision. The interpretive

notice also explains that EPA is considering whether the effective date

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

the federal rule so as to allow states time to adopt rules implementing

the federal rule, and that EPA will provide for any such additional

delay in the final section 112(g) rulemaking. Unless and until EPA

provides for such an additional postponement of section 112(g), NDEP

must be able to implement section 112(g) during the period between

promulgation of the federal section 112(g) rule and adoption of

implementing State regulations.

Implementation of section 112(g) during this transition period

requires states to have an available mechanism for establishing

federally enforceable HAP emission limits or other conditions from the

effective date of the section 112(g) rule until they can adopt rules

specifically designed to implement section 112(g). NDEP requires any

source that constructs or modifies to obtain a permit or permit

revision prior to commencing construction. As noted earlier, NDEP's

program is an integrated program; that is, the permit that is issued to

a new or modifying source prior to its construction will contain all

preconstruction review requirements and all operating requirements.

Integrated preconstruction/operating permits issued to major sources

must meet all procedural requirements of part 70, including public and

EPA review, and are therefore part 70 permits. In Nevada, sources

subject to section 112(g) (new or modified major sources of hazardous

air pollutants) will be issued a part 70 permit (i.e., a Class I

permit) prior to construction. The State has authority to establish a

MACT requirement for the source pursuant to NAC 445.7191 and 445.7193.

The source will then have federally enforceable limits on HAP emissions

in compliance with section 112(g). Once EPA promulgates a final section

112(g) rule, NDEP will act expeditiously to revise its hazardous air

pollutant regulations to be consistent with the section 112(g)

regulations.

3. Program for Delegation of Section 112 Standards as Promulgated

Requirements for approval, specified in 40 CFR section 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, EPA is proposing to grant approval under

section 112(l)(5) and 40 CFR section 63.91 of NDEP's program for

receiving delegation of section 112 standards that are unchanged from

federal standards as promulgated.

In a letter dated July 12, 1995, NDEP requested that EPA approve,

in conjunction with the title V approval action, NDEP's program for

receiving delegation of unchanged section 112 standards as they apply

to nonmajor sources. Therefore, today's proposed approval under section

112(l)(5) and 40 CFR section 63.91 of NDEP's program for delegation

extends to non-part 70 sources as well as part 70 sources. (See July

12, 1995 letter from Jolaine Johnson, Chief, Bureau of Air Quality,

NDEP to Debbie Jordan, Chief,

[[Page 40145]]

Operating Permits Section, EPA Region IX.)

NDEP has informed EPA that it intends to obtain the regulatory

authority necessary to accept delegation of section 112 standards

(existing and future) by incorporating section 112 standards into the

Nevada Administrative Code by reference to the federal regulations. The

details of this delegation mechanism will be set forth in an

Implementation Agreement between NDEP and EPA.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

interim approval. Copies of NDEP's submittal and other information

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

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

complete file of all the information submitted to, or otherwise

considered by, EPA in the development of this proposed 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 September 6, 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 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.

D. Unfunded Mandates Act

Under Section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a budgetary impact statement to accompany any proposed or

final rule that includes a federal mandate that may result in estimated

costs to state, local, or tribal governments in the aggregate; or to

the private sector, of $100 million or more. Under Section 205, EPA

must select the most cost-effective and least burdensome alternative

that achieves the objectives of the rule and is consistent with

statutory requirements. Section 203 requires EPA to establish a plan

for informing and advising any small governments that may be

significantly or uniquely impacted by the rule.

EPA has determined that the proposed approval action promulgated

today does not include a federal mandate that may result in estimated

costs of $100 million or more to either state, local, or tribal

governments in the aggregate, or to the private sector. This federal

action approves pre-existing requirements under state law, and imposes

no new federal requirements. Accordingly, no additional costs to state,

local, or tribal governments, or to the private sector, result from

this action.

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.

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

Dated: July 28, 1995.

Nora L. McGee,

Acting Regional Administrator.

[FR Doc. 95-19402 Filed 8-4-95; 8:45 am]

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