Clean Air Act (CAA) Proposed Interim Approval of Operating Permits Program and Delegation of 112(l) Authority; State of Missouri

[[Page 64404]]

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5346-6]

Clean Air Act (CAA) Proposed Interim Approval of Operating

Permits Program and Delegation of 112(l) Authority; State of Missouri

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the operating permits

program submitted by the state of Missouri for the purpose of complying

with Federal requirements for states which develop, and submit to EPA,

programs for issuing operating permits to all major stationary sources

and to certain other sources. This notice explains EPAs rationale for

the proposed action, and identifies revisions to the program which must

be made before EPA can take final action to fully approve it.

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

January 16, 1996.

ADDRESSES: Comments should be addressed to Joshua A. Tapp, U.S.

Environmental Protection Agency, Region VII, Air Branch, 726 Minnesota

Avenue, Kansas City, Kansas 66101.

Copies of the Missouri submittal and other supporting information

used in developing the proposed interim approval are available for

inspection during normal business hours at the U.S. Environmental

Protection Agency, Region VII, Air Branch, 726 Minnesota Avenue, Kansas

City, Kansas 66101.

FOR FURTHER INFORMATION CONTACT: Joshua Tapp at (913) 551-7606.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under Title V of the Clean Air Act (the Act) 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. Title V requires states to develop, and

submit to EPA, programs for issuing these operating permits to all

major stationary sources and to certain other sources.

The Act requires that states develop and submit these programs to

EPA by November 15, 1993, and that EPA act to approve or disapprove

each program within one year after receiving the submittal. The EPA's

program review occurs pursuant to section 502 of the Act and the part

70 regulations, which together outline criteria for approval or

disapproval. Where a program substantially, but not fully, meets the

requirements of part 70, EPA may grant the program interim approval for

a period of up to two years. If EPA has not fully approved a program by

two years after the November 15, 1993, date, or by the end of an

interim period, it must establish and implement a Federal program.

B. Federal Oversight and Sanctions

If EPA were to finalize this proposed interim approval, it would

extend for 18 months following the effective date of final interim

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

the state of Missouri would be protected from sanctions for failure to

have an approved program, and EPA would not be obligated to promulgate,

administer, and enforce a Federal permits program for Missouri. Permits

issued under a program with interim approval have full standing with

respect to part 70, and the one-year time period for submittal of

permit applications by subject sources begins upon the effective date

of interim approval, as does the three-year time period for processing

the initial permit applications.

Following the final interim approval, if Missouri has failed to

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

months before expiration of the interim approval, an 18-month clock for

mandatory sanctions would commence. If Missouri then failed to submit a

corrective program that EPA found complete before the expiration of

that 18-month period, EPA would apply sanctions as required by section

502(d)(2) of the Act, which would remain in effect until EPA determined

that the state of Missouri had corrected the deficiency by submitting a

complete corrective program.

If, following final interim approval, EPA were to disapprove

Missouri's complete corrective program, EPA would be required under

section 502(d)(2) to apply sanctions on the date 18 months after the

effective date of the disapproval, unless prior to that date Missouri

had submitted a revised program and EPA had determined that it

corrected the deficiencies that prompted the disapproval.

If EPA has not granted full approval to Missouri's program by the

expiration of an interim approval, EPA must promulgate, administer, and

enforce a Federal permits program for Missouri upon interim approval

expiration.

II. Proposed Action and Implications

A. Analysis of Submission by State Authority

The analysis contained in this notice focuses on specific elements

of the Missouri Department of Natural Resources (MDNR) Title V

operating permits program that must be corrected to meet the minimum

requirements of part 70. The full program submittal; the Technical

Support Document (TSD), which contains a detailed analysis of the

submittal; and other relevant materials are available for inspection as

part of the public docket. The docket may be viewed during regular

business hours at the address listed above.

1. Support Materials

The Governor of Missouri submitted an administratively and

technically complete Title V Operating Permit Program on January 13,

1995. The EPA deemed the program submittal complete on March 2, 1995.

At EPA's request, the State provided supplemental program information

on August 14, 1995; September 19, 1995; and October 16, 1995.

The program submittal includes a legal opinion from the Attorney

General of Missouri stating that the laws of the State provide adequate

legal authority to carry out all aspects of the program, and a

description of how the state intends to implement the program. The

submittal additionally contains evidence of proper adoption of the

program regulations, permit application forms, a data management

system, and a permit fee demonstration.

2. Program Description

The Governor's letter states that the entire geography of Missouri

will be covered by this program. There are no Indian tribal lands in

Missouri. The letter also states that MDNR will be the official

permitting authority responsible for implementation of the program.

Finally, the state requested approval and delegation of authority to

implement section 112(l) of the Act.

In addition to the state's part 70 permit rules, the state has

established a State Implementation Plan (SIP) based permit system for

creating Federally enforceable limitations, called the intermediate

program. This permit mechanism will allow qualifying sources to avoid

having to obtain a part

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70 operating permit. The EPA published a direct final approval of this

program in the Federal Register on September 25, 1995 (60 FR 49340).

Finally, Missouri will issue a third class of permit to all other air

emission sources that meet or exceed the de minimis levels, yet fall

below the major source threshold. This third class of source will

require a basic permit. The basic operating permit program is not a

Federal program and has not been submitted to EPA for approval.

The state has been collecting emission fees for two years, which

have been used for ``ramp-up'' activities, including the hiring of

additional staff. The state emissions fee is currently set at $25.70

per ton, which may be adjusted by the Missouri Air Conservation

Commission through an administrative revision of rule 10 CSR 10-6.110.

The state provided a resource demonstration, discussed later, to

justify deviating from the presumptive minimum of $25 per ton, Consumer

Price Index (CPI) adjusted. The state is also authorized under its

statute to collect fees for non-Title V program activities.

The program submittal also contains information on the

organizational structure and function of the components of the air

program, including the regional and local offices which are available

to assist in implementation of the program.

3. Regulations and Program Implementation

The Missouri program, including the core operating permit

regulations, 10-CSR 6.065 (Division 10, Chapter 6, MDNR) substantially

meets the minimum requirements for interim approval as they are denoted

in 40 CFR part 70.4(d)(3). These requirements pertain to: (1) Adequate

fees, (2) applicable requirements, (3) fixed terms, (4) public

participation, (5) EPA and affected state review, (6) permit issuance,

(7) enforcement, (8) operational flexibility, (9) streamlined

procedures, (10) permit application, and (11) alternative scenarios.

However, Missouri must make the following program revisions for

full approval: (1) Revise its definitions rule, 10 CSR 10-6.020 to: (a)

revise (2)(I)7 to update a reference to the Standard Industrial

Classification Manual, and (b) revise (3)(B), Table 2--List of Named

Installations, to make it consistent with the list in the definition of

major source in 70.2; (2) revise rule 10 CSR 10-6.065, Operating

Permits by: (a) revising (1)(D)2 to clarify the meaning of ``fugitive

air pollutant'' as it relates to part 70 installations; (b) revise

(3)(D) to clarify part 70 applicability with respect to emissions from

exempt installations and emission units; (c) revise (6)(C)1.C.(II)(b)

to clarify the retention of record requirements in permits, consistent

with 70.6(a)(3); (d) revise (6)(C)1.G.(I) to clarify the general

requirements for permit compliance and noncompliance, consistent with

70.6(a)(6); (e) revise (6)(C)4.A. to correct a citation error and to

clarify that the requirement for EPA and affected state review applies

to general permits, consistent with 70.6(d)(1); (f) revise

(6)(C)7.B.(IV) to make the emergency provision notice consistent with

70.6(g)(3); (g) revise (6)(C)8, operational flexibility provisions, to

clarify the term ``emissions allowable under the permit''; (h) revise

(6)(E)5.B.(I), minor permit modification criteria, to be consistent

with 70.7(e)(2)(I)(A)(3); (i) revise (6)(E)5.B.(I) to add a paragraph

(b) to incorporate the economic incentive provisions consistent with

70.7(e)(2)(I)(B); (j) revise (6)(E)5.C.(I)(b) to correct the threshold

for group processing of minor permit modifications to be consistent

with 70.7(e)(2)(I)(B); and (k) revise (6)(E)5.D.(II)(a), significant

permit modification procedures, to be consistent with 70.4(b)(2) and

70.5(c), and make minor citation corrections to rules (6)(B)3.I.(IV),

(6)(E)5.B.(II)(a), (6)(E)5.C.(V), and (6)(E)6.C. A detailed discussion

of the necessary rule revisions is included in the TSD, and in the

docket for this rulemaking. In addition, the rule changes proposed by

Missouri to meet the requirements noted above are included in the

docket.

Missouri has the authority to issue a variance from state

requirements under section 643.110 of the state statutes. This

provision was not included by the state in its operating permit program

submittal, and EPA regards this provision as wholly external to the

program submitted for approval under part 70, and consequently is

proposing to take no action on this provision of state law. The EPA has

no authority to approve provisions of state law, such as the variance

provision referred to, which are inconsistent with the Act. The EPA

does not recognize the ability of a permitting authority to grant

relief from the duty to obtain or 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 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.''

4. Fee Demonstration

The state provided a detailed fee demonstration because the

emissions fee, $25.70 per ton (not adjusted), is below the presumptive

minimum of $25 plus CPI. The fee demonstration included a detailed

analysis of projected hourly program requirements and costs for each of

the next four years. An emission inventory of Title V sources for two

preceding years (1993 and 1994) and emissions fees collected was also

provided. Missouri describes a cash receipts system that identifies

Title V fee receipts, a time accounting system that tracks Title V

program labor costs, and an accounts payable system that tracks Title V

program expenses.

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

a. Authority and/or commitments for section 112 implementation.

Missouri has demonstrated in its program submittal adequate legal

authority to implement and enforce all section 112 requirements through

the Title V permit. This legal authority is contained in Missouri's

enabling legislation and in regulatory provisions defining ``applicable

requirements,'' and states that the permit must incorporate all

applicable requirements. EPA has determined that this legal authority

is sufficient to allow Missouri to issue permits that ensure compliance

with all section 112 requirements. The EPA is interpreting the above

legal authority to mean that Missouri is able to carry out all section

112 activities. For further rationale on this interpretation, please

refer to the TSD accompanying this rulemaking and the April 13, 1993,

guidance memorandum titled ``Title V Program Approval Criteria for

Section 112 Activities,'' signed by John Seitz.

b. Section 112(g) Case-by-Case Maximum Achievable Control

Technology (MACT) For Modified/Constructed and Reconstructed Major

Toxic Sources.

The EPA issued an interpretive notice on February 14, 1995 (60 FR

8333), which outlines EPA's revised interpretation of 112(g)

applicability.

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The notice postpones the effective date of 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) 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 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), Missouri must have a

Federally enforceable mechanism for implementing section 112(g) during

the period between promulgation of the Federal section 112(g) rule and

adoption of implementing Federal regulations.

The EPA is aware that Missouri lacks a program designed

specifically to implement section 112(g). However, Missouri does have a

program for review of new and modified hazardous air pollutant sources

that can serve as an adequate implementation vehicle during the

transition period, because it would allow Missouri to select control

measures that would meet MACT, as defined in section 112, and

incorporate these measures into a Federally enforceable preconstruction

permit.

The EPA is proposing to approve Missouri's preconstruction

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

section 112(l) generally provides authority for approval of state 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 purposes of any other provision under the Act (e.g.,

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

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

requirements of the rule until state regulations are adopted. The

duration of this approval is limited to 18 months following

promulgation by EPA of the 112(g) rule to provide adequate time for the

state to adopt regulations consistent with the Federal requirements.

c. Section 112(l)--State Air Toxics Programs.

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

section 112(l)(5) approval requirements for delegation of section 112

standards as promulgated by EPA as they apply to part 70 sources.

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.

Missouri has demonstrated that it meets these requirements. Therefore,

EPA is proposing to grant approval under section 112(l)(5) and 40 CFR

part 63.91 to Missouri for its program mechanism for receiving

delegation of all existing and future section 112(d) standards for both

part 70 and non-part 70 sources, and section 112 infrastructure

programs, that are unchanged from Federal rules as promulgated.

Missouri has informed EPA that it intends to accept delegation of

section 112 standards through adoption by reference. In addition, EPA

is also proposing delegation of all existing standards and programs

under 40 CFR parts 61 and 63 for part 70 and non-part 70 sources.

d. Title IV/Acid Rain. The legal requirements for approval under

the Title V operating permits program for a Title IV program were cited

in EPA guidance distributed on May 21, 1993, titled ``Title V-Title IV

Interface Guidance for States.'' Missouri has met the criteria of this

guidance and has adopted by reference acid rain rules at 40 CFR 72.

B. Options for Approval/Disapproval and Implications

1. The EPA is proposing to grant interim approval for two years to

the operating permits program submitted by the state of Missouri. In

order to receive full approval, the state must adopt and submit to the

EPA the rule changes identified above within 18 months of receiving

final interim approval. Specifically, the state must amend rules 10 CSR

10-6.020, Definitions, and 10 CSR 10-6.065, Operating permits, for

consistency with part 70.

2. Program for Straight Delegation of Section 112 Standards.

As discussed above, EPA is proposing to grant approval under

section 112(l)(5) and 40 CFR part 63.91 to Missouri for its program

mechanism for receiving delegation of all existing and future section

112(d) standards for both part 70 and non-part 70 sources, and

infrastructure programs under section 112 that are unchanged from

Federal rules as promulgated. In addition, EPA proposes to delegate

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

non-part 70 sources.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

interim approval. Copies of the state's submittal and other information

relied upon for the proposed approval are contained in a docket

maintained at EPA Regional Office. The docket is an organized and

complete file of all the information submitted to, or otherwise

considered by, EPA in the development of this proposed interim

approval. The principal purposes of the docket are:

1. To allow interested parties a means to identify and locate

documents for participating in the rulemaking process, and

2. To serve as the record in case of judicial review. The EPA will

consider any comments received by Janaury 16, 1996.

B. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

C. Regulatory Flexibility Act

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

new requirements, but simply address operating permits programs

submitted to satisfy the requirements of 40 CFR part 70. Because this

action does not impose any new requirements, it does not have a

significant impact on a substantial number of small entities.

D. Unfunded Mandates

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

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

1995, EPA must undertake various actions in association with proposed

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

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

state, local, or tribal governments in the aggregate.

Through submission of this state operating permit program the state

has elected to adopt the program provided for under Title V of the CAA.

These rules may bind the state government to perform certain actions

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

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

impose new requirements, sources are already subject to these

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

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

this action. The EPA has

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also determined that this proposed action does not include a 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.

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. sections 7401-7671q.

Dated: December 6, 1995.

Dennis Grams,

Regional Administrator.

[FR Doc. 95-30554 Filed 12-14-95; 8:45 am]

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