Clean Air Act Final Interim Approval of the Operating Permits Program; Nevada Division of Environmental Protection; Nevada

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5344-9]

Clean Air Act Final Interim Approval of the Operating Permits

Program; Nevada Division of Environmental Protection; Nevada

AGENCY: Environmental Protection Agency (``EPA'').

ACTION: Final Interim Approval.

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SUMMARY: The EPA is promulgating interim approval of the title V

operating permits program submitted by the Nevada Division of

Environmental Protection (``NDEP'' or ``State'') for the purpose of

complying with federal requirements that mandate that states develop,

and submit to EPA, programs for issuing operating permits to all major

stationary sources and to certain other sources.

EFFECTIVE DATE: January 11, 1996.

ADDRESSES: A copy of NDEP's submittal and other supporting information

used in developing the final approval are available for inspection

(docket number NV-DEP-95-1-OPS) during normal business hours at the

following location: U.S. Environmental Protection Agency, Region IX,

Air & Toxics Division, 75 Hawthorne Street, San Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Celia Bloomfield (telephone 415/744-

1249), Mail Code A-5-2, U.S. Environmental Protection Agency, Region

IX, Air & Toxics Division, 75 Hawthorne Street, San Francisco, CA

94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

Title V of the 1990 Clean Air Act Amendments (sections 501-507 of

the Clean Air Act (``Act'')), and implementing regulations at 40 Code

of Federal Regulations (``CFR'') part 70, require that states develop

and submit operating permits programs to EPA by November 15, 1993, and

that EPA act to approve or disapprove each program within 1 year after

receiving the submittal. The EPA's program review occurs pursuant to

section 502 of the Act and the part 70 regulations, which together

outline criteria for approval or disapproval. Where a program

substantially, but not fully, meets the requirements of part 70, 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, it must establish

and implement a federal program.

On August 7, 1995, EPA proposed interim approval of the operating

permits program for NDEP (``NPRM''). See 60 FR 40140. In that Federal

Register document, EPA also proposed approval of NDEP's interim

mechanism for implementing section 112(g) and its program for

delegation of section 112 standards as promulgated as they apply to

title V and non-title V sources. Public comment was solicited on the

three proposed actions, and EPA is responding to those comments in this

document and in a separate ``Response to Comments'' document that is

available in the docket at the Regional office.

II. Final Action and Implications

A. Analysis of State Submission and Response to Public Comments

The August 7, 1995 Federal Register notice proposed interim

approval of NDEP's title V operating permits program as submitted on

February 8, 1995. EPA is aware that NDEP has revised its implementing

regulations since the February 8, 1995 submission; however, those

revisions have not been submitted to EPA for approval and are not part

of the program being approved in today's final action.

EPA received comments on the NPRM from two commenters: the National

Mining Association (``NMA'') and NDEP. With one exception, the program

deficiencies identified in the NPRM remain unchanged as a result of

public comment. Based on public comment and further analysis, the

deficiency identified in section II.B.1.(2) of the NPRM has been

removed; i.e., NDEP's definition of ``regulated air pollutant'' is

fully approvable. See section II.A.4. below for further discussion. The

commenters also provided a few program clarifications which are

discussed below. Furthermore, please note that an issue raised as a

deficiency in the context of ``insignificant activities'' and discussed

in section II.A.2.c. of the proposed notice has become a separate

interim approval issue as a result of public comment. See section

II.A.1. for more information. No adverse public comment was received on

the proposed approvals of NDEP's program for delegation of section 112

standards as promulgated or transition mechanism for implementing

section 112(g), and hence, those approvals have not been altered as a

result of public comment.

1. Applicability

In response to a program deficiency identified by EPA in section

II.B.1.(10) of the NPRM, NDEP commented that it does not plan to permit

any source that is subject to the New Source Performance Standard

(``NSPS'') for new residential wood heaters or the National Emissions

Standard for Hazardous Air Pollutants (``NESHAP'') for asbestos

demolition because the State has not accepted delegation for such

standards.

In order to have a fully approvable program, a state must have

authority to permit all major sources and to write permits that assure

compliance with all federal applicable requirements. If under State law

NDEP must receive delegation of a federal requirement before it can

write that requirement into a permit or assure compliance with that

requirement, then NDEP must seek and receive delegation in sufficient

time to issue the permit. It is possible for Nevada to obtain

delegation of an NSPS or NESHAP requirement solely for title V sources.

In the NPRM, EPA relied on the Nevada Attorney General's legal

opinion (dated November 15, 1993) that NDEP has authority to issue

permits to all

[[Page 63632]]

sources required to have permits pursuant to section 502(a) of the Act

and Sec. 70.3 of part 70 (p. 2 of legal opinion), and authority to

``require that all applicable requirements be incorporated into an

operating permit'' (p. 8 of legal opinion). In addition, NDEP has

committed to implement all applicable requirements, including those

that would necessitate State rule adoption prior to incorporation into

the permit. (See Program Submittal, Section II.A.2., pp. II-1 to II-2.)

EPA expects NDEP to issue permits to all major sources and to include

all applicable requirements in those permits. If a regulatory

impediment exists outside of the submitted program, then NDEP must

eliminate it in order to have a fully approvable program.

In response to EPA's discussion in the NPRM (section II.A.2.c.) on

insignificant activities, NDEP commented that two of the listed

insignificant activities, agricultural land use and equipment or

contrivances used for food processing, are ``unpermittable

activities.'' EPA regards this comment as ambiguous given that NAC

445B.293.1 (previously NAC 445.705.1) requires, and the Attorney

General's legal opinion confirms, that all major sources (with the two

exceptions noted above) must obtain operating permits. Furthermore, EPA

assumed that if information is provided in the application because it

is needed to ``establish the basis for the applicability of standards''

(section 445B.295.2(b), previously 445.7054.2(b)), then the units

subject to such standards (i.e., applicable requirements) would be

contained in the permit. EPA expects NDEP to implement its

insignificant activities provisions in a manner consistent with both

part 70 and the provisions of the NAC relied upon in the NPRM, that is:

(1) Emissions from insignificant activities must be considered in

applicability determinations; (2) Class I permit applications may not

omit any information needed to determine or impose any applicable

requirement; and (3) if an applicable requirement applies to a unit at

a major source, that unit must be permitted. In order to have a fully

approvable program, NDEP must remove all ambiguity regarding the

permitting of agricultural and food processing activities and clearly

require all major sources to obtain Class I permits. If a regulatory

impediment exists outside of the submitted program, then NDEP must

eliminate that impediment prior to full program approval.

Also, in the NPRM, EPA noted that NDEP's program contains

inconsistencies with regard to the applicability of nonmajor sources to

title V. (See 60 FR 40141-40142, section II.A.2.a. ``applicability.'')

EPA requested a letter from NDEP clarifying how it intends to carry out

the applicability requirements in its program.

In the comment letter received from NDEP on September 6, 1995, the

State informed EPA that it has already corrected the ambiguity

regarding whether or not nonmajor sources subject to a section 111 or

112 standard are subject to title V. NDEP revised the Nevada

Administrative Code on April 4, 1995 to clearly state that ``major,''

and not ``minor,'' new sources subject to sections 111 and 112 will be

permitted as Class I-B sources.

2. Insignificant Activities

One commenter asserted that EPA's position in the NPRM regarding

insignificant activities is inconsistent with the July 10, 1995 ``White

Paper,'' which gives states flexibility in designating insignificant

activities. EPA disagrees that the NPRM is inconsistent with the

``White Paper'' with regard to insignificant activities. EPA is not

questioning the State's authority to identify insignificant activities;

rather, EPA is rejecting the unbounded nature of some of the listed

activities.

The meaning of the term ``insignificant'' as used in section

70.5(c) is that information is unessential for determining whether and

how an applicable requirement applies at a source. If emissions at an

activity are extremely low, that activity is unlikely to be subject to

an applicable requirement. That is why EPA suggested that NDEP create

an across-the-board emissions threshold above which activities could

not qualify as insignificant. Without an across-the-board threshold or

unit-specific limits, activities on NDEP's list, such as ``agricultural

land use'' and ``equipment or contrivances used exclusively for the

processing of food'' could be construed as being ``insignificant'' even

if subject to an applicable requirement. Where there is a chance that

an activity is subject to an applicable requirement (e.g., food

processing activities may be subject to the yeast manufacturing

NESHAP), EPA needs additional criteria, such as an emissions threshold,

to ensure that the activity is insignificant for part 70 permitting

purposes.

The commenter further contended that NDEP's regulation already

prohibits activities subject to an applicable requirement from

qualifying as insignificant. Nevertheless, the commenter asked whether

the following language would resolve EPA's concerns: ``[N]o source

subject to an applicable requirement may qualify as an insignificant

activity.''

EPA disagrees that NDEP's regulation clearly prohibits activities

subject to an applicable requirement from qualifying as insignificant.

In fact, NDEP's list of insignificant activities contains activities,

such as air-conditioning equipment, that are almost certainly subject

to an applicable requirement. Unless NDEP removes from the list of

insignificant activities those activities that are likely to be subject

to a unit-specific applicable requirement, the language proposed by the

commenter might only cause confusion. However, the language proposed by

the commenter would help clarify that insignificant activities

provisions do not exempt sources from title V and do not relieve

sources from having to comply with any applicable requirements.

Another comment received on insignificant activities is that EPA's

recommended emissions thresholds are arbitrary and unnecessary. The

commenter pointed out that other state programs have allowed emission

thresholds that are higher than EPA's recommended limits for HAP

emissions.

As stated in the proposed notice, EPA will review and evaluate any

emissions thresholds proposed by NDEP. Emissions thresholds should

reflect state-specific circumstances. Part 70 specifically provides

that the permitting authority is responsible for providing the

``criteria used to determine insignificant activities or emission

levels.'' NDEP may use levels approved in other state programs as

guidance.

3. Reporting of Permit Deviations

Both commenters disagreed with EPA's statement that each permit

must define ``prompt'' for purposes of prompt reporting of deviations.

According to the commenters, ``prompt'' is already defined in NAC

445B.232.4 (previously 445.667.4) as reporting any excess emissions

within 24 hours. In addition, NAC 445B.326 (previously 445.7133)

defines prompt for emergencies.

The purpose of defining ``prompt'' in either the title V program or

the title V permit is to notify the source of its exact reporting

obligation. While NAC 445B.232.4 defines ``prompt'' in an acceptable

manner, it is not currently part of NDEP's title V program. However,

NAC 445B.326 was submitted as part of NDEP's title V program, and EPA

agrees that ``prompt'' has already been defined for emergencies covered

by that provision.

Given that permits must contain ``all applicable reporting

requirements'' and that the definition of ``applicable

[[Page 63633]]

requirement'' in NDEP's program includes State-only requirements, EPA

believes that sources are adequately notified of their reporting

obligation for the interim period. Therefore, during the interim

period, NDEP may rely on NAC 445B.232.4 to define ``prompt'' rather

than defining it in each individual permit. For full approval, however,

NDEP must either submit NAC 445B.232.4 for inclusion in its approved

program, or define ``prompt'' in each permit.

4. Regulated Air Pollutant

Both commenters disagreed with EPA's position that the definition

of ``regulated air pollutant'' in NAC 445B.153 (previously 445.5905) is

deficient. EPA identified NDEP's definition of ``regulated air

pollutant'' as a program deficiency because it appeared to be

inconsistent with the part 70 definition. Specifically, NDEP's

definition seemed to exclude pollutants that are subject to

requirements of the Act (such as title VI and sections 112(g), 112(j),

and 112(r)), but are not subject to promulgated standards. This

apparent inconsistency is not an issue, however, for Class I and Class

II pollutants since they are all currently subject to promulgated

requirements (57 FR 31242, July 14, 1992). It is also not an issue for

section 112 requirements since NDEP's definition of ``regulated air

pollutant'' can be interpreted broadly to include pollutants regulated

by sections 112(g), 112(j), and 112(r) of the Act.

5. Duty to Apply

One commenter asked EPA to clarify what application trigger is

missing from the State's title V program. In order to understand the

deficiency, one must look at the language in part 70 which states that

an initial title V application is due ``within 12 months after the

source becomes subject to the permit program'' (section 70.5(a)(1)). As

is the case in NDEP's regulation, a source may ``become subject'' upon

the effective date of the program or after commencing operation of a

new source. However, these two situations are not the only scenarios

that would make a source subject to title V for the first time. For

instance, a source may become subject to title V upon promulgation of a

MACT standard that does not exempt nonmajor sources to obtain title V

permits. Similarly, the Administrator could designate a category of

nonmajor sources to be subject to title V. Finally, facility

modifications may increase a source's potential to emit to above the

major source level, thus making a source newly subject to title V. For

these reasons, NDEP's regulation must be revised for full approval.

6. Permit Shield

NDEP disputed EPA's comment in the NPRM that the program's permit

shield provisions are deficient. Because a permit shield may insulate a

source from enforcement, it is essential for EPA and the public to know

when a permit shield is in the permit and exactly which conditions the

permit shield is covering. According to NDEP's regulation, permits may

be written to provide the benefits of a permit shield without expressly

stating that a permit shield exists. This approach is plainly

inconsistent with Sec. 70.6(f)(2) which states that: ``[a] part 70

permit that does not expressly state that a permit shield exists shall

be presumed not to provide such a shield.'' NDEP must make all the

changes identified in the proposed notice in order to have fully

approvable permit shield provisions.

7. Emissions Trading

NDEP commented that it does not intend to provide the emissions

trading opportunity specified in Sec. 70.6(a)(10) and that it intends

to remove the existing provisions for trading under a federally

enforceable emissions cap, which are now located in NAC 445B.316.1(g)

(previously NAC 445.7114.1(g)) and which satisfy the requirements of

Sec. 70.4(b)(12)(iii). Consequently, NDEP indicated that it will not

correct the regulatory deficiencies with regard to trading identified

in the proposed approval notice under section II.B.1.(9). NDEP noted,

however, that it will allow trading as an alternative operating

scenario.

The federal part 70 regulation does not give states discretion

about whether to allow the emissions trading provisions of

Secs. 70.6(a)(10) and 70.4(b)(12)(iii). First, Sec. 70.6(a)(10) says

that the permitting authority cannot deny trading opportunities where

such opportunities are provided by the underlying applicable

requirement. For instance, if NDEP permits a source subject to the

Hazardous Organic NESHAP (HON), which allows for trading without a

case-by-case approval, and the source requests to take advantage of the

trading provisions of the HON, then NDEP must establish trading terms

and conditions in the source's permit. Second, Sec. 70.4(b)(12)(iii)

states that the permitting authority ``shall'' allow for trading under

a federally enforceable emissions cap. In the proposed approval, EPA

relied on NAC 445.7114.1(g) to satisfy the requirements for trading

under a federally enforceable emissions cap. If NDEP removes such

trading provisions from its program, the program will become deficient

with regard to operational flexibility. Moreover, EPA is not convinced

that NDEP's alternative operating scenario provisions provide an

adequate framework for these types of trading opportunities.

B. Final Action

1. Title V Operating Permits Program

The EPA is promulgating interim approval of NDEP's title V

operating permits program as submitted on February 8, 1995. In order to

receive full approval, NDEP must correct the ten program deficiencies

listed in the proposed interim approval document under section

II.B.1.(1, 3-11) 1 as well as one additional deficiency regarding

the unpermittable status of agricultural and food processing activities

which was identified as a result of public comment and is discussed

above in section II.A.1.

\1\ Please see the proposed interim approval document (60 FR

40143-40144, August 7, 1995) for a list of changes that must be made

in order for NDEP's program to be fully approvable.

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The scope of NDEP's part 70 program approved in this notice applies

to all sources under NDEP's jurisdiction. It does not apply to 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 Act; see also

59 FR 43956, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 21, 1993).

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

January 12, 1998. The specific conditions of the interim approval,

NDEP's obligation to submit a complete corrective program, and the

potential use of sanctions were set out in the proposed notice (60 FR

40140, August 7, 1995, section I.B.) and will not be repeated in this

document.

2. State Preconstruction Permit Program Implementing Section 112(g)

EPA is approving the use of NDEP's integrated preconstruction/

operating permit program as a mechanism to implement section 112(g)

during the transition period between promulgation of EPA's section

112(g) rule and adoption by NDEP of rules specifically designed to

implement section 112(g).

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EPA is limiting the duration of this approval to 18 months following

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

3. Program for Delegation of Section 112 Standards as Promulgated

EPA is promulgating approval under section 112(l)(5) and 40 CFR

section 63.91 of NDEP's program for receiving delegation of section 112

standards that are unchanged from federal standards as promulgated. EPA

is approving NDEP's delegation mechanism for part 70 and non-part 70

sources.

III. Administrative Requirements

A. Docket

Copies of NDEP's submittal and other information relied upon for

the final interim approval, including public comment letters received

and reviewed by EPA on the proposal, are contained in docket number NV-

DEP-95-1-OPS 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 final interim

approval. The docket is available for public inspection at the location

listed under the ADDRESSES section of this document.

B. Executive Order 12866

The Office of Management and Budget has exempted this action from

review under Executive Order 12866 review.

C. Regulatory Flexibility Act

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

new requirements, but simply address operating 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

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 approval action promulgated today does not include a federal

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

either state, local, or tribal governments in the aggregate, or to the

private sector. This federal action approves pre-existing requirements

under state or local law, and imposes no new federal requirements.

Accordingly, no additional costs to state, local, or tribal

governments, or to the private sector, result from this action.

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Hazardous substances, Intergovernmental

relations, Operating permits, and Reporting and recordkeeping

requirements.

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

Dated: December 1, 1995.

Felicia Marcus,

Regional Administrator.

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Part 70, title 40 of the Code of Federal Regulations is amended as

follows:

PART 70--[AMENDED]

1. The authority citation for part 70 continues to read as follows:

Authority: 42 U.S.C. 7401, et seq.

2. Appendix A to part 70 is amended by adding paragraph (a) to the

entry for Nevada:

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

Permits Programs

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The following state program was submitted by the Nevada Division of

Environmental Protection:

(a) Nevada Division of Environmental Protection: submitted on

February 8, 1995; interim approval effective on January 11, 1996;

interim approval expires January 12, 1998.

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[FR Doc. 95-30261 Filed 12-11-95; 8:45 am]

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