Clean Air Act Proposed Interim Approval of Operating Permits Program; Alabama Department of Environmental Management, Jefferson County Department of Health, and the City of Huntsville Department of Natural Resources and Environmental Management

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AL01; FRL-5295-5]

Clean Air Act Proposed Interim Approval of Operating Permits

Program; Alabama Department of Environmental Management, Jefferson

County Department of Health, and the City of Huntsville Department of

Natural Resources and Environmental Management

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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

the State of Alabama Department of Environmental Management (ADEM) and

the Jefferson County Department of Health (JCDH) operating permits

programs. The EPA also proposes interim approval of the City of

Huntsville Department of Natural Resources and Environmental Management

(City of Huntsville) operating permits program. These proposed

approvals are 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 13, 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 EPA Region 4 Office listed below. Copies of the

State'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.

FOR FURTHER INFORMATION CONTACT: Joel Huey, 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. 4170.

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

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 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 Part 70.4(e)(2) allows EPA to extend the review period

for no more than one year following receipt of the additional material.

The EPA received title V operating permits program submittals from the

ADEM, JCDH, and City of Huntsville on December 15, 1993; December 14,

1993; and November 15, 1993, respectively. The ADEM provided EPA with

additional material in supplemental submittals dated March 3, 1994;

March 18, 1994; June 5, 1995; July 14, 1995; and August 28, 1995. The

JCDH and City of Huntsville provided EPA with additional material in

supplemental submittals dated July 14, 1995, and July 20, 1995,

respectively. Because these supplements materially changed the title V

program submittals, EPA has extended the review period and will work

expeditiously to promulgate a final decision on all programs.

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, EPA may also grant such an interim approval. If EPA

has not fully approved a program by two years after November 15, 1993,

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 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 ADEM, JCDH, and City of Huntsville would be protected from

sanctions, and EPA would not be obligated to promulgate, administer and

enforce a Federal permits program for the ADEM, JCDH, and City of

Huntsville. 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.

Following final interim approval, if the ADEM, JCDH, or City of

Huntsville 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

the ADEM, JCDH, or City of Huntsville 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 a complete corrective program had been

submitted. Moreover, if the Administrator found a lack of good faith on

the part of the ADEM, JCDH, or City of Huntsville, both sanctions under

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

until the Administrator determined that the department had come into

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

sanction, the ADEM, JCDH, or City of Huntsville 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 the

ADEM, JCDH, or City of Huntsville'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 the ADEM, JCDH, or City of Huntsville 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 ADEM, JCDH,

or City of Huntsville, both sanctions under section 179(b) would apply

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

determined that the department had come into compliance. In all cases,

if, six months after EPA applied the first sanction, the ADEM, JCDH, or

City of Huntsville had not submitted a revised program that EPA had

determined corrected the

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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 the ADEM, JCDH,

or City of Huntsville 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 the ADEM, JCDH, or

City of Huntsville'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

ADEM, JCDH, or City of Huntsville upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

The EPA has concluded that the operating permits programs submitted

by the ADEM, JCDH, and City of Huntsville substantially meet the

requirements of title V and part 70, and proposes to grant interim

approval to the programs. For detailed information on the analysis of

the State'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. The ADEM, JCDH, and City of Huntsville requested, under the

signature of James W. Warr, Director of the ADEM and governor's

designee, interim approval to administer the State and Locals operating

permits program submittals in all areas of the State of Alabama with

the exception of Indian reservations and tribal lands. The ADEM and

JCDH also requested source category-limited interim approval.

The ADEM, JCDH, and City of Huntsville operating permits program

submittals do not assert jurisdiction over Indian lands or reservations

for purposes of 40 CFR part 70 and title V. The EPA will, at a future

date, conduct a Federal title V operating permits program governing

title V sources of air emissions on Indian lands and reservations in

Alabama.

The ADEM submittal, provided as Section 1--``Complete Program

Description,'' addresses 40 CFR 70.4(b)(1) by describing how the ADEM

intends to carry out its responsibilities under the part 70

regulations. The JCDH and City of Huntsville submittals also provided

descriptions of how they intend to carry out their responsibilities

under the part 70 regulations. They are included in Section 1 of the

JCDH submittal and Section 2 of the City of Huntsville submittal. The

program descriptions have 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 ADEM, JCDH, and City of Huntsville have

submitted legal opinions showing adequate legal authority as required

by Federal law and regulation. However, their legal opinions also state

that the ADEM, JCDH, and City of Huntsville do not have adequate

criminal authority as required by 40 CFR 70.11(a)(3)(ii)-(iii). This

lack of criminal authority precludes the ADEM, JCDH, and City of

Huntsville from obtaining full approval of their title V programs.

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 2 of the ADEM submittal,

Attachment I of the JCDH submittal, and Section 8 of the City of

Huntsville submittal include the permit application forms. The permit

application forms meet the requirements of 40 CFR 70.5(c).

2. Regulations and Program Implementation

The ADEM submitted Regulation 335-3-16 (``Major Source Operating

Permit'') and Regulation 335-1-7 (``Air Division Operating Permit

Fees'') for implementing the State part 70 program as required by 40

CFR 70.4(b)(2). Sufficient evidence of their procedurally correct

adoption was included in Sections 3 and 4 of the ADEM submittal. The

JCDH submitted Chapter 18 (``Major Source Operating Permits'') and

Chapter 16 (``Operating Permit Fees'') of the Air Pollution Control

Rules and Regulations for implementing their part 70 program.

Sufficient evidence of their procedurally correct adoption was included

in Attachment 3 of the JCDH submittal. The City of Huntsville submitted

Regulations 3.1 (``General Provisions''), 3.6 (``Permit Application

Fees''), 3.7 (``Major Source Operating Permit Annual Emissions Fees''),

and 3.9 (``Major Source Operating Permit'') of the Air Pollution

Control Rules and Regulations for implementing their part 70 program.

Sufficient evidence of their procedurally correct adoption was included

in Section 4 of the City of Huntsville's submittal. Copies of all

applicable State/Local statutes and regulations that authorize the part

70 program, including those governing State/Local administrative

procedures, were included with the submittals.

The following requirements, set out in EPA's part 70 operating

permits program review, are addressed in Section 3 of the ADEM

submittal: (A) Applicability requirements, [40 CFR 70.3(a)]: 335-3-16-

.03; (B) Permit application requirements, [40 CFR 70.5]: 335-3-16-.04;

(C) Provisions for permit content, [40 CFR 70.6]: standard permit

requirements: 335-3-16-.05(1); permit duration: 335-3-16-.05(2);

monitoring and related recordkeeping and reporting requirements: 335-3-

16-.05(3); compliance requirements: 335-3-16-.06 and .07; (D)

Provisions for permit issuance, renewals, reopenings and revisions, [40

CFR 70.7]: 335-3-16-.12 and 335-3-16-.13; and (E) Permit review by EPA

and affected State, including public participation [40 CFR 70.6]: 335-

3-16-.15.

The following requirements, set out in EPA's part 70 operating

permits program review, are addressed in Attachment 3 of the JCDH

submittal: (A) Applicability requirements, [40 CFR 70.3(a)]: Regulation

18.3; (B) Permit application requirements, [40 CFR 70.5]: Regulation

18.4; (C) Provisions for permit content, [40 CFR 70.6]: standard permit

requirements: Regulation 18.5.1; permit duration: Regulation 18.5.2;

monitoring and related recordkeeping and reporting requirements:

Regulation 18.5.3; compliance requirements: Regulations 18.7 and 18.7;

(D) Provisions for permit issuance, renewals, reopenings and revisions,

[40 CFR 70.7]: Regulations 18.12 and 18.13; and (E) Permit review by

EPA and affected State, including public participation [40 CFR 70.6]:

Regulation 18.14.

The following requirements, set out in EPA's part 70 operating

permits program review, are addressed in Section 4 of the City of

Huntsville submittal: (A) Applicability requirements, [40 CFR 70.3(a)]:

Regulation 3.9.1; (B) Permit application requirements, [40 CFR 70.5]:

Regulation 3.9.2; (C) Provisions for permit content, [40 CFR 70.6]:

standard permit requirements: Regulation 3.9.5(a);

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permit duration: Regulation 3.9.5(b); monitoring and related

recordkeeping and reporting requirements: Regulations 3.9.5(c),

3.9.5(d) and 3.9.5(e); compliance requirements: Regulations 3.9.6 and

3.9.7; (D) Provisions for permit issuance, renewals, reopenings and

revisions, [40 CFR 70.7]: Regulations 3.9.10 and 3.9.11; and (E) Permit

review by EPA and affected State, including public participation [40

CFR 70.6]: Regulation 3.9.13.

Alabama statutes 22-22A-5(18) and (19) provide civil enforcement

authority consistent with 40 CFR 70.11, including authority to recover

penalties and fines in a maximum amount of not less than $10,000 per

day per violation. However, current statutes do not provide adequate

authority to assess monetary criminal penalties as required by the Act.

Section 70.11(a)(3) (ii) and (iii) require criminal fines recoverable

against any person who knowingly violates any applicable requirement,

any permit condition, or any fee or filing requirement; knowingly makes

any false material statement, representation or certification in any

form, in any notice or report required by a permit; or who knowingly

renders inaccurate any required monitoring device or method. These

fines shall be recoverable in a maximum amount of not less than $10,000

per day per violation. Section 22-28-22(d) of the Alabama Air Pollution

Control Act provides that any person who knowingly violates or fails or

refuses to obey or comply with that chapter or who knowingly submits

any false information under that chapter shall be guilty of a

misdemeanor and, upon conviction, may be sentenced to hard labor for

not more than a year. To receive full program approval, the State of

Alabama must amend its state law to provide for adequate criminal fines

consistent with 40 CFR 70.11.

The ADEM title V program will implement a two-step process for

application completeness, first determining an application to be

administratively complete, then requiring application updates as needed

to support draft permit preparation. The ADEM has committed in a letter

to EPA dated August 28, 1995, to requiring initial applications that:

(1) define the part 70 applicable requirements and major/minor source

status, (2) certify compliance status with respect to all applicable

requirements, (3) allow the permitting authority to determine the

approved permit issuance schedule, and (4) include certifications of

application truth, accuracy, and completeness. The EPA notes that this

type of flexibility is appropriate and has outlined guidance in section

II.D. of the July 25, 1995, White Paper for Streamlined Development of

Part 70 Permit Applications. The JCDH and City of Huntsville programs

require all title V sources to submit complete applications within 12

months of interim approval.

Section 70.5(d) requires that any application form, report, or

compliance certification submitted pursuant to the title V regulations

shall contain a certification by a responsible official that, based on

information and belief formed after reasonable inquiry, the statements

and information in the document are true, accurate, and complete. ADEM

Regulation 335-3-16-.04(9)(a) (JCDH Regulation 18.4.9(a) and City of

Huntsville Regulation 3.9.4(a)) satisfies this requirement. ADEM

Regulation 335-3-16-.04(9)(b) (JCDH Regulation 18.4.9(b) and City of

Huntsville Regulation 3.9.4(b)) adds the following condition:

``Certification for completeness shall not be required for initial

applications that will not be processed in the first year the

regulations in this chapter are effective.'' Since applications will be

received from all sources by the end of the first year following

program approval, and these applications will meet the requirements

listed above, ADEM Regulation 335-3-16-.04(9)(b) (JCDH Regulation

18.4.9(b) and City of Huntsville Regulation 3.9.4(b)) must be deleted

from the State's regulations.

The ADEM and JCDH define ``insignificant activity'' as any air

emission or air emissions unit at a plant that has the potential to

emit less than 5 tons per year of any criteria pollutant or less than

1,000 pounds per year of any hazardous air pollutant (HAP). The City of

Huntsville's program defines ``insignificant activity'' as any air

emission or air emissions unit at a plant that the Director has

determined to be insignificant and has been included by the Director on

a list of insignificant emission levels or insignificant emissions

units. All three programs require that insignificant activities be

listed in the permit application forms. The programs also define

``trivial activity'' as any air emission from a unit that is considered

inconsequential, as determined by the Director/Health Officer, and do

not require that trivial activities be listed in the permit application

forms. To obtain full approval, the program regulations must clarify

that emissions thresholds for individual activities or units that are

exempted will not exceed the lesser of 1,000 pounds per year or section

112(g) de minimis levels for HAPs. The State may, however, set higher

levels of emissions thresholds upon demonstration that the higher

levels are insignificant.

The ADEM, JCDH, and City of Huntsville programs provide that the

Director/Health Officer will maintain a list of air emissions or air

emissions units that are considered to be insignificant activities and

a list of air emissions units or changes in air emissions that have

been determined to be trivial. The ADEM, JCDH, and City of Huntsville

programs do not include the list of insignificant activities as part of

their regulations nor do they require review and approval of them by

EPA. 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 the 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. To obtain full approval the State and the local agencies

must revise their approach on insignificant activities such that the

list is made available for EPA and public review and comment each time

the list is revised.

The ADEM, JCDH, and City of Huntsville programs also lack assurance

that insignificant activities will not be exempted from title V

permitting requirements or excluded from major source applicability

determinations. Section 70.5(c) states that a part 70 permit

application ``may not omit information needed to determine the

applicability of, or to impose, any applicable requirement, or to

evaluate the fee amount required under the schedule approved * * *'' To

obtain full approval, the State and the Local agencies must revise

their regulations consistent with section 70.5(c) to ensure that

emissions units with applicable requirements will not be exempted from

title V permitting requirements or major source applicability

determinations, even if listed on an approved list of insignificant

activities.

Sections 70.4(b)(3)(iii) and 70.6(a)(2) state that operating

permits programs must issue permits for a fixed term of five years in

the case of permits with acid rain provisions and issue all other

permits for a period not to exceed five years, except for permits

issued for solid waste incineration units combusting municipal waste

subject to standards under section 129(e) of the Act. ADEM Regulation

335-3-16-.05(2)(c) (JCDH Regulation 18.5.2(c) and City of Huntsville

Regulation 3.9.5(b)(3)) states: ``Permits which are issued for new

emission units before the unit becomes operational shall be effective

for five years after operation of the unit

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commences.'' The EPA interprets this provision to mean that facilities

may be issued ``merged'' new source review (NSR)-operating permits such

that an operating permit has a future effective date, and the

expiration date would be five years from the effective date. Operating

permits would not be issued with a term longer than five years (except

for the case of solid waste incineration units). A ``merged'' NSR-

operating permit is not a title V permit until the source commences

operation. Also, the title V permit will not become effective if new

requirements become applicable to the source (or if other factors

change that would render the operating permit invalid) until the permit

is revised to reflect these changes.

The ADEM, JCDH, and City of Huntsville rules provide for

operational flexibility in accordance with 40 CFR 70.4(b)(12)(i).

However, the following provisions regarding trading of emissions under

a Federally enforceable emissions cap are not provided for:

(a) The program shall require the permitting authority, if a permit

applicant requests it, to issue permits that contain terms and

conditions, including all standard permit requirements and compliance

requirements, allowing for the trading of emissions increases and

decreases in the permitted facility solely for the purpose of complying

with a Federally enforceable emissions cap that is established in the

permit independent of otherwise applicable requirements. [See 40 CFR

Part 70.4(b)(12)(iii)]

(b) The permit application shall include additional information as

determined to be necessary by the permitting authority to define

alternative operating scenarios identified by the source or to define

permit terms and conditions for the trading of emissions increases and

decreases in the permitted facility. [See 40 CFR Part 70.5(c)(7)]

(c) The permit shall include terms and conditions, if the permit

applicant requests them, for the trading of emission increases and

decreases in the permitted facility, to the extent that the applicable

requirements provide for trading such increases and decreases without a

case by case approval of each emissions trade. [See 40 CFR Part

70.6(a)(10)]

As a prerequisite for full program approval, the ADEM, JCDH, and

City of Huntsville regulations must rectify this lack of flexibility on

emissions trading procedures. However, EPA notes that the flexibility

provisions of 40 CFR part 70 are under revision due to litigation on

the rule. The EPA will allow the State/local programs to make these

changes according to the revisions to part 70 when published in order

to avoid duplicative rulemaking.

ADEM Regulation 335-3-16-.04(8)(b)(3) (JCDH Regulation 18.4.8(c)(3)

and City of Huntsville Regulation 3.9.3(c)(3)) states that the permit

application shall include ``emission rates of all pollutants in tons

per year and in such terms as are necessary to establish compliance

consistent with the applicable standard reference test method, or

alternative method approved by the Department's Director.'' The State

cannot be granted authority to approve alternatives to standard

reference test methods that are specified by applicable requirements.

Performance tests shall be conducted in accordance with the procedures

set forth in 40 CFR Parts 60, 61 and 63 unless alternate methods or

procedures are approved by the EPA Administrator. Although the

Administrator retains the exclusive right to approve equivalent or

alternate test methods as specified in 40 CFR 60.8(b)(2) and (3),

61.13(h)(1)(ii), and 63.7(e)(2)(ii), the State may approve minor

changes in methodology provided these changes are reported to EPA.

While this is not a change to current practice, full program approval

of the ADEM, JCDH, and City of Huntsville Rules will require deletion

of the Department Director's discretion in approving alternatives to

standard reference test methods.

ADEM Regulation 335-3-16-.13(4) (JCDH Regulation 18.13.4 and City

of Huntsville Regulation 3.9.11(d)) requires that significant

modifications be incorporated into operating permits by the same

procedures required for an initial permit application, including public

participation, review by affected States, and review by EPA. The rule

also defines significant modifications as changes that result in a net

emissions increase of any of the pollutants and levels listed in ADEM

Regulation 335-3-14-.04 or .05, or any modifications under NSPS or

NESHAP. This definition of significant modifications is deficient in

that 40 CFR section 70.7(e)(4)(i) requires, at a minimum, the State

program to consider significant modifications to include every

significant change in existing monitoring permit terms or conditions

and every relaxation of reporting or recordkeeping permit terms or

conditions. As a prerequisite for full program approval, the ADEM,

JCDH, and City of Huntsville Rules must be revised to make this

clarification to its definition of significant modifications. However,

EPA notes that the permit revision requirements of 40 CFR part 70 are

under revision due to litigation on the rule. The EPA will allow the

State/local programs to make these changes according to the revisions

to part 70 when published in order to avoid duplicative rulemaking.

ADEM Regulation 335-3-16-.13(1) (JCDH Regulation 18.13.1 and City

of Huntsville Regulation 3.9.11(a)) contains the requirements of 40 CFR

70.7(d) for administrative amendments, but does not require the

Administrator's approval for similar changes allowed by this chapter.

This is inconsistent with 40 CFR 70.7(d)(1)(vi) which requires that, in

order for changes other than those specified in 40 CFR 70.7(d)(i)

through (v) to be made as administrative amendments, they must first be

determined by the Administrator, as part of the approved part 70

program, to be similar to those specified in 70.7(d)(1) (i) through

(iv). For full approval, ADEM Regulation 335-3-16-.13(1)(a)7 (JCDH

Regulation 18.13.1(a)(7) and City of Huntsville Regulation

3.9.11(a)(1)(vii)) must be revised to specifically list the types of

changes that the State proposes to be eligible for processing as

administrative amendments, thus obtaining the Administrator's approval

of such changes as part of the State's part 70 program.

ADEM Regulation 335-3-16-.13(1)(a)6 states that an administrative

permit amendment is a permit revision that ``incorporates into a permit

issued under this chapter the requirements from preconstruction review

permits authorized under this Administrative Code, provided that the

process used meets procedural requirements substantially equivalent to

the requirements of ADEM Admin. Code r. 335-3-16-.12 and 335-3-16-.14

of this chapter * * *.'' This rule lacks the requirement of 40 CFR

70.7(d)(1)(v) for permit review by EPA and affected states. For full

program approval, ADEM Regulation 335-3-16-.13(1)(a)6 must be revised

to include the required EPA and affected states review provisions.

The Alabama Air Pollution Control Act, section 22-28-13, provides

the ADEM, JCDH, and City of Huntsville with authority to grant

individual variances beyond the limitations prescribed in the Alabama

Air Pollution Control Act. This authority is exercised whenever it is

found, upon presentation of adequate proof, that compliance with any

rule or regulation, requirement, or order of the commission would

impose serious hardship without equal or greater benefits to the public

and that the emissions occurring, or proposed to occur, do not endanger

or tend to endanger human health or safety,

[[Page 47526]]

human comfort, or aesthetic values. The EPA regards this provision as

wholly external to the program submitted for approval under part 70,

and consequently is proposing to take no action on this provision of

State law. The EPA has no authority to approve provisions of State law,

such as the variance provision referred to, which 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

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 in which it is based.''

The complete program descriptions submitted by the ADEM, JCDH, and

City of Huntsville and the Technical Support Documents (TSDs) for each

program are available for review of more detailed information. The TSDs

contain detailed analysis of the programs and describe the manner in

which the programs meet 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

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

``presumptive minimum.''

The ADEM and JCDH have adopted the ``presumptive minimum'' of $25

per ton (annually adjusted by the CPI), for each regulated pollutant

except carbon monoxide. Also, fees will be assessed on the first 4,000

tons per regulated pollutant per facility. The City of Huntsville has

also adopted the $25 per ton (annually adjusted by the CPI). In

addition to the emissions-based fees, the City of Huntsville will

collect permit application fees. Permit application fees from title V

sources, as described in Section 3.6 of the City of Huntsville's rules,

will be used to support the title V program.

The ADEM and JCDH have also collected early title V fees in 1992,

1993 and 1994, to develop and start the title V program. Facilities

under the ADEM and JCDH that paid these initial ramp-up fees will be

given credit on the amount owed during 1995-1999 until the total credit

allowed equals the sum of the amount paid in 1992, 1993, and 1994. The

ADEM and JCDH have demonstrated that the fees collected during 1995-

1999 minus the ramp-up fee credits are sufficient to cover the costs of

the program. The City of Huntsville has also demonstrated that the fees

collected will be sufficient to cover the cost of the program.

The ADEM, JCDH, and City of Huntsville submittals have included an

initial accounting and description of how required fee revenues are

used solely to cover the title V program. The EPA has determined that

their fee demonstrations are adequate and meet the requirements of 40

CFR 70.9.

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

a. Authority and/or Commitments for Section 112 Implementation

The ADEM, JCDH, and City of Huntsville have demonstrated in their

title V program submittals broad legal authority to incorporate into

permits and enforce all applicable requirements; however, they have

also indicated that additional regulatory authority may be necessary to

carry out specific section 112 activities. They have therefore

supplemented their broad legal authority with a commitment to implement

any section 112 regulations promulgated by EPA that are Federally

mandated by the Clean Air Act Amendments of 1990. The EPA has

determined that this commitment, in conjunction with the State/Local

broad statutory authority, adequately assures compliance with all

section 112 requirements. The EPA regards this commitment as an

acknowledgment by the ADEM, JCDH, and City of Huntsville of their

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.

The EPA interprets the above legal authority and commitment to mean

that the ADEM, JCDH, and City of Huntsville are able to carry out all

section 112 activities. For further rationale on this interpretation,

please refer to the Technical Support Documents accompanying this

proposed interim approval.

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

The EPA issued an interpretive notice (60 FR 8333) on February 14,

1995, which outlines a revised interpretation of section 112(g)

applicability. The notice postpones the effective date of section

112(g) until after EPA has promulgated a Federal 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 or not to delay the effective date of section

112(g) 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 EPA provides for such an additional

postponement of section 112(g), the ADEM, JCDH, and City of Huntsville

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 State regulations implementing the rule.

The EPA is aware that the ADEM, JCDH, and City of Huntsville lack a

program designed specifically to implement section 112(g). However, the

ADEM, JCDH, and City of Huntsville do have preconstruction review

programs within their permit rules that can serve as adequate

implementation vehicles during the transition period. These programs

would allow the ADEM, JCDH, and City of Huntsville to select control

measures that would meet the maximum available control technology

(MACT) standards, as defined in section 112, and incorporate these

measures into a Federally enforceable preconstruction permit. The EPA

proposes to approve the use of the ADEM, JCDH, and City of Huntsville

preconstruction review programs, under the authority of title V and

part 70, for the purpose of implementing section 112(g) to the extent

necessary during the transition period between section 112(g)

promulgation and adoption of State/

[[Page 47527]]

Local rules implementing EPA's section 112(g) regulations. These

programs are found in Chapter 335-3-14 of the ADEM Regulations, Chapter

2 of the JCDH Regulations, and Chapter 3.5 of the City of Huntsville

Regulations. Although section 112(l) provides authority for approval of

State air regulations that specifically implement section 112(g), the

direct linkage between the implementation of section 112(g) and title V

provide for this limited approval by way of the preconstruction review

programs already in place.

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 State

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 State 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 General Provisions Subpart A and standards as

promulgated by EPA as they apply to part 70 sources. Section 112(l)(5)

and part 70 require that the State's program contain adequate

authorities, adequate resources for implementation, and an expeditious

compliance schedule. Therefore, EPA is also proposing to grant approval

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

receiving delegation of future section 112 standards and programs that

are unchanged from the Federal standards as promulgated, and to

delegate existing standards under 40 CFR parts 61 and 63 for part 70

and non-part 70 sources.1 The ADEM, JCDH, and City of Huntsville

have informed EPA that they intend to accept delegation of section 112

standards and infrastructure programs through adoption by reference.

The details regarding the use of these delegation mechanisms are set

forth in a letter dated June 8, 1995, submitted by the ADEM as a title

V program addendum.

\1\ The radionuclide National Emission Standards for Hazardous

Air Pollutants (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 ADEM, JCDH, and City of

Huntsville in the development of their 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 ADEM has committed to implement any Acid Rain regulations,

following promulgation by EPA of regulations implementing sections 407

and 410 of the Clean Air Act, that are Federally mandated by the Clean

Air Act Amendments of 1990 through title IV. The ADEM has proposed

revisions to the ADEM Administrative Code that will incorporate 40 CFR

Part 72 and Appendices by reference. The State has committed to

finalize its Acid Rain rules by November 15, 1995. The JCDH and City of

Huntsville have committed to adopt Local Acid Rain regulations within

60 days after the ADEM adopts the State rules.

B. Proposed Actions

The EPA is proposing to grant source category-limited interim

approval for the ADEM and JCDH operating permits programs, and interim

approval for the City of Huntsville program. If promulgated, the State

and Local agencies must make the following changes to their programs to

receive full approval:

1. The State statute must be revised to provide adequate criminal

authority as required by 40 CFR 70.11(a)(3)(ii)-(iii), including

criminal fines recoverable in a maximum amount of not less than $10,000

per day per violation.

2. The ADEM, JCDH, and City of Huntsville must delete ADEM

Regulation 335-3-16-.04(9)(b), JCDH Regulation 18.4.9(b) and City of

Huntsville Regulation 3.9.4(b), which state: ``Certification for

completeness shall not be required for initial applications that will

not be processed in the first year the regulations in this chapter are

effective.'' Since applications will be received from all sources by

the end of the first year following program approval, and these

applications will meet at least minimal requirements for a completeness

determination, this regulation is not consistent with 40 CFR Part 70.

3. The ADEM, JCDH, and City of Huntsville must revise their

regulations regarding insignificant activities such that (1) emissions

thresholds for individual activities or units that are exempted will

not exceed five tons per year for criteria pollutants, and the lesser

of 1,000 pounds per year or section 112(g) de minimis levels for HAPs,

(2) their list of insignificant activities is made available for EPA

and public review and comment each time the list is revised, and (3)

emissions units with applicable requirements will not be exempted from

title V permitting requirements or major source applicability

determinations, even if listed on an approved list of insignificant

activities.

4. The ADEM, JCDH, and City of Huntsville programs must be revised

to provide for operational flexibility in accordance with 40 CFR

70.4(b)(12)(iii), 70.5(c)(7), and 70.6(a)(10). These rules allow the

agencies, if requested by permit applicants, to issue permits that

contain terms and conditions allowing for the trading of emissions

increases and decreases in permitted facilities.

5. ADEM Regulation 335-3-16-.04(8)(b)(3), JCDH Regulation

18.4.8(c)(3), and City of Huntsville Regulation 3.9.3(c)(3) state that

permit applications shall include ``emission rates of all pollutants in

tons per year and in such terms as are necessary to establish

compliance consistent with the applicable standard reference test

method, or alternative method approved by the Department's Director.''

The Regulations must be revised to delete the Department Director's

discretion in approving alternatives to standard reference test methods

used in demonstrating compliance with title V permit terms.

6. The ADEM, JCDH, and City of Huntsville rules define significant

modifications as modifications under NSPS or NESHAP. In accordance with

40 CFR 70.7(e)(4)(i), this definition must be modified to include at

least every significant change in existing monitoring terms or

conditions and every relaxation of reporting or recordkeeping terms or

conditions as a significant modification.

7. For full approval, ADEM Regulation 335-3-16-.13(1)(a)7 (JCDH

Regulation 18.13.1(a)(7) and City of Huntsville Regulation

3.9.11(a)(1)(vii)) must be revised to specifically list the types of

changes that the State proposes to be eligible for processing as

administrative amendments, thus obtaining the Administrator's approval

of such changes as part of the State's part 70 program. Also, ADEM

Regulation 335-3-16-.13(1)(a)6 must be revised to include the EPA and

affected states review provisions required by 40 CFR 70.7(d)(1)(v).

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

period of up to two years. During the interim

[[Page 47528]]

approval period, the State 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 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. The ADEM and JCDH,

which have requested source category-limited interim approvals as

discussed below, will have a 5-year time period in which to process

initial permit applications.

The ADEM and JCDH have requested source category-limited (SCL)

interim approval of their part 70 operating permits programs. Although

the ADEM and JCDH would be required to issue permits within three years

to all sources subject to the interim approval, some sources would not

be subject to the requirement to obtain a permit until full approval is

granted. Part 70 sources not addressed until full program approval is

granted are also subject to a 3-year time period for processing initial

permit applications. The 3-year period for these sources would begin on

the date that full approval of the State or Local program is granted.

Therefore, initial permitting of all part 70 sources would not be

completed until five years after interim approval is granted. The City

of Huntsville did not request SCL interim approval of their part 70

operating permits program, and will therefore complete initial

permitting within three years of interim approval.

The ADEM and JCDH provided the reasons for needing SCL interim

approval in supplemental materials submitted by the ADEM on March 18,

1994, and by the JCDH on July 10, 1995. The ADEM and JCDH have a

variety of large and complex sources such as chemical manufacturing

plants and pulp and paper facilities. As a result, EPA believes the

ADEM and JCDH will be unable to issue permits to all part 70 sources

within three years and that SCL interim approval is warranted for their

title V programs. For further discussion on EPA's determination, see

the Technical Support Documents accompanying this approval.

In published guidance, EPA has acknowledged that SCL interim

programs that apply to at least 60 percent of all part 70 sources and

that include sources responsible for at least 80 percent of the

aggregate emissions from all part 70 sources substantially meet the

emissions coverage requirements of part 70. The ADEM program submittal

includes a schedule for permitting 60 percent of all part 70 sources

within three years of interim program approval. The ADEM has also

committed to permitting part 70 sources that are responsible for a

substantial percentage of the State's aggregate emissions in three

years. In addition, the ADEM has committed to act on all initial permit

applications by November 15, 2000. The EPA believes that the ADEM

program has been skillfully designed to utilize available resources in

an efficient manner and to result in effective permits that are

Federally enforceable. The EPA is confident that the ADEM will address

a substantial number of sources in the first three years so as to

represent a significant portion of the program and, therefore, fully

meets the intent of part 70 and other program guidance. The JCDH

program will address 60 percent of their part 70 sources during the

first three years following SCL interim approval and has also committed

to permitting part 70 sources that are responsible for a substantial

percentage of the Local's aggregate emissions during these three years.

The scope of the ADEM, JCDH, and City of Huntsville part 70

programs for which EPA proposes interim approval in this notice would

apply to all part 70 sources (as defined in the approved program)

within the State, except any sources of air pollution 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).

As discussed above in section II.A.4.c., EPA also proposes to grant

approval under section 112(l)(5) and 40 CFR 63.91 to the ADEM, JCDH,

and City of Huntsville for receiving delegation of future section 112

standards and programs that are unchanged from Federal standards as

promulgated. In addition, EPA proposes to delegate existing standards

and programs under 40 CFR parts 61 and 63 for both 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 submittals and other information relied

upon for the proposed interim approval are contained in a docket

maintained at 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 13, 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.

[[Page 47529]]

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: September 5, 1995.

Patrick M. Tobin,

Acting Regional Administrator.

[FR Doc. 95-22723 Filed 9-12-95; 8:45 am]

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