Approval and Promulgation of Implementation Plans and Delegation of 112(l) Authority; State of Missouri

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MO-21-1-6443(a); FRL-5289-6]

Approval and Promulgation of Implementation Plans and Delegation

of 112(l) Authority; State of Missouri

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: Missouri submitted its Rule 10 CSR 10-6.065, entitled

``Operating Permits,'' for Federal approval. The rule would establish a

mechanism for creating federally enforceable limitations that would

reduce sources' potential to emit such that sources could avoid major

source permitting requirements. This action approves this rule as

satisfying the criteria set forth in the Federal Register of June 28,

1989, for EPA approval of federally enforceable state operating permit

programs (FESOP). In addition, this action addresses Missouri's program

covering both criteria pollutants (regulated under section 110 of the

Clean Air Act (CAA)) and hazardous air pollutants (HAP) (regulated

under section 112).

DATES: This final rule is effective November 24, 1995, unless by

October 25, 1995 adverse or critical comments are received.

ADDRESSES: Written comments should be addressed to: Joshua A. Tapp, Air

Planning and Development Section, United States Environmental

Protection Agency, 726 Minnesota Avenue, Kansas City, Kansas 66101.

Copies of the State Implementation Plan (SIP) revision request and

EPA's analysis are available for public inspection during normal

business hours at the following address: United States Environmental

Protection Agency, Region VII, Air and Toxics Division, 726 Minnesota

Avenue, Kansas City Kansas 66101.

FOR FURTHER INFORMATION CONTACT: Joshua A. Tapp, Air Planning and

Development Section, United States Environmental Protection Agency,

Region VII, Kansas City, Kansas 66101 ((913) 551-7606).

SUPPLEMENTARY INFORMATION:

I. Review of State Submittal

For many years, Missouri has been issuing permits for major new

sources and for major modifications of existing sources. Throughout

this time, Missouri has also been issuing permits establishing

limitations on the potential emissions from new sources so as to avoid

major source permitting requirements. This latter type of permitting

has been the subject of various guidance from EPA, most notably the

memorandum entitled ``Guidance on Limiting Potential to Emit in New

Source Permitting'' dated June 13, 1989.

The operating permit provisions in title V of the Clean Air Act

Amendments of 1990 have created interest in mechanisms for limiting

sources' potential-to-emit, thereby allowing the sources to avoid being

defined as ``major'' with respect to title V operating permit programs.

A key mechanism for such limitations is the use of FESOPs. EPA issued

guidance on FESOPs in the Federal Register of June 28, 1989 (54 FR

27274). On April 6, 1994, Missouri submitted its newly adopted rule 10

CSR 10-6.065 to provide for FESOPs in Missouri. This rule would

supplement the preexisting mechanism for establishing federally

enforceable limitations on potential-to-emit (i.e., new source

permits). This document evaluates whether Missouri has satisfied the

requirements for this type of federally enforceable limitation on

potential-to-emit.

As specified in the Federal Register of June 28, 1989, the first

provision necessary for an FESOP program is that the state must have

approved operating permit regulations. Rule 10 CSR 10-6.065 sections 1,

2, 3, 4(C)-(P), 5, and 7 serve as the foundation for the FESOP rule and

the rule defines the ``intermediate'' permitting program. EPA approval

of the program will satisfy the first provision for Federal

enforceability.

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The second provision is that sources have a legal obligation to

comply with permit terms, and that EPA may deem as ``not federally

enforceable'' those permits which it finds fail to satisfy applicable

requirements. Rule 10 CSR 10-6.065 requires sources to obtain permits

to operate, authorizes Missouri to establish terms and conditions in

these permits ``to ensure compliance with applicable requirements,''

and authorizes the state to suspend or revoke permits if the source

violates the terms or conditions. In addition, Missouri's definition of

``federally enforceable'' states that an operating permit is federally

enforceable only if it establishes terms and conditions which require

adherence to its requirements (10 CSR 10-6.020(2)F(2)). Thus, this rule

imposes a legal obligation on sources to comply with permit terms.

The third requirement for FESOPs is that the program require all

limits to be at least as stringent as other applicable federally

enforceable provisions. Rule 10 CSR 10-6.065(5)(C)1 provides that terms

and conditions in permits must ``be at least as stringent as any other

applicable limitations and requirements contained in the implementation

plan or enforceable under the implementation plan.'' These rules

contain no provisions authorizing terms and conditions any less

stringent than the applicable requirements.

The fourth requirement is that the permit provisions must be

permanent, quantifiable, and otherwise enforceable as a practical

matter. Permit ``permanence'' does not mean never providing for a

modification, reissuance, or revocation, for these elements are

fundamental in all air permit programs. Permanence instead is

considered in terms of provisions having continuing mandates, i.e.,

that EPA has assurance that the provisions are in effect through the

life of the permit. In this case, the limitations on potential-to-emit

will generally be sought by sources so as to be redefined from

``major'' to ``minor'' for permitting purposes. Sources that obtain

such limitations must keep these limitations in effect, so as never to

be a ``major'' source violating the requirement for a ``major'' source

permit. The requirement for permit provisions to be quantifiable and

practically enforceable must be met on a permit-by-permit basis.

Missouri's rules do provide in section 10 CSR 10-6.065(5)(C)2 for the

issuance of permanent, quantifiable, and enforceable permits. Thus,

Missouri's rules provide for legally enforceable permits that EPA may

evaluate for practical enforceability.

The fifth requirement is that the permits must be subject to public

notice and review. Rules 10 CSR 10-6.065(5)(C)3 and 10 CSR 10-6.065(7)

provide that permits intended to establish federally enforceable

limitations on potential-to-emit may not be issued without first

providing opportunity for public comment.

Missouri has requested that EPA authorize federally enforceable

limitations on potential-to-emit for both pollutants regulated under

section 110 of the Act (``criteria pollutants'') and pollutants

regulated under section 112 (HAPs). As discussed above, the June 28,

1989, Federal Register document provided five specific criteria for

approval of state operating permit programs for the purpose of

establishing federally enforceable limits on a source's potential-to-

emit. This 1989 document addressed only SIP programs to control

criteria pollutants. Federally enforceable limits on criteria

pollutants (especially volatile organic compounds (VOC) and particulate

matter) may have the incidental effect of limiting certain HAPs listed

pursuant to section 112(b). This situation would occur when a pollutant

classified as an HAP is also classified as a criteria pollutant (e.g.,

benzene). 1 As a legal matter, no additional program approval by

EPA is required in order for these criteria pollutant limits to be

recognized for this purpose.

\1\ EPA intends to issue guidance addressing the technical

aspects of how these criteria pollutant limits may be recognized for

purposes of limiting a source's potential-to-emit of HAPs to below

section 112 major source levels.

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EPA has determined that the five approval criteria for approving

FESOP programs into the SIP, as specified in the June 28, 1989, Federal

Register document, are also appropriate for evaluating and approving

the programs under section 112(l). Hence, the five criteria discussed

above are applicable to FESOP approvals under section 112(l) as well as

under section 110.

In addition to meeting the criteria in the June 28, 1989, document,

an FESOP program for HAPs must meet the statutory criteria for approval

under section 112(l)(5). This section allows EPA to approve a program

only if it: (1) Contains adequate authority to ensure compliance with

any section 112 standards or requirements; (2) provides for adequate

resources; and (3) provides for an expeditious schedule for ensuring

compliance with section 112 requirements.

EPA plans to codify the approval criteria for programs limiting

potential-to-emit HAPs in subpart E of part 63, the regulations

promulgated to implement section 112(l) of the Act. EPA currently

anticipates that these criteria, as they apply to FESOP programs, will

mirror those set forth in the June 28, 1989, document, with the

addition that the state's authority must extend to HAPs instead of, or

in addition to, VOCs and particulate matter. EPA currently anticipates

that FESOP programs that are approved pursuant to section 112(l) prior

to the subpart E revisions will have had to meet these criteria and,

hence, will not be subject to any further approval action.

EPA believes it has authority under section 112(l) to approve

programs to limit potential-to-emit HAPs directly under section 112(l)

prior to this revision to subpart E. Section 112(l)(5) requires EPA to

disapprove programs that are inconsistent with guidance required to be

issued under section 112(l)(2). This might be read to suggest that the

``guidance'' referred to in section 112(l)(2) was intended to be a

binding rule. Even under this interpretation, EPA does not believe that

section 112(l) requires this rulemaking to be comprehensive. That is,

it need not address all instances of approval under section 112(l). EPA

has already issued regulations under section 112(l) that would satisfy

this requirement. Given the severe timing problems posed by impending

deadlines under section 112 and title V, EPA believes it is reasonable

to read section 112(l) to allow for approval of programs to limit

potential-to-emit prior to issuance of a rule specifically addressing

this issue.

Missouri's satisfaction of the criteria published in the Federal

Register of June 28, 1989, has been discussed above. In addition,

Missouri's FESOP program meets the statutory criteria for approval

under section 112(l)(5). EPA believes that Missouri has adequate

authority to ensure compliance with section 112 requirements since the

third criteria of the June 28, 1989, document is met-that is, since the

program does not provide for waiving any section 112 requirement.

Nonmajor sources would still be required to meet applicable section 112

requirements.

Regarding adequate resources, Missouri has included in its request

for approval under section 112(l) a commitment to provide adequate

resources to implement and enforce the program, which will be obtained

from fees collected under title V. EPA believes that this mechanism

will be sufficient to provide for adequate resources to implement this

program, and will monitor the state's implementation of the program to

ensure that adequate resources continue to be available.

[[Page 49342]]

Missouri's FESOP program also meets the requirement for an

expeditious schedule for ensuring compliance. A source seeking a

voluntary limit on potential-to-emit is probably doing so to avoid a

Federal requirement applicable on a particular date. Nothing in this

program would allow a source to avoid or delay compliance with the

Federal requirement if it fails to obtain the appropriate federally

enforceable limit by the relevant deadline.

II. Rulemaking Action

EPA finds that the criteria for Missouri to be able to issue FESOPs

are met, and is today approving Rule 10 CSR 10-6.065 sections 1, 2, 3,

4(C)-(P), 5, and 7. It is important to note that Missouri's rule 10 CSR

10-6.065 contains the requirements for a part 70 permit program, an

intermediate permit program which EPA is approving in this action, and

a basic permit program which applies to minor sources. To some extent,

the requirements for these programs overlap within the rule. EPA wants

to make clear that it is only approving the language and requirements

of this rule as they apply to Missouri's intermediate operating permit

program.

EPA is publishing this action without prior proposal because the

Agency views this as a noncontroversial amendment and anticipates no

adverse comments. However, in a separate document in the Federal

Register publication, EPA is proposing to approve the SIP revision

should adverse or critical comments be filed.

If EPA receives such comments, this action will be withdrawn before

the effective date by publishing a subsequent document that will

withdraw the final action. All public comments received will then be

addressed in a subsequent final rule based on this action serving as a

proposed rule. EPA will not institute a second comment period on this

action. Any parties interested in commenting on this action should do

so at this time.

Under sections 202, 203, and 205 of the Unfunded Mandates Reform

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

1995, EPA must undertake various actions in association with proposed

or final rules that include a Federal mandate that may result in

estimated costs of $100 million or more to the private sector, or to

state, local, or tribal governments in the aggregate.

Through submission of this SIP revision, the state has elected to

adopt the program provided for under section 110 of the CAA. These

rules may bind state and local governments to perform certain actions

and also require the private sector to perform certain duties. To the

extent that the rules being finalized for approval by this action will

impose new requirements, sources are already subject to these

regulations under state law. Accordingly, no additional costs to state

or local governments, or to the private sector, result from this final

action. EPA has also determined that this final action does not include

a mandate that may result in estimated costs of $100 million or more to

state or local governments in the aggregate or to the private sector.

Nothing in this action should be construed as permitting, allowing,

or establishing a precedent for any future request for revision to any

SIP. EPA shall consider each request for revision to the SIP in light

of specific technical, economic, and environmental factors, and in

relation to relevant statutory and regulatory requirements.

The Office of Management and Budget has exempted these regulatory

actions from review under Executive Order 12866.

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities (5 U.S.C. 603 and 604).

Alternatively, EPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000.

SIP approvals under section 110 and subchapter I, part D of the CAA

do not create any new requirements, but simply approve requirements

that the state is already imposing. Therefore, because the Federal SIP

approval does not impose any new requirements, I certify that it does

not have a significant impact on any small entities affected. Moreover,

due to the nature of the Federal-state relationship under the CAA,

preparation of a regulatory flexibility analysis would constitute

Federal inquiry into the economic reasonableness of state action. The

CAA forbids EPA to base its actions concerning SIPs on such grounds

(Union Electric Co. v. United States EPA, 427 U.S. 246, 256-66 (S.Ct.

1976); 42 U.S.C. 7410(a)(2)).

Under section 307(b)(1) of the CAA, petitions for judicial review

of this action must be filed in the United States Court of Appeals for

the appropriate circuit by November 24, 1995. Filing a petition for

reconsideration by the Administrator of this final rule does not affect

the finality of this rule for the purposes of judicial review, nor does

it extend the time within which a petition for judicial review may be

filed, and shall not postpone the effectiveness of such rule or action.

This action may not be challenged later in proceedings to enforce

its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

Environmental Protection, Air pollution control, Hydrocarbons,

Incorporation by reference, Lead, Nitrogen dioxide, Ozone, Particulate

matter, Volatile organic compounds.

Dated: August 9, 1995.

Dennis Grams,

Regional Administrator.

Part 52, chapter I, title 40 of the Code of Federal Regulations is

amended as follows:

PART 52--[AMENDED]

1. The authority citation for part 52 continues to read as follows:

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

Subpart AA--Missouri

2. Section 52.1320 is amended by adding paragraph (c)(88) to read

as follows:

Sec. 52.1320 Identification of plan.

* * * * *

(c)* * *

(88) This revision submitted by the Missouri Department of Natural

Resources on March 31, 1994, relates to intermediate sources, and the

EPA is not approving the basic operating permit program. This revision

establishes a mechanism for creating federally enforceable limitations.

Emission limitations and related provisions which are established in

Missouri operating permits as federally enforceable conditions shall be

enforceable by EPA. EPA reserves the right to deem permit conditions

not federally enforceable. Such a determination will be made according

to appropriate procedures and be based upon the permit, permit approval

procedures, or permit requirements which do not conform with the

operating permit program requirements or the requirements of EPA's

underlying regulations.

(i) Incorporation by reference.

(A) 10 C.S.R. 10-6.065 (sections 1, 2, 3, 4(C)-(P), 5, and 7)

Operating Permits, effective May 9, 1994.

(ii) Additional material.

(A) Letter from Missouri to EPA Region VII dated November 7, 1994,

regarding how Missouri intends to

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satisfy the requirements set forth in the Clean Air Act Amendments at

sections 112(l)(5)(A), (B), and (C).

(B) Two letters from Missouri to EPA Region VII dated October 3,

1994, and February 10, 1995, supplementing the November 7, 1994, letter

and clarifying that Missouri does have adequate authority to limit

potential-to-emit of hazardous air pollutants through the state

operating permit program.

* * * * *

3. Section 52.1323 is amended by adding paragraph (i) to read as

follows:

Sec. 52.1323 Approval status.

* * * * *

(i) Emission limitations and related provisions which are

established in Missouri's operation permits as federally enforceable

conditions shall be enforceable by EPA. EPA reserves the right to deem

permit conditions not federally enforceable. Such a determination will

be made according to appropriate procedures, and be based upon the

permit, permit approval procedures, or permit requirements which do not

conform with the operating permit program requirements or the

requirements of EPA's underlying regulations.

[FR Doc. 95-23719 Filed 9-22-95; 8:45 am]

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