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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AR-FRL-5293-1]

Clean Air Act Final Interim Approval of Operating Permits

Program; the State of Arkansas

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 Arkansas Department of Pollution

Control and Ecology (ADPCE) for the State of Arkansas 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: October 10, 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 6, Air Programs Branch

(6PD-R), 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.

Arkansas Department of Pollution Control and Ecology, 8001 National

Drive, Little Rock, Arkansas 72219-8913.

FOR FURTHER INFORMATION CONTACT: Wm. Nicholas Stone, Air Permits

Section (6PD-R), Environmental Protection Agency, Region 6, 1445 Ross

Avenue, Suite 700, Dallas, Texas 75202-2733, telephone (214) 665-7226.

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 require that States develop

and submit Operating Permits programs to the EPA by November 15, 1993,

and that the EPA act to approve or disapprove each program within one

year after receiving the submittal. The EPA's program review occurs

pursuant to section 502 of the Act and the part 70 regulations, which

together outline criteria for approval or disapproval. Where a program

substantially, but not fully, meets the requirements of part 70, the

EPA may grant the program interim approval for a period of up to two

years. If the EPA has not fully approved a program by two years after

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

must establish and implement a Federal program.

On September 19, 1994, the EPA proposed interim approval of the

Operating Permits program for the State of Arkansas. See 59 FR 47828

(September 19, 1994). The EPA received public comment on the proposal

and compiled a Technical Support Document which describes the Operating

Permits program in greater detail. In this document, the EPA is taking

final action to promulgate interim approval of the Operating Permits

program for the State of Arkansas.

II. Final Action and Implications

A. Analysis of State Submission

The State of Arkansas submitted to the EPA, under a cover letter

from the Governor dated October 29, 1993, the State's Operating Permits

program. The submittal has adequately addressed all 16 elements

required for full approval as discussed in part 70, with the exception

of five interim issues listed in the proposal: (1) Reference of

Prevention of Significant Deterioration (PSD) applicability for new

construction and modification, (2) incorporation by reference of the

part 70 provisions regarding complete application requirements and

permit content requirements, (3) revision of the minor modification

procedure, (4) providing a definition of the term ``prompt'', and (5)

submission of a State Implementation Plan (SIP) revision for Regulation

19 consistent with Regulation 26. The State of Arkansas appropriately

addressed all requirements necessary to receive interim approval of the

State Operating Permits program pursuant to title V of the Act and 40

CFR part 70.

B. Response to Comments

Comments were received from three groups during the comment period

that ran from September 19, 1994, until October 19, 1994. Listed below

are the responses to comments received on the proposed interim approval

for the Arkansas Operating Permits program.

1. Section 112(g) Implementation

Comments were made that the EPA should not allow Arkansas to

implement section 112(g) until Federal rulemaking is complete. Also,

objections were made to the State's use of its preconstruction permit

process to implement section 112(g) requirements.

The EPA does not agree with the comment. In its proposed interim

approval of Arkansas' part 70 program, the EPA proposed to approve the

State's preconstruction review program for the purpose of implementing

section 112(g) during the transition period before promulgation of a

Federal rule implementing section 112(g). This proposal was based in

part on an interpretation of the Act that would require sources to

comply with section 112(g) beginning on the date of approval of the

title V program, regardless of whether the EPA had completed its

section 112(g) rulemaking. The EPA has since revised this

interpretation of the Act in a Federal Register notice published on

February 14, 1995, 60 FR 8333. The revised interpretation postpones the

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

rule addressing that provision. The revised notice sets forth in detail

the rationale for the revised interpretation.

The section 112(g) interpretive notice explains that the EPA is

still considering whether the effective date of section 112(g) should

be delayed beyond the date of promulgation of the Federal rule so as to

allow States time to adopt rules implementing the Federal rule, and

that the EPA will provide for any such additional delay in the final

section 112(g) rulemaking. Unless and until the EPA provides for such

an additional postponement of section 112(g), Arkansas must be able to

implement section 112(g) during the transition period between

promulgation of the Federal section 112(g) rule and

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adoption of implementing State regulations.

For this reason, the EPA is finalizing its approval of Arkansas'

preconstruction review program. This approval clarifies that the

preconstruction review program is available as a mechanism to implement

section 112(g) during the transition period between promulgation of the

section 112(g) rule and adoption by Arkansas of rules established to

implement section 112(g). However, since the approval is for the single

purpose of providing a mechanism to implement section 112(g) during the

transition period, the approval itself will be without effect if the

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

subject to the requirements of the rule until State regulations are

adopted. Further, the EPA is limiting the duration of this approval to

18 months following promulgation by EPA of the section 112(g) rule.

The EPA believes that, although Arkansas currently lacks a program

designed specifically to implement section 112(g), the preconstruction

review program will serve as an adequate implementation vehicle during

a transition period because it will allow Arkansas to select control

measures that would meet Maximum Achievable Control Technology, as

defined in section 112, and incorporate these measures into a federally

enforceable preconstruction permit.

2. Title I Modification Definition

Comments were made that the EPA has proposed interim approval of

the Arkansas program because the State definition of title I

modification is inconsistent with the new definition of ``title I

modification'' which the EPA has proposed in the revision to 40 CFR

part 70 (59 FR 44460, August 29, 1994). Comments objected to the EPA's

reinterpretation of title I modification as an interim approval issue.

The EPA does not agree with the comment. As noted in the proposal

for interim approval, the Arkansas Plan of Implementation for Air

Pollution Control SIP at Regulation 19.2 clearly defines a modification

as any increase in emissions. This definition does not provide for a

threshold of emissions that could avoid New Source Review. Therefore,

the threshold of emission levels at Regulation 26.10(b)(1) is

inconsistent with the approved SIP definition of a modification. The

Operating Permits program is consistent with part 70 by disallowing

``title I modifications'' from using the minor modification procedure

at Regulation 26.10(b)(7) which includes actions under the SIP. Because

the SIP is federally approved and the provision at Regulation

26.10(b)(7) is consistent with part 70, it is clear that the provision

at Regulation 26.10(b)(1) is inconsistent with both the existing State

law (the SIP) and with the Federal rule at 40 CFR 70.7(e)(2)(i)(A)(5).

This inconsistency is discussed further under Number 3 below.

The EPA required the State to revise the Operating Permits

regulation because of this inconsistency and required the State to

delete Regulation 26.10(b)(1) because it was inconsistent with the

federally approved definition in the State's SIP. The EPA explained its

reasoning for not allowing the use of a narrower definition of ``title

I modifications'' in the Washington State final approval notice (see 59

FR 55813, November 9, 1994) and incorporates that discussion here by

reference.

3. Minor Modification Process

Comments were made that the EPA lacked the authority to require the

State to revise its minor modification process to delete the emissions

level threshold for minor modification applicability. Comments stated

their belief that the ``20% of the applicable definition of major

source'' constituted a de minimus emissions increase and was allowable

under the minor modification rule contained in part 70.

The EPA does not agree. The Federal rule, 40 CFR 70.7(e)(3)(i),

allows group processing of minor modifications that collectively meet

an emission threshold of 10% of the emissions allowed by the permit for

the emissions unit for which the change is requested, 20% of the

applicable definition of major source, or five tons per year whichever

is less, provided the minor modification criteria for individual

changes at 40 CFR 70.7(e)(2)(i)(A) are also met. The criteria at 40 CFR

70.7(e)(2)(i)(A)(5) and Regulation 26.10(b)(7) disallow changes that

are title I modifications. As discussed under Number 2 above, the SIP

at Regulation 19.2 defines ``modification'' as any increase in

emissions. Because Regulation 26.10(b)(1) allows certain emissions

increases to be processed under the minor modification procedure, the

EPA considers the minor modification process in Regulation 26 to be

inconsistent with itself and the Federal part 70 rule.

The EPA is currently revising part 70 to clarify the definition of

``title I modification'' (see 59 FR 44460, August 29, 1994). After this

revision, the provision at Regulation 26.10(b)(1) might be interpreted

as a de minimis threshold. As the promulgated Federal rule exists and

the federally approved SIP exist, any increase in emissions would not

be allowed under the minor modification procedure. The title I

modification issue is discussed in detail in Number 2 above. The

State's regulations must be consistent with the Federal rule as

currently promulgated. Therefore, the EPA maintains that the State's

regulations are inconsistent with the Federal rule because an emissions

increase is allowed for individual changes under Regulation 26.10(b)(1)

while the State's regulations at Regulation 26.10(b)(7) and the Federal

rule at 40 CFR 70.7(e)(2)(i)(A)(5) disallow emissions increases.

4. Incorporation by Reference of PSD Requirements

Comment was made that the State should not have to formally

incorporate by reference the PSD requirements into Regulation 26 as

stated in the proposal for this action.

The EPA concurs with this comment. The proposal recommended

incorporation of the PSD requirements in order to clarify the

regulation for major sources. The State can effectively meet this

requirement by amending the regulations at 26.3(b) with:

(4) Any source subject to Sec. 19.9 of the Compilation of

Regulations of the Arkansas State Implementation Plan for Air Pollution

Control.

5. PSD Applicability for Constructed/Modified Sources

Comment was made that the EPA should require Arkansas to revise its

operating permit regulation so that the operating permit need only be

revised before a change is placed in operation, rather than before

construction begins.

The EPA does not agree with this comment. The State of Arkansas has

clearly demonstrated that major sources will be regulated by Regulation

26. These sources are required to obtain a modification to the

operating permit that incorporates the applicable requirements

reflected in the SIP (Regulation 19) before construction begins. This

procedure allows the facility to obtain a pre-construction permit as

well as a modification to the operating permit. Also, this process

allows for adequate public comment without duplicating the public

notice process.

If the State chose to revise the regulation as the comment

suggests, the facility would still have to obtain a pre-construction

permit under Regulation 19 before construction. This includes the

requirement of full public review for significant modifications. Then,

the

[[Page 46773]]

facility would have to obtain a significant modification for the

operating permit under Regulation 26 before operating the modified

unit.

6. Deviation Reporting

All three comments objected to the EPA requirement that the State

define ``prompt'' in the regulations with respect to deviations.

The EPA concurs with these comments. The notice for proposed

approval reflected the most prudent position the EPA could take that

would offer clear guidance to the regulated community while protecting

the environment. Since publication of the notice, the EPA has

reconsidered this position and agrees with the comments that the term

``prompt'' may be defined in the permit.

The EPA maintains that ``prompt'' should be defined as two to ten

days after a deviation. This timeframe is sufficient in most cases to

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

potential problems. The regulating authority should give consideration

to shorter timeframes where potential health and safety concerns exist.

Where ``prompt'' is defined in the individual permit but not in the

program regulations, the EPA may veto permits that do not require

sufficiently prompt reporting of deviations.

7. Variance Provisions

Comments objected to the EPA's position that variance provisions

under State statute do not apply to title V permits unless title V

processes are followed.

The EPA does not agree with these comments. As discussed in the

proposed notice, the EPA recognizes the State's statutory authority to

grant variances. However, 40 CFR part 70 does not allow States to grant

variances from title V requirements. The 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 for the

duration of the variance. The EPA also recognizes that Arkansas may

exercise enforcement discretion when addressing permit violations, but

such discretion is not unlimited.

8. Incorporation by Reference of Application and Permit Content

Comment was made that the State should not have to formally

incorporate by reference the application and permit content

requirements from 40 CFR 70.5(c) and 70.6(a-c) into Regulation 26 as

stated in the proposal.

The EPA does not agree with this comment. Though it may appear

clear that the application content and permit content are fully

incorporated into the State regulations, formal incorporation by

reference will provide a date of promulgation to the incorporated

provisions. Changes to the State's program are certain as the Clean Air

Act Amendments are implemented, and in this way the State regulations

are made clear for enforcement and implementation purposes.

C. Final Action

The EPA is promulgating interim approval of the operating permits

program submitted by the State of Arkansas on November 9, 1994. The

State must make the following changes to receive full approval:

1. Incorporation by Reference

The State must amend Regulation 26.4 and 26.7 to incorporate the

date of promulgation of the rule at 40 CFR part 70 as referenced in the

regulation. By incorporating the promulgation date of July 21, 1992,

the State regulations will be made clear.

2. Minor Modification Procedures

The language in the State's Regulation 26.10(b)(1) regarding

emission levels must be deleted to make the regulations consistent with

the Federal rule at 40 CFR 70.7(e)(2)(i)(A) and the State's Regulations

26.10(b)(7) and 19.2.

3. Submission of Regulation 19

The State of Arkansas must ensure consistency between the operating

permits program (Regulation 26) and the SIP (Regulation 19). The State

is working on a revision to Regulation 19.4 to make the SIP consistent

with Regulation 26. A SIP revision must be submitted that is consistent

with the rule at 40 CFR part 70 during the interim approval period.

Arkansas' part 70 program approved in this notice applies to all

part 70 sources (as defined in the approved program) within the State

of Arkansas, except any sources of air pollution over which an Indian

Tribe has jurisdiction. See, e.g., 59 FR 55813, 55815-55818 (November

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 Clean Air Act; see also 59 FR 43956, 43962 (August 25,

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

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

October 8, 1997. During this interim approval period, the State of

Arkansas is protected from sanctions, and the EPA is not obligated to

promulgate, administer and enforce a Federal Operating Permits program

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

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

time period for submittal of permit applications by subject sources

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

three year time period for processing the initial permit applications.

If Arkansas fails to submit a complete corrective program for full

approval by April 8, 1997, the EPA will start an 18 month clock for

mandatory sanctions. If Arkansas then fails to submit a corrective

program that the EPA finds complete before the expiration of that 18

month period, the EPA will apply sanctions as required by section

502(d)(2) of the Act, which will remain in effect until the EPA

determines that the State of Arkansas has corrected the deficiency by

submitting a complete corrective program.

If the EPA disapproves Arkansas' complete corrective program, the

EPA will apply sanctions as required by section 502(d)(2) on the date

18 months after the effective date of the disapproval, unless prior to

that date Arkansas has submitted a revised program and the EPA has

determined that it corrected the deficiencies that prompted the

disapproval.

In addition, discretionary sanctions may be applied where warranted

any time after the expiration of an interim approval period if the

State of Arkansas has not timely submitted a complete corrective

program or the EPA has disapproved its submitted corrective program.

Moreover, if the EPA has not granted full approval to the Arkansas

program by the expiration of this interim approval and that expiration

occurs after November 15, 1995, the EPA must promulgate, administer and

enforce a Federal permits program for the State of Arkansas 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 the EPA as they apply to

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

contain adequate authorities,

[[Page 46774]]

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

Docket

Copies of the State's submittal and other information relied upon

for the final interim approval, including the eight public comments

received and reviewed by the EPA on the proposal, are contained in

docket number OPP-2-9-1 maintained at the EPA Regional Office. The

docket is an organized and complete file of $100 million or more. Under

Section 205, the 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 the EPA to

establish a plan for informing and advising any small governments that

may be significantly or uniquely impacted by the rule.

The EPA has determined that the 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.

Dated: August 25, 1995.

A. Stanley Meiburg,

Acting Regional Administrator (6RA).

Part 70, 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 the

State of Arkansas in alphabetical order to read as follows:

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

Permits Programs

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Arkansas

(a) The ADPCE submitted its Operating Permits program on

November 9, 1993, for approval. Interim approval is effective on

October 10, 1995. Interim approval will expire October 8, 1997.

(b) (Reserved)

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[FR Doc. 95-22086 Filed 9-7-95; 8:45 am]

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