Clean Air Act Proposed Interim Approval of Operating Permits Program; Kentucky Natural Resources and Environmental Protection Cabinet

[[Page 46072]]

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[KY-95-01-FRL-5290-4]

Clean Air Act Proposed Interim Approval of Operating Permits

Program; Kentucky Natural Resources and Environmental Protection

Cabinet

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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

the operating permits program submitted by the Kentucky Natural

Resources and Environmental Protection Cabinet (NREPC) for the purpose

of complying with Federal requirements which mandate that states

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

all major stationary sources, and to certain other sources.

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

October 5, 1995.

ADDRESSES: Written comments on this action should be addressed to Carla

E. Pierce, Chief, Air Toxics Unit/Title V Program Development Team, Air

Programs Branch, at the EPA Region 4 office listed below. Copies of

Kentucky'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:

Environmental Protection Agency, Region 4 Air Programs Branch, 345

Courtland Street, NE, Atlanta, Georgia 30365.

Division for Air Quality, Department for Environmental Protection,

Natural Resources and Environmental Protection Cabinet, 803 Schenkel

Lane, Frankfort, Kentucky 40601.

FOR FURTHER INFORMATION CONTACT: Yolanda Adams, Title V Program

Development Team, Air Programs Branch, Air, Pesticides & Toxics

Management Division, U.S. Environmental Protection Agency, Region 4,

345 Courtland Street, NE, Atlanta, Georgia 30365, (404) 347-3555, Ext.

4149.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the Clean Air Act Amendments (sections

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

which define the minimum elements of an approvable state operating

permits program and the corresponding standards and procedures by which

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

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

codified at 40 Code of Federal Regulations (CFR) part 70. Title V

requires states to develop, and submit to EPA, programs for issuing

these operating permits to all major stationary sources and to certain

other sources.

The Act requires that states develop and submit these programs to

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

each program within one year after receiving the submittal. If the

state's submission is materially changed during the one-year review

period, 40 CFR 70.4(e)(2) allows EPA to extend the review period for no

more than one year following receipt of the additional material. EPA

received Kentucky's title V operating permit program submittal on

January 18, 1994. The Commonwealth provided EPA with additional

material in supplemental submittals dated November 15, 1994, April 14,

1995, May 3, 1995, and May 22, 1995. Because these supplements

materially changed the Commonwealth's title V program submittal, EPA

has extended the review period and will work expeditiously to

promulgate a final decision on Kentucky's program.

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. Where a state requests source

category-limited interim approval and demonstrates compelling reasons

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

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.

B. Federal Oversight and Sanctions

If EPA were to finalize this proposed source category-limited

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, the Commonwealth of Kentucky would be

protected from sanctions, and EPA would not be obligated to promulgate,

administer and enforce a Federal permits program for the Commonwealth

of Kentucky. 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 interim approval, as does the 3-year time period for

processing the initial permit applications.

Following final interim approval, if the Commonwealth of Kentucky

failed to submit a complete corrective program for full approval by the

date 6 months before expiration of the interim approval, EPA would

start an 18-month clock for mandatory sanctions. If the Commonwealth of

Kentucky 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 the Commonwealth

of Kentucky had corrected the deficiency by submitting a complete

corrective program. Moreover, if the Administrator found a lack of good

faith on the part of the Commonwealth of Kentucky, both sanctions under

section 179(b) would apply after the expiration of the 18-month period

until the Administrator determined that the Commonwealth of Kentucky

had come into compliance. In any case, if, six months after application

of the first sanction, Kentucky 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

Kentucky'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 Kentucky

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 the

Commonwealth of Kentucky, both sanctions under section 179(b) would

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

Administrator determined that the Commonwealth of Kentucky had come

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

first sanction, Kentucky 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 Kentucky has

not timely submitted a complete corrective program or EPA has

disapproved a submitted corrective program. Moreover, if EPA has not

granted full

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approval to Kentucky's 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 the

Commonwealth of Kentucky upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

The Commonwealth of Kentucky has requested source category-limited

interim approval of its part 70 operating permits program. EPA has

concluded that the operating permit program submitted by Kentucky

substantially meets the requirements of title V and part 70, and

proposes to grant source category-limited interim approval to the

program. For detailed information on the analysis of Kentucky's

submission, please refer to the Technical Support Document (TSD)

contained in the docket at the address noted above.

1. Support Materials

Pursuant to section 502(d) of the Clean Air Act as amended (1990

Amendments), the Governor of each state must develop and submit to the

Administrator an operating permits program under state or local law or

under an interstate compact meeting the requirements of title V of the

Act. Kentucky submitted, under the signature of Governor Brereton C.

Jones, the operating permits program, prepared by the NREPC, to be

implemented in all areas of the Commonwealth of Kentucky, except

Jefferson County. Kentucky has requested that the EPA approve its

operating permit program as a source category-limited interim program

for a period of two years.

The Kentucky Federal Operating Permits program description, Section

II of the submittal, addresses 40 CFR 70.4(b)(1) by describing how the

NREPC intends to carry out its responsibilities under the part 70

regulations. This program description has been deemed to be appropriate

for meeting the requirement of 40 CFR 70.4(b)(1).

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

legal opinion from the attorney general (or the attorney for the state

air pollution control agency that has independent legal counsel)

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

operating permits program. The Commissioner of the Department of Law,

who qualifies as independent legal counsel for the Kentucky Natural

Resources and Environmental Protection Cabinet, submitted such an

opinion in Section IV of the submittal, demonstrating adequate legal

authority as required by Federal law and regulation for interim

approval.

Section 70.4(b)(4) requires the submission of relevant permitting

program documentation not contained in the regulations, such as permit

application forms, permit forms and relevant guidance to assist in the

implementation of the permit program. Section V of the NREPC submittal

includes the permit application form with instructions, and Section 4

of the Title V Addendum includes a model permit. It has been determined

that the application forms and model permit substantially meet the

requirements of 40 CFR 70.5(c).

2. Regulations and Program Implementation

The Commonwealth of Kentucky has submitted Rule 401 KAR 50:034,

``Permit Application Form'', Rule 401 KAR 50:035, ``Permits,'' and Rule

401 KAR 50:038, ``Air Emissions Fee,'' for implementing the Kentucky

part 70 program as required by 40 CFR 70.4(b)(2). Sufficient evidence

of their procedurally correct adoption is included in Sections 1 and 4

of Kentucky's Title V Plan Addendum. Copies of all applicable

Commonwealth statutes and regulations which authorize the part 70

program, including those governing Commonwealth administrative

procedures, were submitted with Kentucky's program.

The Kentucky program, in Rule 401 KAR 50:035 Section 2,

substantially meets the requirements of 40 CFR 70.2 and 70.3 with

regard to applicability. However, Kentucky's definitions of ``emissions

unit'', and ``stationary source'' do not include emissions of any

pollutant listed under section 112(b) of the Act. Therefore, Kentucky's

program does not require emissions of all hazardous air pollutants

(HAP) listed pursuant to section 112(b) to be counted for major source

applicability. The pollutants listed in section 112(b) are not

considered regulated air pollutants until addressed by an applicable

requirement, such as a maximum achievable control technology (MACT)

standard; therefore, this omission in Kentucky's definitions prevents

issuance of permits to sources that emit section 112(b) pollutants

which are not yet covered by an applicable requirement. In addition,

Kentucky's definition of ``regulated air pollutant'' found in 401 KAR

50:035, Section 1(28)(a)4., omits the phrase in the part 70 definition

of regulated air pollutant ``* * * or other requirements established

under Section 112 of the Act,* * *''; therefore, Kentucky's program

does not require permits for all major sources. Since these omissions

in Kentucky's definitions could cause certain part 70 major sources to

be exempted from the permit process, Kentucky's program is eligible for

receiving source category-limited interim approval (SCL).

Section 503(c) of the Act requires that permitting authorities,

including those implementing an interim program, establish a schedule

for issuing the permits subject to the program such that ``at least

one-third of such permits will be acted on by such authority annually

over a period not to exceed 3 years after such effective date.'' By

rulemaking, the EPA spelled out an option by which it can make SCL

interim approval. Thus, although the State is required to issue permits

within 3 years to all sources subject to the interim approval, some

sources will not be subject to the requirement to obtain a permit until

full approval is granted. Because those part 70 sources not addressed

until the full approval are also subject to the 3-year phase-in

required by section 503(c), completion of the initial permitting of all

part 70 sources might not be completed until as late as 5 years after

the granting of interim approval.

Kentucky submitted a request dated May 22, 1995, for the EPA to

grant SCL interim approval of its part 70 operating permit program. The

EPA policy memo from John Seitz, Director of the Office of Air Quality

Planning and Standards dated August 2, 1993, entitled ``Interim Title V

Program Approvals'' establishes the criteria for granting interim

approvals. EPA can grant SCL interim approval to states whose programs

do not provide for permitting all required sources if the state makes a

showing that two criteria were met: (1) That there were ``compelling

reasons'' for the exclusions and (2) that all required sources will be

permitted on a schedule that ``substantially meets'' the requirements

of part 70.

EPA considers the omissions in Kentucky's definitions of

``emissions unit'', ``stationary source'', and ``regulated air

pollutant'', as compelling reasons for granting SCL interim approval.

Kentucky's SCL interim approval request included a revised transition

schedule that demonstrates the Commonwealth will permit at least 60% of

its sources and at least 80% of its emissions during the first three

years. The revised transition plan demonstrates that all part 70

sources will be permitted on a schedule that substantially meets the

requirements of part 70.

The EPA is therefore proposing to grant Kentucky SCL interim

approval.

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SCL interim approval will allow Kentucky to implement the revised

transition schedule to permit all part 70 sources during the transition

period after the permit regulations have been revised. Revision of the

aforementioned definitions is a condition of full program approval.

Kentucky's program meets the following requirements set out in

EPA's part 70 operating permits program review. These requirements are

addressed in Kentucky's Rule 401 KAR 50:035 as follows: (A) Permit

applications (40 CFR 70.5), Section 3; (B) Provisions for permit

content (40 CFR 70.6), Section 4; (C) Operational flexibility

provisions (40 CFR 70.4(b)(12)), Sections 4 and 6; (D) Provisions for

permit renewals, reopenings, and public participation (40 CFR 70.7),

Sections 5, 6, and 7; (E) Permit review by EPA and affected states (40

CFR 70.8), Sections 8 and 9. The Kentucky Revised Statutes, Chapter

224, satisfy the requirements of 40 CFR 70.11 for enforcement

authority. The Kentucky program substantially meets the requirements of

40 CFR 70.7 with regard to permit issuance and revisions. Rule 401 KAR

50:035 Section 5(2)(a) allows for the incorporation of a

preconstruction permit into the title V permit as an administrative

amendment. Section 1(3)(e) defines administrative amendment as a

revision to a permit that incorporates into the part 70 permit

requirements from preconstruction review permits, if the

preconstruction review meets procedural requirements substantially

equivalent to those that would be applicable to the change if it were

subject to review as a permit revision (i.e., requirements of 40 CFR

70.7 and 70.8). Even though Section 5(2)(a) details the actual

procedural requirements necessary to incorporate preconstruction

permits into part 70 permits, it does not provide for EPA review

consistent with 40 CFR 70.8. For full approval of the Commonwealth's

program, Kentucky would need to revise Rule 401 KAR 50:035 Section

5(2)(a) to provide for EPA review consistent with 40 CFR 70.8.

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 purposes of determining complete applications.

Section 70.5(c) 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 70.5(c) also 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. 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.

Kentucky establishes criteria for insignificant activities in Rule

401 KAR 50:035, Subsection 2(3); however, these criteria require that

all activities be included in the application. By requiring description

in the application, Kentucky's rule nullifies the effect of allowing

for insignificant activities as contemplated by the part 70 rule, which

would allow no or minimal description in the application. Since part 70

does not require a State to establish provisions for insignificant

activities, this does not create a program approval issue. However,

Kentucky has indicated to EPA that it plans to revise these provisions

to take advantage of the flexibility allowed by Part 70. EPA will

evaluate such revisions when they are submitted.

Part 70 of the operating permits regulations requires prompt

reporting of deviations from the permit requirements. Section

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

in relation to the degree and type of deviation 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.

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

semiannual reporting requirement, given that this is a distinct

reporting obligation under 40 CFR 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 require sufficiently prompt reporting

of deviations. Rule 401 KAR 50:035, Subsection 4(1)(c)3.b. states that

Kentucky will define prompt reporting in the permit in relation to the

degree and type of deviation likely to occur and the applicable

requirements.

Subsection 2(6) of Kentucky's general compliance requirements

regulation, Rule 401 KAR 50:055, provides the Commonwealth the

authority to grant individual variances for opacity standards for

emissions from a stack or a control device. The Commonwealth provides

that it will grant this variance upon a demonstration by the owner or

operator that the affected facility and associated air pollution

control equipment were operated and maintained in a manner to minimize

the opacity of emissions during the performance tests. The EPA regards

this provision as wholly external to the program submitted for approval

under Part 70, and consequently proposes to take no action on these

provisions of Commonwealth law in this rulemaking. 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. In

other words, a variance does not affect the title V source until the

title V permit is modified pursuant to the procedures in part 70. EPA

reserves the right to enforce the terms of the part 70 permit where the

permitting authority purports to grant relief from the duty to comply

with a Part 70 permit in a manner inconsistent with Part 70 procedures.

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.''

The complete Kentucky operating permits program submittal and the

TSD are available for review for more detailed information. The TSD

contains the detailed analysis of Kentucky's program and describes the

manner in which Kentucky's program meets all of the operating permit

program requirements of 40 CFR part 70.

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 (Consumer Price Index (CPI) adjusted from 1989). The $25

per ton amount is presumed, for program approval, to be sufficient to

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cover all reasonable program costs and is thus referred to as the

``presumptive minimum.''

Kentucky has opted to adopt an approach similar to the

``presumptive minimum'' of $25/ton (annually adjusted by the CPI)

approach. Emission fees will be collected from all sources subject to

title V for actual emissions of each regulated pollutant, except carbon

monoxide. Also, fees will be assessed on the first 4,000 tons per

regulated pollutant per facility. A minimum fee of $150 is assessed for

sources emitting less than 25 tons per year.

A unique feature of the Kentucky emission fee is that the amount of

fee to be collected is established in regulation. Kentucky Rule 401 KAR

50:038 provides for the collection of $6,594,700 during state fiscal

year 1995-96. It further provides the authority to collect an amount

during each subsequent fiscal year, increased in direct proportion to

the CPI if needed to fund the program. While this guarantees that

Kentucky will continue to have the funds necessary to operate the title

V program at a level at least equal to the 1995-96 level, it does not

guarantee that the cost per ton of emissions will increase at a rate

equal to the CPI.

For 1995-96, Kentucky estimates the total billable emissions to be

211,919 tons. Based upon that estimate, the average cost per ton for

all sources, including any non-major sources subject to the title V

program, in 1995-96 will be $31.19 per ton. If the fee was collected

only from major sources, the estimated cost per ton would be $34.32 per

ton. Kentucky has demonstrated that the fees collected will be

sufficient to administer the program.

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

a. Authority and/or Commitments for Section 112 Implementation.

Kentucky has demonstrated in its title V program submittal broad legal

authority to incorporate into permits and enforce all applicable

requirements. This legal authority is contained in Kentucky's enabling

legislation and in regulatory provisions defining ``applicable

requirements'' and stating that the permit must incorporate all

applicable requirements. Kentucky has further supplemented its broad

legal authority with a commitment to ``take action, following

promulgation by EPA of regulations implementing section 112 of Title

III of the Clean Air Act to either incorporate such new or revised

provisions by reference into Kentucky rules or submit Kentucky-drafted

rules, for EPA approval, to implement these provisions.'' EPA has

determined that this commitment, in conjunction with Kentucky's broad

statutory and regulatory authority, adequately assures compliance with

all section 112 requirements. EPA regards this commitment as an

acknowledgement by Kentucky of its obligation to obtain further

regulatory authority as needed to issue permits that assure compliance

with section 112 applicable requirements. This commitment does not

substitute for compliance with part 70 requirements that must be met at

the time of program approval.

EPA is interpreting the above legal authority and commitment to

mean that Kentucky is able to carry out all section 112 activities. For

further rationale on this interpretation, please refer to the Technical

Support Document accompanying this proposed interim approval.

b. Implementation of Section 112(g) Upon Program Approval. EPA

issued an interpretive notice on February 14, 1995 (60 FR 8333), which

outlines EPA's revised interpretation of section 112(g) applicability.

The notice postpones the effective date of section 112(g) until after

EPA has promulgated a rule addressing that provision. The notice sets

forth in detail the rationale for the revised interpretation.

The section 112(g) interpretative notice 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), Kentucky must have a

Federally enforceable mechanism for implementing section 112(g) during

the period between promulgation of the Federal section 112(g) rule and

adoption of implementing Commonwealth regulations.

EPA is aware that Kentucky lacks a program designed specifically to

implement section 112(g). However, Kentucky does have a preconstruction

review program within its permits rule that can serve as an adequate

implementation vehicle during the defined transition period because it

would allow the Commonwealth to select control measures that would meet

MACT, as defined in section 112, and incorporate these measures into a

Federally enforceable preconstruction permit.

For this reason, EPA proposes to approve the use of Kentucky's

preconstruction review program found in Rule 401 KAR 50:035, under the

authority of title V and part 70, solely for the purpose of

implementing section 112(g) to the extent necessary during the

transition period between section 112(g) promulgation and adoption of a

Commonwealth rule implementing EPA's section 112(g) regulations.

Although section 112(l) generally provides authority for approval of

state air programs to implement section 112(g), title V and section

112(g) provide for this limited approval because of the direct linkage

between the implementation of section 112(g) and title V. The scope of

this approval is narrowly limited to section 112(g) and does not confer

or imply approval for purpose of any other provision under the Act

(e.g., section 110). This approval will be without effect if EPA

decides in the final section 112(g) rule that sources are not subject

to the requirements of the rule until Commonwealth regulations are

adopted. The duration of this approval is limited to 18 months

following promulgation by EPA of the section 112(g) rule to provide

adequate time for the Commonwealth to adopt regulations consistent with

the Federal requirements.

c. Program for Delegation of Section 112 Standards as Promulgated.

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 Commonwealth's program

contain adequate authorities, adequate resources for implementation,

and an expeditious compliance schedule, which are also requirements

under part 70. Therefore, EPA is also proposing to grant approval under

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

receiving delegation of future section 112 standards that are unchanged

from the Federal standards as promulgated. In addition, EPA proposes

delegation of all existing standards and programs under 40 CFR parts 61

and 63 for part 70 sources and non-part 70 sources.1

[[Page 46076]]

Kentucky has informed EPA that it intends to accept delegation of

section 112 standards through adoption by reference. The details of the

Commonwealth's use of these delegation mechanisms are set forth in a

letter dated April 14, 1995, submitted by Kentucky as a title V program

addendum.

\1\The radionuclide National Emission Standards for Hazardous

Air Pollutant (NESHAP) is a section 112 regulation and therefore,

also an applicable requirement under the State operating permits

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

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

source definition for radionuclide is promulgated, no source would

be a major section 112 source solely due to its radionuclide

emissions. However, a radionuclide source may, in the interim, be a

major source under part 70 for another reason, thus requiring a part

70 permit. The EPA will work with the State in the development of

its radionuclide program to ensure that permits are issued in a

timely manner.

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d. Commitment to implement Title IV of the Act. The Commonwealth of

Kentucky developed acid rain permit regulations as Rule 401 KAR 50:072,

which was submitted to EPA on April 19, 1995, as part of the operating

permits program. The Commonwealth also submitted standard acid rain

permit application forms which will be revised as updated forms are

provided by the EPA. These rules and permit application forms meet the

requirements of the acid rain program.

B. Proposed Actions

1. Source Category-Limited Interim Approval

The EPA is proposing to grant SCL interim approval to the operating

permit program submitted by Kentucky on December 27, 1993, and as

supplemented on November 15, 1994, April 14, 1995, May 3, 1995, and May

22, 1995. If this approval is promulgated, the State must make the

following changes to receive full approval: (1) Revise the definitions

of ``emissions unit'' and ``stationary source'' to include emissions of

any pollutant listed under section 112(b) of the Act; (2) revise the

definition of ``regulated air pollutant'' to include any pollutant

subject to any requirements established under section 112 of the Act;

and (3) revise Rule 401 KAR 50:035 section 5(2)(a) to provide for EPA

review consistent with 40 CFR 70.8. in order to allow for requirements

from preconstruction review permits to be incorporated into part 70

permits via administrative amendments.

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

period of up to 2 years. During the interim approval period, the

Commonwealth is protected from sanctions for failure to have a program,

and EPA is not obligated to promulgate a Federal permits program in the

Commonwealth. 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 interim

approval, as does the 3-year time period for processing the initial

permit applications.

2. Program for Straight Delegation of Section 112 Standards

As discussed above in section II.A.4.c, EPA is proposing to grant

approval under section 112(l)(5) and 40 CFR 63.91 of the Commonwealth's

program for receiving delegation of future section 112 standards that

are unchanged from Federal standards as promulgated. Additionally, EPA

is proposing to delegate existing standards and programs under 40 CFR

parts 61 and 63 for part 70 sources and non-part 70 sources.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

interim approval. Copies of the Commonwealth's submittal and other

information relied upon for the proposed interim approval are contained

in docket number KY-95-01 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 October 5, 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

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 or local 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

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations, Operating permits,

Reporting and recordkeeping requirements.

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

Dated: August 22, 1995.

Patrick M. Tobin,

Acting Regional Administrator.

[FR Doc. 95-21938 Filed 9-1-95; 8:45 am]

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