Clean Air Act Proposed Approval or, in the Alternative, Proposed Interim Approval of Operating Permits Program; Hamilton County, Tennessee

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[TN-CHAT-95-01; FRL-5328-1]

Clean Air Act Proposed Approval or, in the Alternative, Proposed

Interim Approval of Operating Permits Program; Hamilton County,

Tennessee

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed approval.

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SUMMARY: EPA proposes full approval of the operating permit program

submitted by the State of Tennessee on behalf of the Chattanooga-

Hamilton County Air Pollution Control Bureau (``CHCAPCB'' or ``the

County'') if certain changes are made prior to final EPA action on this

program. Alternatively, EPA proposes to grant interim approval if the

necessary changes are not made. CHCAPCB's operating permit program was

submitted 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 in the state.

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

December 8, 1995.

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

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

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

CHCAPCB's submittal and other supporting information used in developing

the proposed full/interim approval are available for inspection during

normal business hours at the following location: U.S. Environmental

Protection Agency, Region 4, third floor, 345 Courtland Street NE,

Atlanta, GA 30365.

FOR FURTHER INFORMATION CONTACT: Kelly Fortin, 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, GA 30365, (404) 347-3555, Ext. 4223.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the Clean Air Act (``the Act'') as

amended by the 1990 Clean Air Act Amendments, EPA promulgated rules on

July 21, 1992 (57 FR 32250) that define the minimum elements of an

approvable state operating permit program and the corresponding

standards and procedures by which EPA will approve, oversee, and

withdraw approval of state and local operating permit programs. These

rules are codified at 40 Code of Federal Regulations (CFR) part 70.

Title V and part 70 require that states develop, and submit to EPA,

programs for issuing operating permits to all major stationary sources

and to certain other sources.

The Act requires states to develop and submit these programs to EPA

by November 15, 1993, and EPA to approve to disapprove each program

within one year after receiving the submittal. If the state's

submission is materially changed

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during the one-year review period, 40 CFR 70.4(e)(2) allows EPA to

extend the review period for no more than one year following receipt of

the additional materials.

EPA reviews state operating permit programs pursuant to section 502

of the Act and 40 CFR part 70, 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. If EPA has not fully approved

a program by November 15, 1995, or by the end of an interim program, it

must establish and implement a Federal operating permit program.

II. Proposed Action and Implications

A. Analysis of State Submission

EPA has concluded that the operating permit program submitted by

the State of Tennessee on behalf of the Chattanooga-Hamilton County Air

Pollution Control Board substantially meets the requirements of title V

and part 70, and proposes to grant interim approval to the program or,

in the alternative, to grant full approval to the program if specified

changes are made, as will be discussed below. 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 Act, each state must develop and

submit to the Administrator an operating permit program under state or

local law or under an interstate compact meeting the requirements of

title V of the Act. On November 22, 1993, EPA received the title V

operating permit program submitted by the State of Tennessee on behalf

of the Chattanooga-Hamilton County Air Pollution Control Board. The

State of Tennessee Department of Environment and Conservation

requested, under signature of the Tennessee Governor's designee,

approval of the CHCAPCB's operating permit program. The State

supplemented the program submittal, on behalf of the County, on January

23, 1995, February 24, 1995, and October 13, 1995.

The program submittal includes a legal opinion from independent

legal council for the Chattanooga-Hamilton County Air Pollution Control

Board demonstrating adequate legal authority for the implementation and

enforcement of the local part 70 program. The program submittal

contains a description of how the CHCAPCB intends to implement the

program consistent with the requirements of the Clean Air Act

Amendments of 1990 (42 U.S.C. 7401-7671q) and 40 CFR part 70. The

program submittal also includes supporting documentation, such as

evidence of the procedurally correct adoption of the permitting rules,

permit application forms, and a detailed enforcement agreement with

EPA. The submittal was determined to be administratively complete on

January 24, 1995.

2. Regulations and Program Implementation

The Chattanooga-Hamilton County Air Pollution Control Board,

operating under a certificate of exemption pursuant to Tennessee Code

Annotated, Section 68-201-115, has authority to administer the

operating permits program in all areas of Hamilton County, Tennessee,

with the exception of Indian reservations and tribal lands. The CHCAPCB

operating permits program is implemented and enforced through: (1) the

Chattanooga Air Pollution Control Ordinance (within the incorporated

municipality of the City of Chattanooga, Tennessee); (2) the Hamilton

County Air Pollution Control regulation (in the unincorporated areas of

Hamilton County, Tennessee); and (3) air pollution control ordinances

prepared for and enacted in the incorporated municipalities of East

Ridge, Red Bank, Soddy-Daisy, Signal Mountain, Lakesite, Walden,

Collegedale, Lookout Mountain, and Ridgeside.

EPA has determined that the above regulations, constituting the

Chattanooga-Hamilton County operating permits program, substantially

meet the requirements of 40 CFR 70.2 and 70.3 for applicability; 40 CFR

70.4, 70.5, and 70.6 for permit content (including operational

flexibility); 40 CFR 70.7 and 70.8 for permit processing requirements

(including public participation and permit modifications); and 40 CFR

70.11 for requirements for enforcement authority. The CHCAPCB's

operating permit program closely follows the federal part 70

regulations. The TSD contains a detailed analysis of CHCAPCB's program

and references the sections of the applicable local regulations that

meet the required elements of an approvable program under 40 CFR part

70.

Under part 70, a state must request approval of, and EPA may

approve as part of that state or local program, any activities or

emission levels that the state wishes to consider insignificant. Part

70, however, does not establish emissions thresholds for insignificant

activities. EPA has accepted emissions thresholds of five tons per year

for criteria pollutants, and the lesser of 1000 pounds per year or

section 112(g) de minimis levels for hazardous air pollutants, as

reasonable.

Section 70.4(b)(2) requires states to include in their part 70

programs any criteria used to determine insignificant activities or

emission levels for the purposes of determining complete applications.

Section 70.5(c) states that an application for a part 70 permit may not

omit information needed to determine the applicability of, or to

impose, any applicable requirement, or to evaluate appropriate fee

amounts.

Section 7(c)(11) of the Hamilton County Regulation (section 4-56.11

of the Chattanooga Code) lists certain units or activities that, due to

de minimis emission levels, need not be included in a part 70 permit

application. CHCAPCB believes that these activities generally have a

potential to emit below 5 tons per year of criteria or regulated

hazardous air pollutants without size or production rate limitations.

Section 7(c)(12) of the Hamilton County Regulation (section 4-56.12 of

the Chattanooga Code) lists activities that are deemed to be

insignificant due to size and production rate and that must be listed

in a part 70 permit application but need not have emissions related

information reported. CHCAPCB believes these activities have a

potential to emit of less that 5 tons per year of any criteria or

regulated hazardous air pollutant. CHCAPCB's regulations specify that

an application may not omit information needed to determine the

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

evaluate the fee amount required.

CHCAPCB specified that the listed insignificant activities are

expected to have emissions below five tons per year of criteria and

regulated hazardous air pollutants. As stated above, EPA has accepted

emissions thresholds of the lesser of 1000 pounds per year or section

112(g) de minimis levels for hazardous air pollutants. In addition,

while CHCAPCB specified the 5 ton per year threshold as the criteria

used to develop the insignificant activities list, no emission

thresholds were specified in the regulations. The submittal also did

not include any information on the estimated level of emissions from

activities, nor a demonstration that these activities are not likely to

be subject to an applicable requirement.

EPA has reviewed CHCAPCB's significant activities lists and is

concerned that several of the activities

[[Page 56287]]

may conflict with applicable requirements and may not have emissions

levels that are sufficiently below the applicability thresholds to

assure that no unit potentially subject to an applicable requirement is

left off a title V application, especially with respect to emissions of

hazardous air pollutants. EPA has identified these activities of

concern in the technical support document available in the docket for

this rulemaking.

As a condition of full approval, CHCAPCB must remove, clarify, or

limit the activities in question and/or document that they are not

potentially subject to an applicable requirement. In revising the

insignificant activities lists, CHCAPCB must consider emissions of all

regulated air pollutants, not just criteria and hazardous air

pollutants. In addition, CHCAPCB must establish emission threshold

criteria that will not conflict with section 112(g) de minimis levels

for hazardous air pollutants. As stated above, EPA has accepted

emissions thresholds of the lesser of 1000 pounds per year or section

112(g) de minimis levels, as reasonable.

Part 70 requires prompt reporting of deviations from the permit

requirements. Section 70.6(a)(3)(iii)(B) requires the permitting

authority to define ``prompt'' in relation to the applicable

requirements and type of deviation likely to occur. Although the permit

program regulations should define ``prompt'' for purposes of

administrative efficiency and clarity, an acceptable alternative is to

define ``prompt'' in each individual permit. EPA believes that

``prompt'' should generally be defined as requiring reporting within

two to ten days of the deviation. Two to ten days is sufficient time in

most cases to protect public health and safety as well as to provide a

forewarning of potential problems. For sources with a low level of

excess emissions, a longer time period may be acceptable. However,

prompt reporting must be more frequent than the semiannual reporting

requirement, given this is a distinct reporting obligation under

section 70.6(a)(3)(iii)(A). Where ``prompt'' is defined in the

individual permit but not in the program regulations, EPA may veto

permits that do not contain sufficiently prompt reporting of

deviations. CHCAPCB has not defined ``prompt'' in its program, but

rather intends to require the prompt reporting of deviations in the

individual permits.

The Chattanooga-Hamilton County Air Pollution Control Board has the

authority to issue variances from requirements imposed by local law.

Section 4-21 of the Chattanooga ordinance, and the corresponding

chapters of the Hamilton County and local municipalities' regulations,

allow CHCAPCB discretion to grant relief from compliance with local

requirements for up to one year. EPA regards this provision as wholly

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

consequently proposes to take no action on this provision of the local

program.

EPA has no authority to approve provisions of local law, such as

the variance provision referred to, that are inconsistent with title V.

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 the 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 permit issuance or

modification procedures, the schedule of compliance set forth in a

variance. However, EPA reserves the right to pursue enforcement of

applicable requirements notwithstanding the existence of a compliance

schedule in a permit to operate. This is consistent with 40 CFR

70.5(c)(8)(iii)(C), which states that a schedule of compliance ``shall

be supplemental to, and shall not sanction noncompliance with, the

applicable requirements on which it is based.''

3. Permit Fee Demonstration

Section 502(b)(3) of the Act requires each permitting authority to

collect fees sufficient to cover all reasonable direct and indirect

costs necessary for the development and administration of its title V

operating permit 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 of emissions per year (adjusted from 1989 by the Consumer Price

Index (CPI)). The $25 per ton is presumed, for program approval, to be

sufficient to cover all reasonable program costs and is thus referred

to as the ``presumptive minimum.''

The Chattanooga-Hamilton County Air Pollution Control Board has

elected to adopt a presumptive minimum fee of $29.32 per ton for each

annual accounting period (adjusted by the CPI as required). The fee

demonstration showed that the fees collected will adequately cover the

anticipated costs of the operating permit program. The program

activities that will constitute CHCAPCB's title V operating permit

program are consistent with the activities described in 40 CFR

70.9(b)(1). Section 4-60 of the Chattanooga Code provides that an

annual accounting of the operating permit program will be performed to

ascertain whether the annual fees collected are sufficient to support

the direct and indirect costs of the title V program.

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

a. Authority for Section 112 Implementation. In its program

submittal, Chattanooga-Hamilton County demonstrates adequate legal

authority to implement and enforce all section 112 requirements through

the title V permit. This legal authority is contained in regulatory

provisions defining ``applicable requirements'' and requiring each

permit to incorporate conditions that assure compliance with all

applicable requirements. In addition, this definition includes language

that clarifies that in the period after federal adoption, and before

local adoption, the part 70 permit will specify that the source is

subject to the cited federal standard. EPA is interpreting the above

legal authority to mean that Chattanooga-Hamilton County is able to

carry out all section 112 activities with respect to part 70. For

further discussion, please refer to TSD accompanying this action and

the April 13, 1993 guidance memorandum entitled, ``Title V Program

Approval Criteria for Section 112 Activities,'' signed by John Seitz.

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

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

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

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

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

forth in detail the rationale for the revised interpretation.

The section 112(g) interpretative notice explains that EPA is

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

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

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

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

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

additional postponement of section 112(g), Chattanooga-Hamilton County

must have a Federally enforceable mechanism for implementing section

112(g) during the period between promulgation of the

[[Page 56288]]

Federal section 112(g) rule and adoption of implementing local

regulations.

EPA is aware that Chattanooga-Hamilton County lacks a program

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

Chattanooga-Hamilton County does have a preconstruction review program

that can serve as an adequate implementation vehicle during the

transition period because it would allow the County to select control

measures that would meet the maximum achievable control technology

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

a Federally enforceable preconstruction permit.

For this reason, EPA proposes to approve the use of Chattanooga-

Hamilton County's preconstruction review programs found in Section 4-8

of the Chattanooga Code, and the corresponding sections of the Hamilton

County and local municipalities' regulations, under the authority of

title V and part 70, solely for the purpose of implementing section

112(g) to the extent necessary during the transition period between

section 112(g) promulgation and adoption of a local rule implementing

EPA's section 112(g) regulations. Although section 112(l) generally

provides authority for approval of state and local air programs to

implement section 112(g), title V and section 112(g) provide for this

limited approval because of the direct linkage between the

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

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

imply approval for purpose of any other provision under the Act (e.g.,

section 110). This approval will be without effect if EPA decides in

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

requirements of the rule until local 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 Chattanooga, Hamilton County, and the affected municipalities to

adopt regulations consistent with the Federal requirements.

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

The requirements for part 70 program approval, specified in 40 CFR

70.4(b), encompass section 112(1)(5) requirements for approval of a

state program for delegation of section 112 standards promulgated by

EPA as they apply to title V sources. Section 112(1)(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 also proposes to grant

approval, under section 112(1)(5) and 40 CFR 63.91, of Chattanooga-

Hamilton County's program for receiving delegation of section 112

standards that are unchanged from the Federal standards as promulgated

and to delegate existing standards and programs under 40 CFR parts 61

and 63 for part 70 sources and non-part 70 sources. This program for

delegation applies to both existing and future standards, and to part

70 and non-part 70 sources. CHCAPCB has informed EPA that it intends to

accept delegation of section 112 standards through incorporation by

reference. The details of the CHCAPCB's delegation mechanism is set

forth in a letter to EPA, dated October 19, 1995, and is contained in

the docket for this action

d. Commitment to Implement Title IV of the Act. On March 29, 1995,

EPA published a Federal Register Notice (60 FR 16127) notifying

affected sources that the CHCAPCB's acid rain program had been

established and that CHCAPCB's regulations are acceptable for the

purposes of administering an acid rain program. Chattanooga-Hamilton

County has committed to incorporate by reference, following

promulgation by EPA, any new or revised provision of 40 CFR part 72 or

provisions implementing sections 407 and 410 of the Act.

B. Proposed Actions

1. Full Approval

The EPA proposes to fully approve the operating permits program

submitted to the EPA by the State of Tennessee of behalf of the

Chattanooga-Hamilton County Air Pollution Control Board on November 22,

1995, if certain changes are made to the program and submitted to EPA

prior to EPA's final action on this proposal. As a condition of full

approval, CHCAPCB must remove, clarify, or limit certain insignificant

activities and/or document that they are not potentially subject to an

applicable requirement. EPA has determined that the program is

otherwise adequate to meet the minimum elements of a local operating

permits program as specified in 40 CFR part 70.

2. Interim Approval

EPA is proposing to grant interim approval to the operating permits

program under 40 CFR 70.4(d) if the changes required for full approval,

as described above, are not made prior to final promulgation of this

rulemaking. EPA can grant interim approval because CHCAPCB's permit

program substantially meets the approval process and requirements of

part 70, as discussed in section II(A) of this notice. The problems

noted above will not prevent CHCAPCB for issuing permits that are

consistent with part 70 on an interim basis.

If EPA grants interim approval to CHCAPCB, the interim approval

would extend for two years following the effective date of final

interim approval, and could not be renewed. During the interim approval

period, Hamilton County would not be subject to sanctions, and EPA

would not be obligated to promulgate, administer, and enforce a Federal

operating permit program for the County. Permits issued under a program

with interim approval are fully effective with respect to part 70 and

the three-year time period for processing the initial permit

applications will begin upon the effective date of final interim

approval.

Following the granting of final interim approval, if the

Chattanooga-Hamilton County Air Pollution Control Board fails to submit

a complete corrective program for full approval by the date six months

before expiration of the interim approval, EPA will start an 18-month

clock for mandatory sanctions. If the Chattanooga-Hamilton County Air

Pollution Control Board then fails to submit a corrective program that

EPA finds complete before the expiration of that 18-month period, EPA

is required to apply one of the sanctions in section 179(b) of the Act,

which will remain in effect until EPA determines that the Chattanooga-

Hamilton County Air Pollution Control Board has corrected the

deficiency by submitting a complete corrective program.

3. Program for Straight Delegation of Section 112 Standards

As discussed previously in section II.A.4.b., EPA proposes to

approve Chattanooga-Hamilton County's preconstruction review program,

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

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

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

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

In addition, as discussed in section II.A.4.c., EPA proposes to

grant approval under section 112(1)(5) and 40 CFR 63.91 to CHCAPCB for

receiving delegation of section 112 standards that are unchanged from

Federal standards as promulgated. EPA also proposes to delegate all

existing standards under 40

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CFR part 61 and 63 both part 70 and non-part 70 sources.

4. Other Implications

The scope of Chattanooga-Hamilton County's part 70 program that EPA

proposes to approve, or interimly approve in the alternative, in this

notice would apply to all part 70 sources (as defined in the approved

program) within Hamilton County, 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. 24,

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

III. Administrative Requirements

A. Request for Public Comments

EPA requests comments on all aspects of this proposed full/interim

approval. Copies of CHCAPCB's submittal and other information relied

upon for the proposed alternatives of full approval and interim

approval are contained in docket number TN-CHAT-95-01, maintained at

the EPA Regional Office. The docket is an organized and complete file

of all the information submitted to, or otherwise considered by, EPA in

the development of this proposed full/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. EPA will

consider any comments received by December 8, 1995.

B. Executive Order 12866

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

C. Regulatory Flexibility Act

EPA's actions under section 502 of the Act do not create any new

requirements, but simply address operating permit 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 Reform Act of 1995

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 action promulgated today does

not include a Federal mandate that may result in estimated costs of

$100 million or more to State, local, or tribal governments in the

aggregate, or to the private sector. This Federal action approves pre-

existing requirements under State or local law, and imposes no new

Federal requirements. Accordingly, no additional costs to State, local,

or tribal governments, or to the private sector, result from this

action.

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations, Operating permits,

and Reporting and recordkeeping requirements.

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

Dated: October 31, 1995.

Patrick M. Tobin,

Acting Regional Administrator.

[FR Doc. 95-27698 Filed 11-7-95; 8:45 am]

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