Clean Air Act Proposed Interim Approval of Operating Permits Program; Maryland

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5321-9]

Clean Air Act Proposed Interim Approval of Operating Permits

Program; Maryland

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

-----------------------------------------------------------------------

SUMMARY: The EPA proposes interim approval of the operating permits

program submitted by Maryland. This program was submitted by Maryland

for the purpose of complying with federal requirements which mandated

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

November 29, 1995.

ADDRESSES: Comments should be addressed to Enid Gerena, (3AT23), Air,

Radiation and Toxics Division, U.S. Environmental Protection Agency,

Region III, 841 Chestnut Building, Philadelphia, PA 19107.

Copies of Maryland'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: Air,

Radiation, and

[[Page 55232]]

Toxics Division, U.S. Environmental Protection Agency, Region III, 841

Chestnut Building, Philadelphia, Pennsylvania 19107.

FOR FURTHER INFORMATION CONTACT: Enid A. Gerena (3AT23), Air,

Radiation, and Toxics Division, U.S. Environmental Protection Agency,

Region III, 841 Chestnut Building, Philadelphia, PA 19107, (215) 597-

8239.

SUPPLEMENTARY INFORMATION:

I. Background

A. Introduction

As required under Title V of the Clean Air Act (CAA) as amended

(1990), EPA has promulgated rules which 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 and require states to develop, and submit to

EPA, programs for issuing these operating permits to all major

stationary sources and to certain other sources. Due to pending

litigation over several aspects of the Part 70 rule which was

promulgated on July 21, 1992, Part 70 is in the process of being

revised. When the final revisions to Part 70 are promulgated, the

requirements of the revised Part 70 will define EPA's criteria for 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 program

submittals. Until the date which the revisions to Part 70 are

promulgated, the currently effective July 21, 1992 version of Part 70

shall be used as the basis for EPA review.

B. Federal Oversight and Sanctions

The CAA 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 1 year after receiving the submittal. EPA's program

review occurs pursuant to section 502 of the CAA and the July 21, 1992

version of Part 70, which together outline the currently applicable

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 2 years. If EPA has not

fully approved a program by 2 years after the November 15, 1993 date,

or by the end of an interim program, EPA must establish and implement a

federal operating permits program.

Following final interim approval, if the State of Maryland fails to

submit a complete corrective program for full approval by 6 months

before the interim approval expires, EPA would start an 18-month clock

for mandatory sanctions. If Maryland then failed to submit a complete

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 CAA. Such sanction would remain in

effect until EPA determined that Maryland had corrected the deficiency

by submitting a complete corrective program. Moreover, if the

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

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

18-month period until the Administrator determined that Maryland had

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

the first sanction, Maryland still had not submitted a corrective

program that EPA found complete, a second sanction would be required.

If, following final interim approval, EPA disapproved Maryland'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 Maryland had submitted a

revised program and EPA had determined that this program corrected the

deficiencies that prompted the disapproval. Moreover, if the

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

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

18-month period until the Administrator determined that Maryland had

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

the first sanction, Maryland had not submitted a revised program that

EPA had determined corrected the deficiencies that prompted the

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 Maryland 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 a Maryland program by the expiration of an

interim approval period, EPA must promulgate, administer and enforce a

federal operating permits program for Maryland upon the date the

interim approval period expires.

C. State of Maryland's Submittal

On May 9, 1995, Maryland submitted an operating permits program for

review by EPA. The submittal was supplemented by additional materials

on June 9, 1995, and was found to be administratively complete pursuant

to 40 CFR 70.4(e)(1). The submittal includes the following components:

transmittal letter; description of Maryland's Title V operating permits

program; state regulations; Attorney General's legal opinion; workload

analysis, permit fee demonstration; permitting program documentation,

and additional information (i.e., transition plan, data management,

compliance tracking and enforcement description).

II. Summary and Analysis of Maryland's Submittal

The analysis contained in this notice focuses on the major portions

of Maryland's operating permits program submittal: regulations and

program implementation, fees, support materials, and provisions

implementing the requirements of Titles III and IV of the CAA.

Specifically, this notice addresses the deficiencies in Maryland's

submittal which will need to be corrected to fully meet the

requirements of the July 21, 1992 version of Part 70. These

deficiencies as well as other issues related to Maryland's operating

permits program are discussed in detail in the Technical Support

Document (TSD). The full program submittal and the TSD are available

for review as part of the public docket. The docket may be viewed

during regular business hours at the EPA Region III office listed in

the ADDRESSES section of this notice.

A. Regulations and Program Implementation

Maryland's operating permits program is primarily defined by

regulations adopted as Code of Maryland Regulations (COMAR), Title 26,

Subtitle 11. The specific regulations being adopted to implement the

Part 70 requirements will appear at COMAR Sec. 26.11.02 (Permits,

Approvals, and Registration) and COMAR Sec. 26.11.03 (Permits,

Approvals, and Registration--Part 70 Permits). Provisions for

enforcement authority are located in COMAR Sec. 26.11.02.05. Maryland

submitted a list identifying ``Title V'' and ``Non-Title V'' provisions

of its regulations. This list is provided in the TSD. In today's

proposal, EPA is taking action only on the Title V portions of

Maryland's submittal.

[[Page 55233]]

During the review of Maryland's regulations, EPA identified several

instances of vague language, misreferences, typographical errors, and

errors of omission in the regulatory language. The provisions in which

these errors occur are identified in the TSD and must be interpreted as

if written correctly to fully meet the requirements of Part 70. The

following analysis of Maryland's operating permit regulations

corresponds directly with the format and structure of Part 70.

Section 70.4 State Program Submittals and Transition

Maryland's regulations substantially meet the requirements of 40

CFR 70.4 for the State program submittal. For consistency with section

502(b)(6) of the Clean Air Act and 40 CFR 70.4(b)(3)(x), Maryland must

address the following issue on standing for judicial review and the

following changes must be made in order to fully meet the requirements

of 40 CFR 70.4:

1. The Attorney General of Maryland, in his opinion dated June 9,

1995, states that ``the laws of Maryland provide adequate authority to

carry out the program submitted on May 9, 1995 by the Maryland

Department of the Environment (the Department) to the U.S Environmental

Protection Agency for approval to administer and enforce the operating

permit program under Title V of the CAA and 40 CFR Part 70 (the Part 70

program).'' Section 502(b)(6) of the CAA and 40 CFR 70.4(b)(3)(x)

require that the program provide standing for judicial review of a

permit action to THE PERMIT APPLICANT, any person who participated in

the public comment process and any other person who could obtain

judicial review of that action under applicable law. EPA interprets

section 502(b)(6) of the CAA and part 70 as requiring that approvable

state title V permits programs must provide judicial review to any

party who participated in the public comment process and who meets the

threshold requirements of Article III of the U.S. Constitution for

standing in federal courts.

The Attorney General cites the Maryland Environmental Standing Act

(MESA), Md. Nat. Res. Code Ann. Secs. 1-501 to 1-508 (1990), as the

primary avenue for third parties to obtain judicial review of the

Department's issuance of a Part 70 permit. The Attorney General

interprets MESA to provide standing to challenge permit issuance in

actions for mandamus or equitable relief (including declaratory relief)

to several categories of persons. Those categories are: (1) The state,

(2) any political subdivision of the state, and (3) any other person,

regardless of whether that person possesses a special interest

different from that possessed generally by the residents of Maryland or

whether substantial personal or property damage to that person is

threatened. The Attorney General recognizes that MESA does not provide

standing for a direct judicial review of permit actions under

Maryland's Administrative Procedure Act (APA), Md. State Gov't Code

Ann. Sec. 10-201 (1990). Nonetheless, it appears that review of

essentially equivalent scope as direct judicial review is available

under MESA. The Attorney General notes that the Maryland Supreme Court

has stated that an administrative proceeding such as permit issuance or

denial, even if not subject to direct review under the APA, would be

subject to judicial review of essentially the same scope in an action

for mandamus or equitable relief (including certiorari, injunction, or

declaratory judgment).

For purposes of MESA, the term ``person'' includes any resident of

Maryland, any Maryland corporation, and any partnership, organization,

association or legal entity doing business in the state. Parties not

falling within this definition of ``person'' (for example, individuals

living in an adjacent state but near a Maryland source, or an

organization not doing business in Maryland) can not take advantage of

the standing provisions of MESA. Instead, those parties are required to

establish standing for judicial review under the Maryland common law of

standing. Under Maryland common law, in order to establish standing, a

party must demonstrate it has a ``specific interest or property right''

such that the party will suffer harm that is different in kind from

that suffered by the general public. There are no reported cases in

Maryland that would preclude a non-economic interest (such as a

recreational, conservational or aesthetic interest) from constituting

the type of specific interest needed for standing. If a Maryland

judicial decision having precedential effect is issued in the future

limiting the special interest required for standing to economic

interests, then the Maryland standing requirements would become more

stringent than Article III standing requirements. In that event, EPA

will take appropriate action under 40 CFR 70.11(c).

With respect to organizations not doing business in Maryland, the

Maryland standing requirements are somewhat less favorable than the

standing requirements of Article III of the U.S. Constitution. The

federal courts interpret Article III to provide standing for

organizations in actions brought to protect the interests of its

members, provided certain conditions are met. See Chesapeake Bay

Foundation v. Bethlehem Steel Corp., 608 F.Supp. 440 (D. Md. 1985).

Under Maryland common law of standing, an organization must have an

interest of its own, separate and distinct from that of its individual

members, in order to establish standing. Medical Waste Associates, Inc.

v. Maryland Waste Coalition, 327 Md. 596 (1992). However, the Maryland

Attorney General notes that if at least one plaintiff in an action for

review of a permit establishes standing, the Maryland courts will not

ordinarily inquire as to whether other plaintiffs have standing.

Therefore, an organization doing business outside of Maryland may be

able to participate in a permit challenge on behalf of its individual

members if other parties having the requisite standing also join as

plaintiffs in the action. (Of course, organizations doing business in

Maryland can establish standing under MESA, as discussed above.)

MESA must be amended to accord non-state residents and

organizations not doing business in Maryland the same standing to

challenge Part 70 permit decisions as other ``persons'' as defined in

MESA, or, in the alternative, other appropriate legislative action must

be taken to ensure that standing requirements for such organizations

are not more restrictive than the minimum requirements of Article III

of the U.S. Constitution as they apply to federal courts. A

straightforward approach Maryland could take to resolving this issue

would be to amend its state APA to directly provide for the opportunity

for judicial review of permit actions in state court, consistent with

CAA section 502(b)(6) and 40 CFR 70.4(b)(3)(x); this would avoid the

risk of any future Maryland judicial decision interpreting MESA or

Maryland's common law of standing potentially compromising Maryland's

Part 70 approval status.

Section 70.5 Permit Applications

Maryland's regulations substantially meet the requirements of 40

CFR 70.5 for permit applications. The following changes must be made in

order to fully meet the requirements of 40 CFR 70.5:

1. COMAR Sec. 26.11.03.04 lists 17 types of emission units and

activities that are exempt from being included in the Part 70 permit

application. 40 CFR 70.5(c) allows EPA to approve a list of

insignificant activities or emissions levels which need not be included

in permit applications; however, the State must identify such emissions

levels or

[[Page 55234]]

insignificant activities based on size, emission rate or production

rate. Maryland must make three changes to COMAR Sec. 26.11.03.04 in

order to meet the requirements of 40 CFR 70.5(c):

a. As part of the list of emission units and activities exempt from

the Part 70 permit application, COMAR Sec. 26.11.03.04 A(18) lists

``any other emission unit that is not subject to an applicable

requirement of the Clean Air Act.'' Part 70 does not allow such a broad

exemption of emission units from the permit application requirements.

40 CFR 70.5(c)(3)(i) requires that a permit application describe all

emissions of regulated air pollutants from any emissions unit, except

where such units are exempted as part of a list of insignificant

activities or emission levels. Insignificant activities or emissions

levels must be clearly identified and established based on a

justifiable limitation, such as a size or emissions threshold.

b. Maryland must revise COMAR Sec. 26.11.03.04 B to provide that a

permit applicant shall not omit information needed to determine the

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

with 40 CFR 70.5(c).

c. Maryland must revise COMAR Sec. 26.11.03.04 A(2) to clarify the

exemption for boilers used exclusively to operate steam engines for

farm and domestic use. This exemption must be modified to impose a

justifiable and objective emission limit, heat content limit, or size

limitation to restrict this exemption to insignificant activities.

Maryland must also provide enough information to identify the activity

and/or unit qualifying for an exemption.

Section 70.7 Permit Issuance, Renewal, Reopenings, and Revisions

Maryland's regulations substantially meet the requirements of 40

CFR 70.7 for permit issuance, renewal, reopenings, and revisions. The

following changes must be made in order to fully meet the requirements

of 40 CFR 70.7:

1. COMAR Sec. 26.11.03.21 A provides that general permits will be

issued after notice and opportunity for public comment and hearing as

required by the rule making provisions of the Administrative Procedure

Act (APA), State Government Article Sec. 10-101 et seq., Annotated Code

of Maryland, and Environmental Article Sec. 2-301, Annotated Code of

Maryland. While the APA and Sec. 2-301 and Sec. 2-303 of the

Environmental Article provide adequate public notice and comment

provisions, they do not provide all necessary permit issuance

procedures required by 40 CFR 70.7(h). COMAR Sec. 26.11.03.21 A also

states that any general permit shall comply with all requirements

applicable to other Part 70 permits.

It is not clear, however, whether this provision applies to the

issuance of general permits. Maryland's provisions for issuance of Part

70 permits (COMAR Secs. 26.11.03.07-.09) are adequate, but the

regulations do not specifically state whether they apply to general

permits. Specifically, Maryland must require that the procedures for

issuing general permits include notice and opportunity for

participation by affected states consistent with 40 CFR 70.7(h)(3) and

70.8 (COMAR Sec. 26.11.03.08) and a 45-day EPA review period,

consistent with 70.8(a) and (c) (COMAR Sec. 26.11.03.09). Further,

Maryland must keep a record of public commenters and issues raised

during the public participation process so that EPA may fulfill its

obligation under section 505(b)(2) of the Act to determine whether a

citizen petition may be granted (COMAR Sec. 26.11.03.07(G)). EPA

recommends that Maryland clarify that these provisions apply to the

issuance of general permits by citing in COMAR Sec. 26.11.03.21 A the

appropriate sections of Maryland's regulations.

2. The procedures for revising a general permit under COMAR

Secs. 26.11.03.21 J and L must be changed to meet the requirements of

40 CFR 70.7(e) regarding permit revision procedures. COMAR

Sec. 26.11.03.21 J allows the Department to revise or repeal a general

permit using the procedures that are appropriate to the particular

permit. COMAR Sec. 26.11.03.21 L states that the revision procedures

set forth in Maryland's regulations do not apply to a general permit,

except as provided in the general permit. These sections are

inconsistent with Part 70 because they give the Department discretion

to determine the appropriate procedures that should be followed to

revise a general permit. Under 40 CFR 70.7(e)(1), the permitting

authority is required to provide procedures for permit modifications

that provide a level of public participation and review by the

permitting authority, EPA and affected states that is at least equal to

that provided in Part 70. Therefore, if the Department proposes a

significant change in the general permit's terms and conditions, such

as a relaxation of reporting requirements or an increase in the

applicable emissions limit, the general permit would need to be revised

according to procedures for a significant permit modification,

including a 30 day public comment period, an opportunity for a public

hearing, and review by EPA and affected states. Those proposed

revisions to the general permit that meet the criteria for

administrative permit amendments or minor permit modifications could be

processed using procedures consistent with 40 CFR 70.7(d) and

Sec. 70.7(e)(2), respectively. It should be made clear that the general

permit cannot be modified for individual sources; rather, each source

that applies for and is granted approval to operate under the general

permit must adhere to the same permit terms and conditions. If the

Department determines that a revision to the general permit is

necessary, it must revise the permit using procedures consistent with

40 CFR 70.7, as described above.

3. Maryland's requirements for permit reopenings, including COMAR

Secs. 26.11.03.07 A(2), 26.11.03.08 A and 26.11.03.20 C (4), (5) and

(6), provide the State discretion to follow procedures other than the

procedures for permit issuance. Maryland's COMAR Sec. 26.11.03.20 C(4)

states that ``the procedures that the Department specifies to be

followed if a permit is reopened shall be based on the Department's

determination as to what type of change to the permitted source is

likely to result from reopening the permit, using Regulations

[26.11.03] .14-.17 [pertaining to permit revisions] of this chapter as

guidance.'' By contrast, 40 CFR 70.7(f)(2) requires that procedures to

reopen and issue a permit shall follow the same procedures as apply to

initial permit issuance. Maryland's provisions for permit reopening

procedures are inconsistent with Part 70. However, future revisions to

Part 70 may provide flexibility in the procedures that States must use

to reopen permits. On August 31, 1995, EPA proposed revisions to Part

70 that would streamline the procedures for revising Title V operating

permits. (See 60 FR 45530.)

4. COMAR Sec. 26.11.03.17 F provides that a permittee shall submit

an application for a significant permit modification not later than 12

months after commencing operation of the changed source unless the

change is prohibited by the Part 70 permit. This provision is

inconsistent with 40 CFR 70.7(e)(4), which does not allow a source to

make a significant permit modification prior to receiving a revised

permit from the permitting authority. A significant permit modification

is a change that does not qualify as an administrative permit amendment

or a minor permit modification. Significant modifications include

relaxations in monitoring, reporting, or recordkeeping. By allowing a

source to submit its permit application 12 months after making a

change, COMAR Sec. 26.11.03.17

[[Page 55235]]

F is less stringent than 40 CFR 70.7(e)(4) and allows a source even

more leniency in making a significant change than for making minor

permit modifications or administrative permit amendments. This is

clearly not the intent of the significant permit modification

provisions of 40 CFR 70.7(e)(4). Future revisions to Part 70, as

described above, may provide flexibility in the procedures that States

must use to process permit revisions.

5. COMAR Sec. 26.11.03.14 C allows the Department to approve

changes to compliance plans or schedules as part of an administrative

permit amendment or minor permit modification. This provision is less

stringent than 40 CFR 70.7 because the relaxation of a compliance plan

or schedule is a significant change that should be processed as a

significant permit modification. Future revisions to Part 70, as

described above, may provide flexibility in the procedures that States

must use to revise permits.

6. COMAR Sec. 26.11.03.15 B(7) contains the following sentence:

``Notwithstanding Sec. [26.11.03.15] B(1)-(6) [pertaining to

administrative permit amendments] of this regulation, for purposes of

the acid rain portion of a Part 70 permit is governed by regulations

promulgated under Title IV of the Clean Air Act.'' This sentence

apparently was written in error. EPA assumes that this sentence is

meant to reflect the provisions of 40 CFR 70.7(e), which states that a

permit modification (other than an administrative permit amendment) for

purposes of the acid rain portion of the permit shall be governed by

regulations promulgated under Title IV of the Clean Air Act. Maryland

must correct the wording of COMAR Sec. 26.11.03.15 B(7).

Section 70.8 Permit Review By EPA and Affected States

Maryland's regulations substantially meet the requirements of 40

CFR 70.8 for permit review by EPA and affected states. The following

changes must be made in order to fully meet the requirements of 40 CFR

70.8:

1. COMAR Sec. 26.11.03 appears to allow the Department to make

changes in a final permit after EPA has completed its review of the

permit. For example, COMAR Sec. 26.11.03.11 includes provisions for

implementing changes to a final permit subsequent to a contested case

hearing and the issuance of a proposed decision by an Administrative

Law Judge (ALJ). On the basis of past experience with other air quality

control programs, Maryland believes that it will be an extremely rare

occasion when an applicant seeks such a hearing. In the event that such

proceeding does occur, COMAR Sec. 26.11.03.11 affords EPA the

opportunity to participate in the hearing. In the event that EPA does

not participate, COMAR Sec. 26.11.03.11 affords EPA a thirty (30) day

opportunity to comment on the proposed decision of the ALJ prior to the

Department's issuance of a final decision in the matter. However, in

the event that the Department thereafter issues a final decision which

modifies or changes conditions in the final permit, federal and state

requirements (the Clean Air Act, 40 CFR 70.8 and COMAR

Sec. 26.11.03.09) should be read as requiring the Department to provide

EPA with an additional (45 day) period in which to review and comment

on the final permit. Maryland must revise its Attorney General's

Opinion to acknowledge that in the event the Department implements

changes to any final permit, EPA will have an additional (45 day)

period to review and comment on the final permit, as revised by the

Department.

B. Variances

Maryland Environmental Article sections 2-501, 606, 610(c), 611,

and 613 are cited by the Department as variance provisions which

authorize the Department to deviate from certain applicable

requirements within and outside the permitting process. EPA has no

authority to approve provisions of State law, such as the variance

provisions referred to in these sections, which are inconsistent with

the CAA. 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. EPA reserves the right to enforce the terms of the

Part 70 permit where the permitting authority purports to grant relief

from the duty to comply with a Part 70 permit in a manner inconsistent

with Part 70 procedures.

C. Permit Fee Demonstration

COMAR Sec. 26.11.02.19(A) states that owners or operators of Part

70 sources will be required to pay an annual fee consisting of a base

fee of two hundred dollars ($200) plus an emissions-based fee for each

ton of regulated emissions. Beginning in January 1, 1996, the fee rate

will be twenty-five dollars per ton ($25) of regulated emissions. On

January 1, 1997, this annual fee will be adjusted by the Consumer Price

Index (CPI). Fee revenues received from Part 70 facilities will be

placed in a segregated portion of the Department's Air and Radiation

Management Administration budget. Surplus funds from any prior year of

the program will be carried over to the following year to be used

solely for Part 70 permitting activity.

Only program-related fees from facilities subject to Part 70

applicability will be used to fund the program. Maryland's fee

calculation, based upon recent (September 1994) emissions inventory

data, shows that revenues will be able to cover the estimated costs of

the program. In chapter IV of the submittal entitled, ``Workload

Analysis and Fee Demonstration'', Maryland estimates revenues and costs

associated with the implementation of its operating permits program.

The Air and Radiation Management Administration proposes an accounting

method whereby Part 70 program activities performed by technical

personnel in the Air Quality Permits and Compliance Program will be

coded directly to specified Part 70 program cost accounts. In the

submittal, Maryland stated that in the event of a temporary shortfall

of revenues, the Department will have the option to prorate fees

collected from facilities with Phase I units (acid rain) so as to allow

fees from non-Phase I units at these sites to be used for Part 70

activities. According to 40 CFR 70.9(b)(3), the permitting authority is

allowed to calculate fees on any particular basis or in the same manner

for all Part 70 sources, or all regulated air pollutants, provided that

the state collects a total amount of fees sufficient to meet the

program. Maryland meets the requirements of 40 CFR 70.9(b)(3). However,

it will be necessary for the State to demonstrate how these revenues

will be prorated. EPA recommends that Maryland establish an account

tracking system that will distinguish between revenues and expenditures

attributable to Phase I from non-Phase I units. The estimates of

revenues from the authorized collection of emission-based fees reveal

that Maryland's program will have adequate funding to cover the direct

and indirect costs of implementing the permit program during each of

the first four years.

D. Provisions Implementing the Requirements of Title III Implementing

Title III Standards Through Title V Permits

Maryland's regulations provide general authority to administer and

enforce the requirements of the Clean Air Act regarding hazardous air

pollutants, and thus generally meet the requirements of 40 CFR 70.3

(a)-(b). The following issue must be addressed in order to fully meet

the requirements of 40 CFR 70.3 (a)-(b).

[[Page 55236]]

1. In its May 9, 1995 submittal, Maryland advised EPA that it was

not seeking full Part 70 program approval regarding hazardous air

pollutants, but was considering whether to request EPA approval of its

existing air toxics program (COMAR Sec. 26.11.15) under Subpart E of 40

CFR Part 63. As a result, the Attorney General did not review the

State's Part 70 program regarding current federal requirements for

hazardous air pollutants. Maryland must resolve the issue of how it

will address the CAA's section 112 applicable requirements and revise

its Attorney General's opinion to include a detailed review of the

State's Part 70 program regarding current federal requirements for

hazardous air pollutants.

Under Environment Article, Title 2, of the Annotated Code of

Maryland and COMAR Sec. 26.11.03.06 A(1), Maryland, in its Title V

program submittal, has demonstrated broad legal authority to

incorporate all applicable requirements into permits and to enforce its

permit requirements. In its May 9, 1995 submittal, Maryland indicated

that the Part 70 permits will be the mechanism to implement mandatory

Section 112 requirements and that other federally-enforceable

mechanisms may be used to carry out specific CAA section 112 activities

but only if approved by EPA. EPA regards this commitment as an

obligation to obtain further legal authority as needed to issue permits

that assure compliance with the CAA's section 112 applicable

requirements.

For a further discussion in support of this interpretation, please

refer to the TSD accompanying this rulemaking, which is located in the

public docket, and the April 13, 1993 guidance memorandum entitled

``Title V Program Approval Criteria for Section 112 Activities,''

signed by John Seitz, Director, Office of Air Quality Planning and

Standards, Office of Air and Radiation, USEPA.

Implementation of 112(g) Upon Program Approval

EPA is proposing to approve Maryland's operating permits program

for the purpose of implementing CAA section 112(g) during the

transition period between federal promulgation of a section 112(g) rule

and Maryland's adoption of section 112(g) implementing regulations.

Until recently, EPA had interpreted the CAA to require sources to

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

Title V program regardless of whether EPA had completed its section

112(g) rulemaking. EPA has since revised this interpretation of the CAA

as described in a February 14, 1995 Federal Register notice (see 60 FR

83333). The revised interpretation postpones the effective date of

section 112(g) until after EPA has promulgated a rule addressing that

provision. The rationale for the revised interpretation is set forth in

detail in the February 14, 1995 interpretive notice.

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

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

delayed beyond the date of promulgation of the federal rule to allow

states time to adopt rules implementing the federal rule, and that EPA

will provide for any such additional delay in the final section 112(g)

rulemaking. Unless and until EPA provides for such an additional

postponement of section 112(g), Maryland must be able to implement

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

federal section 112(g) rule and adoption of implementing Maryland

regulations.

EPA believes that, although Maryland currently lacks a program

designed specifically to implement section 112(g), Maryland's Title V

operating permits program will serve as an adequate implementation

vehicle during the transition period because the program will allow

Maryland to select control measures that would meet Maximum Achievable

Control Technology (MACT) on a case-by-case basis, as defined in

section 112, and incorporate these measures into federally enforceable

source-specific permits.

This proposed approval clarifies that Maryland's operating permits

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 Maryland of rules established to implement section

112(g). EPA is proposing to limit the duration of this approval to an

outer limit of 18 months following EPA's promulgation of the section

112(g) rule. Comment is solicited on whether 18 months is an

appropriate period taking into consideration the State's procedures for

adoption of regulations. However, since this proposed 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 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.

Although section 112(l) generally provides the authority for

approval of state air toxics programs, Title V and section 112(g)

provide authority for this limited approval because of the direct

linkage between implementation of section 112(g) and Title V.

If Maryland does not wish to implement section 112(g) through the

proposed mechanisms discussed above and can demonstrate that an

alternative means of implementing section 112(g) exists during the

transition period, EPA may, in the final action approving Maryland's

Part 70 program, approve such alternative.

Program for Straight Delegation of Section 112 Standards

As previously noted, Maryland has advised EPA that it currently is

not seeking full Part 70 program approval regarding hazardous air

pollutants, but is considering a request for approval of its existing

air toxics program (COMAR Sec. 26.11.15) under Subpart E of 40 CFR Part

63. However, prior to receiving EPA approval of its existing air toxics

program, Maryland must agree that the requirements specified in 40 CFR

70.4(b), encompass section 112(l)(5) requirements for a program for

delegation of unchanged section 112 standards. Section 112(l)(5)

requires state programs to contain adequate authorities and resources

for implementation, and an expeditious compliance schedule, which are

also requirements under Part 70. Prior to a decision by EPA regarding

approval of its existing air toxics program, EPA proposes to grant

approval under section 112(l)(5) and 40 CFR 63.91 of Maryland's program

for receiving delegation of section 112 standards that are unchanged

from the federal standards as promulgated. For EPA-promulgated rules

which are applicable to sources in the State, the State intends to

request delegation after adopting the rules. The details of this

delegation mechanism will be established prior to delegating any

section 112 standards. This program applies to both existing and future

standards but is limited to sources covered by the Part 70 program.

E. Title IV Provisions/Commitments

As part of the May 9, 1995 program submittal, Maryland committed to

submit all missing portions of the Title IV acid rain program by

November 15, 1995, including its State acid rain regulations.

III. Request for Public Comments

EPA is soliciting public comments on the issues discussed in this

notice or on other relevant matters. These comments will be considered

before taking final action. Interested parties may participate in this

federal rulemaking action by submitting written comments

[[Page 55237]]

to the EPA Regional office listed in the ADDRESSES section of this

notice.

Proposed Action

EPA is proposing to grant interim approval of the operating permits

program submitted by Maryland on May 9, 1995, and the Attorney

General's Legal Opinion submitted on June 9, 1995. The scope of

Maryland's Part 70 program applies to all Part 70 sources (as defined

in the program) within Maryland, except for 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

CAA as ``any 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.'' See section 302(r) of the

CAA; see also 59 FR 43956, 43962 (Aug. 25. 1994); 58 FR 54364 (Oct. 21,

1993). Prior to full approval by EPA, Maryland must make the following

changes:

1. The Maryland Environmental Standing Act (MESA) must be amended

to accord non-state residents and organizations not doing business in

Maryland the same standing to challenge Part 70 permit decisions as

other ``persons'' as defined in MESA, or, in the alternative, other

appropriate legislative action must be taken to ensure that standing

requirements for such organizations are not more restrictive than the

minimum requirements of Article III of the U.S. Constitution as they

apply to federal courts.

2. Revise the provisions for insignificant activities under COMAR

Sec. 26.11.03.04 as follows, to achieve consistency with the

requirements of 40 CFR 70.5(c):

a. Remove the exemption for ``any other emission unit that is not

subject to an applicable requirement of the Clean Air Act'' under COMAR

Sec. 26.11.03.04 A(18).

b. Revise COMAR Sec. 26.11.03.04 B to provide that a permit

applicant shall not omit information needed to determine the

applicability of, or to impose, any applicable requirement.

c. Revise COMAR Sec. 26.11.03.04 A(2) to add a justifiable

limitation on the exemption for boilers used exclusively to operate

steam engines for farm and domestic use.

3. Revise COMAR Sec. 26.11.03.21 to clarify that the procedures for

issuing general permits must include affected state and EPA review, and

that the state must keep a record of the public commenters and issues

raised during the public participation process, consistent with 40 CFR

70.7(h) and 70.8.

4. Revise COMAR Secs. 26.11.03.21 J and L to require that general

permits are revised according to procedures consistent with 40 CFR

70.7(e).

5. Revise COMAR Secs. 26.11.03.07 A(2), 26.11.03.08 A, and

26.11.03.20 C (4), (5) and (6) to provide that the procedures for

initial permit issuance also must be followed for permit reopenings, to

achieve consistency with the requirements of 40 CFR 70.7(f)(2).

6. Remove subsection F of COMAR Sec. 26.11.03.17, which

impermissibly allows sources to submit a permit application within 12

months after making a significant permit modification.

7. Revise COMAR Sec. 26.11.03.14 C to require that any relaxation

of a compliance plan or schedule will be processed as a significant

permit modification, consistent with 40 CFR 70.7(e)(4).

8. Revise the wording of COMAR Sec. 26.11.03.15 B(7), pertaining to

permit modifications for acid rain permits, consistent with 40 CFR

70.7(e).

9. Amend the Attorney General's Opinion to clarify that if the

Department proposes to change a final permit as a result of a contested

case decision by an Administrative Law Judge and pursuant to COMAR

Sec. 26.11.03.11, the Department will revoke the final permit and

reissue it with the proposed changes so as to provide EPA with the (45

day) review and comment period required pursuant to the CAA, 40 CFR

70.8 and COMAR Sec. 26.11.03.09.

10. Revise the Attorney General's Opinion to include a detailed

review of the State's Part 70 program regarding current federal

requirements for hazardous air pollutants.

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

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

is protected from sanctions for failure to have a fully approved Title

V, Part 70 program, and EPA is not obligated to promulgate a federal

permits program in Maryland. 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.

Requirements for approval, specified in 40 CFR 70.4(b), encompass

the CAA's section 112(l)(5) requirements for approval of a program for

delegation of section 112 standards applicable to Part 70 sources as

promulgated by EPA. Section 112(l)(5) requires that the State's program

contain adequate authorities, adequate resources for implementation,

and an expeditious compliance schedule, which are also requirements

under Part 70. Therefore, EPA is also proposing under section 112(l)(5)

and 40 CFR 63.91 to grant approval of Maryland'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.

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

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 to

propose interim approval of Maryland's operating permits program

pursuant to Title V of the CAA and 40 CFR Part 70 does not impose any

new requirements, it does not have a significant impact on a

substantial number of small entities.

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: October 20, 1995.

W. Michael McCabe,

Regional Administrator.

[FR Doc. 95-26856 Filed 10-27-95; 8:45 am]

BILLING CODE 6560-50-P