Clean Air Act Proposed Interim Approval, or in the Alternative Proposed Disapproval, of Operating Permits Program; State of Montana

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[MT-001; FRL-5155-3]

Clean Air Act Proposed Interim Approval, or in the Alternative

Proposed Disapproval, of Operating Permits Program; State of Montana

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 Montana for the purpose of complying

with Federal requirements for an approvable State program to issue

operating permits to all major stationary sources, and to certain other

sources. In the alternative, EPA proposes disapproval of the Montana

Operating Permits Program if the corrective actions necessary for final

interim PROGRAM approval are not completed and submitted to EPA prior

to the statutory deadline.

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

March 16, 1995.

ADDRESSES: Comments should be addressed to Laura Farris at the Region 8

address. Copies of the State's submittal and other supporting

information used in developing the proposed rule are available for

inspection during normal business hours at the following location: U.S.

Environmental Protection Agency, Region 8, 999 18th Street, suite 500,

Denver, Colorado 80202.

FOR FURTHER INFORMATION CONTACT: Laura Farris, 8ART-AP, U.S.

Environmental Protection Agency, Region 8, Air Programs Branch, 999

18th Street, suite 500, Denver, Colorado 80202, (303) 294-7539.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the 1990 Clean Air Act Amendments

(sections 501-507 of the Clean Air Act (``the Act'')), EPA has

promulgated rules which define the minimum elements of an approvable

State operating permits program and the corresponding standards and

procedures by which the 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 (part 70). Title V requires States to develop, and submit

to EPA, programs for issuing these operating permits to all

[[Page 8336]] 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 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.

B. Federal Oversight and Sanctions

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

extend for two years following the effective date of final interim

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

period, the State of Montana would be protected from sanctions, and EPA

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

permits program for the State of Montana. 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 the effective date of interim approval, as

does the 3-year time period for processing the initial permit

applications.

Following final interim PROGRAM approval, if the State of Montana

failed to submit a complete corrective program for full approval by the

date 6 months before expiration of the interim approval, EPA would

start an 18-month clock for mandatory sanctions. If the State of

Montana then failed to submit a 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 Act,

which would remain in effect until EPA determined that the State of

Montana had corrected the deficiency by submitting a complete

corrective program. Moreover, if the Administrator found a lack of good

faith on the part of the State of Montana, both sanctions under section

179(b) would apply after the expiration of the 18-month period until

the Administrator determined that the State of Montana had come into

compliance. In any case, if, six months after application of the first

sanction, the State of Montana still had not submitted a corrective

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

If, following final interim PROGRAM approval, EPA were to

disapprove the State'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 the State of Montana had submitted a revised program and EPA

had determined that it corrected the deficiencies that prompted the

disapproval. Moreover, if the Administrator found a lack of good faith

on the part of the State of Montana, both sanctions under section

179(b) would apply after the expiration of the 18-month period until

the Administrator determined that the State of Montana had come into

compliance. In all cases, if, six months after EPA applied the first

sanction, the State of Montana had not submitted a revised program that

EPA had determined corrected the deficiencies that prompted

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 a State 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 State program by the expiration of an interim approval

and that expiration occurs after November 15, 1995, EPA must

promulgate, administer and enforce a Federal permits program for that

State upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials

The Governor of Montana submitted an administratively complete

title V Operating Permit Program (PROGRAM) for the State of Montana on

March 29, 1994. EPA deemed the PROGRAM administratively complete in a

letter to the Governor dated May 12, 1994. The PROGRAM submittal

includes a legal opinion from the Attorney General of Montana 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. Regulations and Program Implementation

The Montana PROGRAM, including the operating permit regulation

(Sub-Chapter 20, Secs. 16.8.2001 through 16.8.2025, inclusive, of the

Administrative Rules of Montana), substantially meets the requirements

of 40 CFR parts 70.2 and 70.3 with respect to applicability; parts

70.4, 70.5, and 70.6 with respect to permit content including

operational flexibility; part 70.5 with respect to complete application

forms and criteria which define insignificant activities; part 70.7

with respect to public participation and minor permit modifications;

and part 70.11 with respect to requirements for enforcement authority.

Section 16.8.2006(3) of Sub-Chapter 20 provides, in part, that

``Insignificant emission units need not be addressed in an application

for an air quality operating permit, except that the application must

include a list of such insignificant emission units and emissions from

insignificant emission units must be included in emission inventories

and are subject to assessment of permit fees.'' The term

``insignificant emissions unit'' is defined in Sec. 16.8.2002(22)(a) of

Sub-Chapter 20 as ``any activity or emissions unit located within a

source that (i) has a potential to emit less than 15 tons per year of

any pollutant, other than a hazardous air pollutant listed pursuant to

sec. 7412(b) of the FCAA or lead; (ii) has a potential to emit of less

than 500 pounds per year of lead; (iii) does not have a potential to

emit hazardous air pollutants listed pursuant to sec. 7412(b) in any

amount; and (iv) is not regulated by an applicable requirement.'' The

15 ton per year threshold is considered by EPA to be a PROGRAM

deficiency that must be addressed prior to full PROGRAM approval and is

discussed in more detail below.

Section 70.6(a)(3)(iii)(B) of EPA's operating permit regulations

provides that each permit shall require ``prompt reporting of

deviations from permit requirements, including those attributable to

upset conditions as defined in the permit, the probable cause of such

deviations, and any corrective actions or preventive measures taken.''

Under Sec. 16.8.2010(3)(c) of Sub-Chapter 20 of Montana's regulations,

reporting is considered ``prompt'' if made at least every six months as

part of the routine reporting requirements and, if applicable, in

accordance with the malfunction reporting requirements under

Sec. 16.8.705 of Subchapter 7, unless [[Page 8337]] otherwise specified

in an applicable requirement. However, EPA's position is that reporting

only once every six months is not sufficiently ``prompt'' to allow for

protection of public health and safety and to provide a forewarning of

potential problems. Usually, reporting within two to ten days should be

sufficient for these purposes, although with more serious permit

deviations, earlier reporting may be necessary. Only for sources with a

low level of excess emissions, would it be appropriate to allow more

than ten days to elapse before reporting. EPA may veto state permits

that do not require appropriately prompt reporting.

Montana has the authority to issue a variance from emission

limitations. The Clean Air Act of Montana, Section 75-2-212, Montana

Code Annotated (MCA), provides that the State may grant a variance if

``(a) the emissions occurring or proposed to occur do not constitute a

danger to public health or safety; and (b) compliance with the rules

from which exemption is sought would produce hardship without equal or

greater benefits to the public.'' EPA regards Montana's variance

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 comply with a

Federally enforceable part 70 permit, except where such relief is

granted through procedures allowed by part 70. If the State uses its

variance provision strictly to establish a compliance schedule for a

non-complying source that will be incorporated into a title V permit,

then EPA would consider this an acceptable use of a variance provision.

However, the routine process for establishing a compliance schedule is

through appropriate enforcement action. The 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.

Comments noting deficiencies in the Montana PROGRAM were sent to

the State in a letter dated October 3, 1994. The deficiencies were

segregated into those that require corrective action prior to interim

PROGRAM approval, and those that require corrective action prior to

full PROGRAM approval. In a letter dated October 20, 1994 the State

committed to address the deficiencies that require corrective action

prior to interim PROGRAM approval by January 20, 1995.

Areas in which the Montana PROGRAM is deficient and require

corrective action prior to final interim PROGRAM approval are as

follows: (1) Section 16.8.2004(3) of Sub-Chapter 20 allows the State to

exempt sources from the requirement to obtain an air quality operating

permit by establishing Federally enforceable limitations which limit

the source's potential to emit. However, the State's rules do not

describe the process which will be used to create these limits. Prior

to interim PROGRAM approval, the State must clarify how Federally

enforceable limits will be created to limit a source's potential to

emit, and verify its authority to create such limits. If the State

plans to create Federally enforceable limits through title V operating

permits, such permits must go through all of the title V public

participation requirements, including affected State review, 45-day EPA

review period and EPA veto authority. (2) Section 16.8.2008(2)(j) of

Sub-Chapter 20 states that the State's decision regarding issuance,

renewal, revision, denial, revocation, reissuance, or termination of a

permit is not effective until 30 days have elapsed from the date of the

decision, and that the decision may be appealed to the board by filing

a request for hearing within 30 days after the date of the decision.

EPA interprets this language to mean that the 30-day period for making

appeals to the board would occur after EPA's 45-day review/approval

period for the proposed permit. If this is the case, any permits

appealed to the board that are changed must be submitted to EPA for

additional review. Prior to interim PROGRAM approval, the State must

clarify whether the appeal process on the State's decisions regarding

permit issuance, renewal, revision, denial, revocation, reissuance, or

termination occurs before or after EPA's 45-day review/approval period.

If the appeal process follows EPA's review/approval period, then

language must be added to the State's permitting regulation to ensure

that permits that are changed after appeal to the board are submitted

to EPA for additional review. (3) Section 16.8.2008(2)(a) allows the

State to terminate, or revoke and reissue, permits for continuing and

substantial violations, but does not provide the full authority under

section 502(b)(5)(D) of the Act which requires that state permit

programs have authority to ``terminate, modify, revoke and reissue

permits for cause.'' Prior to interim PROGRAM approval, the State must

clarify that it has the authority to ``terminate, modify, revoke and

reissue permits for cause'' pursuant to section 502(b)(5)(D) of the

Act. (4) Section 16.8.2021(1)(c) of Sub-Chapter 20 states that a

significant modification includes ``every significant relaxation of

permit reporting or recordkeeping terms or conditions.'' Section

70.7(e)(4)(i) of the Federal permitting regulation requires that any

relaxation of reporting or recordkeeping permit terms be processed as a

significant modification. Prior to interim PROGRAM approval, the State

must provide an Attorney General's opinion that the language in

Sec. 16.8.2021(1)(c) of Sub-Chapter 20 regarding significant

modifications will be interpreted as ``every relaxation of reporting or

recordkeeping permit terms'', and prior to full PROGRAM approval, the

word ``significant'' must be removed from this regulatory language.

Areas in which the Montana PROGRAM is deficient and require

corrective action prior to full PROGRAM approval are as follows: (1)

Section 16.8.2002(1)(d) of Sub-Chapter 20 is part of the definition of

administrative permit amendment and allows for the ``department's

discretion'' in determining whether or not a change in monitoring or

reporting requirements would be as stringent as current monitoring or

reporting requirements. Changes in monitoring or reporting requirements

must be processed through either the minor permit modification

procedures or the significant permit modification procedures, unless

the change requires more frequent monitoring or reporting, in which

case it can be processed through the administrative permit amendment

procedures. This portion of Montana's definition does not meet the

criteria of an administrative permit amendment listed in

Sec. 70.7(d)(1)(iii) of the Federal permitting regulation. Prior to

full PROGRAM approval, the State must delete Sec. 16.8.2002(1)(d) of

Sub-Chapter 20, which allows for the ``department's discretion'' in

determining whether or not a change in monitoring or reporting

requirements would be as stringent as current monitoring or reporting

requirements.

(2) Section 16.8.2002(1)(f) of Sub-Chapter 20 is part of the

definition of administrative permit amendment and allows the State to

determine if other types of permit changes not listed in the definition

of administrative permit amendment can be incorporated into a permit

through the administrative permit amendment process. Section

70.7(d)(1)(vi) of the Federal permitting [[Page 8338]] regulation

requires that such determinations be made by the Administrator of EPA

and be similar to those changes listed in Sec. 70.7(d)(1)(i)-(iv) of

the Federal permitting regulation. This provision must be changed prior

to full PROGRAM approval to allow the Administrator of EPA (or EPA and

the State) to determine if changes not included in the definition of

administrative permit amendment can be processed through the

administrative permit amendment process.

(3) The definition of ``insignificant emissions unit'' in

Sec. 16.8.2002(22)(a) of Sub-Chapter 20 includes an emission threshold

of 15 tons per year of any pollutant other than a hazardous air

pollutant. EPA does not consider this to be a reasonable level from

which to exempt emissions units from title V operating permit

requirements. For other State title V programs, EPA has proposed to

accept, as sufficient for full approval, emission levels for

insignificant activities of 2 tons per year of regulated air pollutants

and the lesser of 1000 pounds per year, section 112(g) de minimis

levels, or other title I significant modification levels for HAPs and

other toxics (40 CFR 52.21(b)(23)(i)). EPA believes that these levels

are sufficiently below applicability thresholds for most applicable

requirements to assure that no unit potentially subject to an

applicable requirement is left off a part 70 application and are

consistent with current permitting thresholds for the State under

consideration here. EPA is requesting comment on the appropriateness of

these emission levels for determining insignificant activities in this

State. This request for comment is not intended to restrict the ability

of the State to propose and EPA to approve other emission levels if the

State demonstrates that such alternative emission levels are

insignificant compared to the level of emissions from and types of

units that are permitted or subject to applicable requirements. Prior

to full PROGRAM approval, the State must lower the emissions cap for

defining ``insignificant emissions units'' to assure they will not

encompass activities that trigger applicable requirements. If the State

defines insignificant activity levels greater than those suggested, a

demonstration must be made to show why such levels are, in fact,

insignificant.

(4) Section 16.8.2002(24)(ii) of Sub-chapter 20 defines ``non-

Federally enforceable requirement'' to include any term contained in a

preconstruction permit issued under Sub-Chapters 9, 11, 17, or 18 that

is not Federally enforceable. However, everything contained in a

preconstruction permit issued under these Sub-Chapters (which currently

are, or soon will be, included in the State's SIP) is considered to be

Federally enforceable. Prior to full PROGRAM approval this language

must be revised or deleted.

(5) Section 16.8.2008 of Sub-Chapter 20 which lists the permit

content requirements does not require a severability clause consistent

with Sec. 70.6(a)(5) of the Federal permitting regulation. Prior to

full PROGRAM approval, the State must include a severability clause in

Sub-Chapter 20 consistent with Sec. 70.6(a)(5) of the Federal

permitting regulation.

(6) Section IX.C.2 of the checklist that was part of the PROGRAM

submittal regarding the implementation of the enhanced monitoring

requirements of section 114(a)(3) of the Act states that there are no

impediments to using any monitoring data to determine compliance and

for direct enforcement. However, the State has incorporated by

reference the Federal new source performance standards (NSPS) and

national emissions standards for HAPs (NESHAPs) in 40 CFR parts 60 and

61 into its SIP-approved regulations, which provide that compliance can

be determined only by performance tests (see 40 CFR 60.11(a) and 40 CFR

61.12(a)).

Prior to full PROGRAM approval, the State must provide an Attorney

General's opinion verifying the State's authority to use any monitoring

data to determine compliance and for direct enforcement. If the State

does not have such authority, then the State's SIP-approved regulations

must be revised prior to full PROGRAM approval to provide authority to

use any monitoring data to determine compliance and for direct

enforcement.

(7) The Attorney General's Opinion regarding the State's authority

to terminate permits is unclear. MCA 75-2-211(1) and 217(1) refer to

``issuance, modification, suspension, revocation, and renewal'' of

permits, but not ``termination.'' Prior to full PROGRAM approval, the

State must provide an Attorney General's interpretation that Montana's

statutory authority extends to ``terminating'' permits.

(8) The PROGRAM submittal contained a letter to Douglas M. Skie

dated February 28, 1994 certifying the State's authority to implement

section 112 of the Act. The letter discusses the State's authority to

require permit applications from sources subject to section 112(j) of

the Act, but does not address the State's ability to make case-by-case

MACT determinations. Prior to full PROGRAM approval, the State must

certify its ability to make case-by-case MACT determinations pursuant

to section 112(j) of the Act.

(9) The State's February 28, 1994 letter to EPA also discusses the

State's authority to implement section 112(r) of the Act, but does not

address the State's ability to require annual certifications from part

70 sources as to whether their risk management plans (RMPs) are being

properly implemented, or provide a compliance schedule for sources that

fail to submit the required RMP. Prior to full PROGRAM approval, the

State must certify its ability to require annual certifications from

part 70 sources regarding proper implementation of their RMPs and to

provide a compliance schedule for sources that fail to submit the

required RMP.

Refer to the Technical Support Document accompanying this

rulemaking for a detailed explanation of each comment and the

corrective actions required of the State.

3. Permit Fee Demonstration

The Montana PROGRAM includes a fee structure that collects in the

aggregate fees that are below the presumptive minimum set in part 70.

Therefore, it was necessary for the State to include a permit fee

demonstration in its PROGRAM submittal to demonstrate that the title V

fee structure would collect sufficient fees to cover the reasonable

direct and indirect costs of developing and administering the PROGRAM.

The permit fee demonstration included a workload analysis which

estimated the annual cost of running the PROGRAM to be $585,130 for

fiscal year 1994, increasing to $849,705 for fiscal year 1995. The fee

structure for fiscal year 1994, based on the previous year's emission

inventory, included a fee of $8.55 per ton for particulates, sulfur

dioxide and lead; $2.14 per ton for nitrogen oxides and volatile

organic compounds; with a minimum fee of $250 per source. These fees

are projected to increase to $11.75 and $2.94 per ton, respectively,

for fiscal year 1995, and the State anticipates adding a fee for HAPs

in the future. After careful review, the State has determined that

these fees would support the Montana PROGRAM costs as required by

section 70.9(a) of the Federal operating permitting regulation. Upon

review of the State's permit fee demonstration, the EPA noted the

following concerns:

(1) Although the State has the authority to assess and collect

annual permit fees in an amount sufficient to cover all reasonable

direct and indirect costs of the PROGRAM, the State Legislature must

appropriate the money [[Page 8339]] to operate the PROGRAM every

biennium. If an adequate appropriation is not made, and the State is

not able to fund all the costs of the PROGRAM, the EPA would be

required to disapprove or withdraw the part 70 program, impose

sanctions, and implement a Federal permitting program.

(2) EPA was unable to determine if sufficient fees will be

available to fund the PROGRAM due to deficiencies in the State's Permit

Fee Demonstration. The State agreed to address these deficiencies in a

letter to EPA dated October 20, 1994 and submit a revised Permit Fee

Demonstration to EPA prior to final interim PROGRAM approval.

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

a. Authority and/or Commitments for Section 112 Implementation

Montana has demonstrated in its PROGRAM submittal adequate legal

authority to implement and enforce all section 112 requirements, with

the exception of the deficiencies noted above, through the title V

permit. This legal authority is contained in Montana's enabling

legislation and in regulatory provisions defining ``applicable

requirements'' and stating that the permit must incorporate all

applicable requirements. EPA has determined that this legal authority

is sufficient to allow Montana to issue permits that assure compliance

with all section 112 requirements, and to carry out all section 112

activities, contingent upon the State completing the above noted

corrective actions related to section 112.

For further rationale on this interpretation, please refer to the

Technical Support Document 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. Implementation of 112(g) Upon Program Approval

As a condition of approval of the part 70 PROGRAM, Montana is

required to implement section 112(g) of the Act from the effective date

of the part 70 PROGRAM. Imposition of case-by-case determinations of

maximum achievable control technology (MACT) or offsets under section

112(g) will require the use of a mechanism for establishing Federally

enforceable restrictions on a source-specific basis. The EPA is

proposing to approve Montana's preconstruction permitting program found

in Sub-Chapter 11, Secs. 16.8.1101 through 16.8.1120, under the

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

section 112(g) during the transition period between title V approval

and adoption of a State rule implementing EPA's section 112(g)

regulations. EPA believes this approval is necessary so that Montana

has a mechanism in place to establish Federally enforceable

restrictions for section 112(g) purposes from the date of part 70

approval. Section 112(l) provides statutory authority for approval for

the use of State air programs to implement section 112(g). 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. 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. If Montana does not wish to implement section

112(g) through its preconstruction permit program and can demonstrate

that an alternative means of implementing section 112(g) exists, the

EPA may, in the final action approving Montana's PROGRAM, approve the

alternative instead. To the extent Montana does not have the authority

to regulate HAPs through existing State law, the State may disallow new

construction or modifications during the transition period.

This approval is for an interim period only, until such time as the

State is able to adopt regulations consistent with any regulations

promulgated by EPA to implement section 112(g). Accordingly, EPA is

proposing to limit the duration of this approval to a reasonable time

following promulgation of section 112(g) regulations so that Montana,

acting expeditiously, will be able to adopt regulations consistent with

the section 112(g) regulations. The EPA is proposing here to limit the

duration of this approval to 12 months following promulgation by EPA of

section 112(g) regulations. Comment is solicited on whether 12 months

is an appropriate period considering Montana's procedures for adoption

of Federal regulations.

c. Program for Straight Delegation of Section 112 Standards

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

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

of section 112 General Provisions Subpart A and standards as

promulgated by EPA as they apply to sources covered by the part 70

Program, as well as non-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. Therefore, the EPA is also

proposing to grant approval under section 112(l)(5) and 40 CFR 63.91 of

the State's program for receiving delegation of section 112 standards

that are unchanged from the Federal standards as promulgated. Montana

has informed EPA that it intends to accept delegation of section 112

standards through incorporation by reference or case-by-case

rulemaking. This program applies to both existing and future standards.

The radionuclide NESHAP is a section 112 regulation and therefore,

also an applicable requirement under the State PROGRAM. Sources which

are currently defined as part 70 sources and emit radionuclides are

subject to Federal radionuclide standards. Additionally, sources which

are not currently part 70 sources may be defined as major sources under

forthcoming Federal radionuclide regulations. The EPA will work with

the State in the development of its radionuclide program to ensure that

permits are issued in a timely manner.

d. Program for Implementing Title IV of the Act

Montana's PROGRAM contains adequate authority to issue permits

which reflect the requirements of title IV of the Act, and commits to

adopt the rules and requirements promulgated by EPA to implement an

acid rain program through the title V permit.

B. Options for Approval/Disapproval and Implications

The EPA is proposing to grant interim approval to the operating

permits program submitted by the State of Montana on March 29, 1994. If

promulgated, the State must complete the following corrective actions,

as discussed above, to receive final interim PROGRAM approval: (1) The

State must clarify how the Federally enforceable limits allowed under

Sec. 16.8.2004(3) of Sub-Chapter 20 will be created to limit a source's

potential to emit, and verify its authority to create such limits. If

the State plans to create these Federally enforceable limits through

the title V PROGRAM, such permits must go through all of the title V

public participation requirements, including affected State review, 45-

day EPA review period and EPA veto authority; (2) The State must

clarify whether the appeal process in Sec. 16.8.2008(2)(j) of Sub-

Chapter 20 on the State's decisions regarding permit issuance, renewal,

revision, denial, revocation, reissuance, or termination occurs before

or after EPA's 45-day review/approval period. If the appeal process

follows EPA's review/approval period, then additional language must be

added to the State's [[Page 8340]] permitting regulation to ensure that

permits that are changed after appeal to the board are submitted to EPA

for additional review; (3) The State must clarify that it has the

authority to ``terminate, modify, revoke and reissue permits for

cause'' pursuant to section 502(b)(5)(D) of the Act; (4) The State must

provide an Attorney General's opinion that the language in

Sec. 16.8.2021(1)(c) of Sub-Chapter 20 regarding significant

modifications will be interpreted as ``every relaxation of reporting or

recordkeeping permit terms.''

The State must complete the following corrective actions, as

discussed above, to receive full PROGRAM approval: (1) The word

``significant'' must be removed from the language in

Sec. 16.8.2021(1)(c) of Sub-Chapter 20; (2) The State must delete

Sec. 16.8.2002(1)(d) of Sub-Chapter 20 that allows for the

``department's discretion'' in determining whether or not a change in

monitoring or reporting requirements would be as stringent as current

monitoring or reporting requirements; (3) Section 16.8.2002(1)(f) of

Sub-Chapter 20 must be changed to allow the Administrator of EPA (or

EPA and the State) to determine if changes not included in the

definition of ``administrative permit amendment'' can be processed

through the administrative permit amendment process; (4) The State must

lower the emissions cap for defining ``insignificant emissions units''

in Sec. 16.8.2002(22)(a) of Sub-Chapter 20 to assure they will not

encompass activities that trigger applicable requirements. If the State

defines insignificant activity levels greater than those suggested, a

demonstration must be made to show why such levels are, in fact,

insignificant; (5) The language in Sec. 16.8.2002(24)(ii) of Sub-

Chapter 20 which defines ``non-Federally enforceable requirement'' must

be revised or deleted to avoid the implication that terms contained in

a preconstruction permit issued under Sub-Chapters 9, 11, 17, or 18 are

not Federally enforceable; (6) The State must include a severability

clause in Sec. 16.8.2008 of Sub-Chapter 20 consistent with

Sec. 70.6(a)(5) of the Federal permitting regulation; (7) The State

must provide an Attorney General's opinion verifying the State's

authority to use any monitoring data to determine compliance and for

direct enforcement. If the State does not have such authority, then the

State's SIP-approved regulations must be revised to provide authority

to use any monitoring data to determine compliance and for direct

enforcement; (8) The State must provide an Attorney General's

interpretation that Montana's statutory authority under MCA 75-2-211(1)

and 217(1) extends to ``terminating'' permits; (9) The State must

certify its ability to make case-by-case MACT determinations for

sources subject to section 112(j) of the Act; (10) The State must

certify its ability to require annual certifications from part 70

sources regarding proper implementation of their section 112(r) RMPs

and to provide a compliance schedule for sources that fail to submit

the required RMP.

Evidence of these corrective actions for full PROGRAM approval must

be submitted to EPA within 18 months of EPA's interim approval of the

Montana PROGRAM.

The scope of Montana's part 70 PROGRAM that EPA proposes to approve

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

PROGRAM) within the State, except the following: any sources of air

pollution located in ``Indian Country,'' as defined in 18 U.S.C. 1151,

including the Northern Cheyenne, Rocky Boys, Blackfeet, Crow, Flathead,

Fort Belknap, and Fort Peck Indian Reservations, or any other 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

43955, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 21, 1993).

In proposing not to extend the scope of Montana's part 70 PROGRAM

to sources located in ``Indian Country,'' EPA is not making a

determination that the State either has adequate jurisdiction or lacks

jurisdiction over such sources. Should the State of Montana choose to

seek program approval within ``Indian Country,'' it may do so without

prejudice. Before EPA would approve the State's part 70 PROGRAM for any

portion of ``Indian Country,'' EPA would have to be satisfied that the

State has authority, either pursuant to explicit Congressional

authorization or applicable principles of Federal Indian law, to

enforce its laws against existing and potential pollution sources

within any geographical area for which it seeks program approval, that

such approval would constitute sound administrative practice, and that

those sources are not subject to the jurisdiction of any Indian Tribe.

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

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

is protected from sanctions for failure to have a program, and EPA is

not obligated to promulgate a Federal permits program in the State.

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.

The EPA is proposing to disapprove in the alternative the Montana

PROGRAM if the specified corrective actions for final interim PROGRAM

approval are not completed and submitted to EPA prior to EPA's

statutory deadline for acting on Montana's title V submittal. If

promulgated, this disapproval would constitute a disapproval under

section 502(d) of the Act (see generally 57 FR 32253-54). As provided

under section 502(d)(1) of the Act, Montana would have up to 180 days

from the date of EPA's notification of disapproval to the Governor of

Montana to revise and resubmit the PROGRAM.

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

section 112(l)(5) requirements for approval of a program 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. Therefore, the EPA is also proposing to grant approval under

section 112(l)(5) of the Act and 40 CFR 63.91 of the State's program

for receiving delegation of section 112 standards that are unchanged

from Federal standards as promulgated. This program for delegations

applies to sources covered by the part 70 program as well as 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 interim approval are contained in a docket

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 [[Page 8341]] of this proposed

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. The EPA will

consider any comments received by March 16, 1995.

B. Executive Order 12866

The Office of Management and Budget has exempted this 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.

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: February 3, 1995.

Jack W. McGraw,

Acting Regional Administrator.

[FR Doc. 95-3659 Filed 2-13-95; 8:45 am]

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