Clean Air Act Final Interim Approval of the Operating Permits Program; Wisconsin

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[WI001; FRL-5164-9]

Clean Air Act Final Interim Approval of the Operating Permits

Program; Wisconsin

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: The EPA is promulgating interim approval of the Operating

Permits Program submitted by the State of Wisconsin 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.

EFFECTIVE DATE: April 5, 1995.

ADDRESSES: Copies of the State's submittal and other supporting

information used in developing the final interim approval are available

for inspection during normal business hours at the following location:

EPA Region 5, Air and Radiation Division (AT-18J), 77 West Jackson

Boulevard, Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Beth Valenziano, Permits and Grants

Section (AT-18J), EPA, 77 West Jackson Boulevard, Chicago, Illinois

60604, (312) 886-2703.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

Title V 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 October 19, 1994, EPA proposed interim approval of the operating

permits program for the State of Wisconsin. See 59 FR 52743. The EPA

received public comment from 7 organizations on the proposal and

compiled a Technical Support Document (TSD) responding to the comments

and briefly describing and clarifying aspects of the operating permits

program. In this notice EPA is taking final action to promulgate

interim approval of the operating permits program for the State of

Wisconsin.

II. Final Action and Implications

A. Analysis of State Submission and Response to Public Comments

The EPA received comments on a total of 14 topics from 7

organizations. The EPA's response to these comments is summarized in

this section. Comments supporting EPA's proposal are not addressed in

this notice; however, EPA's complete response to comments TSD is

available in the official file at the Region 5 address noted in the

ADDRESSES section above.

1. Indian Lands

The EPA proposed that interim approval of Wisconsin's operating

permits program not extend to lands within the exterior boundaries of

reservations of federally recognized Indian Tribes in the State of

Wisconsin. The proposal indicated that the Wisconsin Department of

Natural Resources (WDNR) had not demonstrated the legal authority to

regulate sources on tribal lands. WDNR submitted several comments on

this issue, which are summarized and addressed below.

Comment: ``[W]ho will be responsible for issuance of permits to

sources on Indian reservations prior to promulgation of either a tribal

operation permits program or the federal operation permits program

under 40 CFR Part 71? We are not aware of any tribal programs being

developed or implemented in Wisconsin, and the federal part 71 rules

have not yet been formally proposed. We are concerned about the

apparent lack of any regulatory authority over sources on Indian

reservations until a federal or tribal program is promulgated.''

Response: At this time, EPA is not aware of any facility within the

exterior boundaries of a reservation in the State of Wisconsin that

requires a title V operating permit. Further, the Act

[[Page 12129]] explicitly contemplates that Indian Tribes may develop

and administer their own Clean Air Act programs in the same manner as

States. Section 164(c) delegates to Indian governing bodies the

authority to redesignate lands within the exterior boundaries of

reservations of federally recognized Indian tribes for purposes of the

Act's Prevention of Significant Deterioration of Air Quality (PSD)

program. Section 301(d) of the Act delegates to EPA the authority to

specify the provisions of the Act for which it is appropriate to treat

Indian Tribes in the same manner as States. The EPA has issued proposed

rules that would authorize Tribes to administer approved Act programs

in the same manner as States for virtually all provisions of the Act,

including title V operating permit programs. See 59 FR 43956 (Aug. 25,

1994).

The EPA has spelled out some of the steps it currently takes and

plans to take to protect tribal air quality prior to issuance of final

rules authorizing tribal Act programs and ensuing tribal program

approvals. See, e.g., 59 FR at 43960-43961. The EPA is also developing

rules to be issued within the next few months that would provide for

EPA implementation of title V permit programs on tribal lands in the

interim period before tribal programs are approved.

Comment: ``[T]he State of Wisconsin believes that it has authority

to permit sources within Indian reservations if the source may have a

substantial off-reservation impact * * *. The State has jurisdiction to

enforce its air permitting laws on the basis of common law principles

laid down by the United States Supreme Court. Recent decisions of that

Court have departed from the concept of inherent Indian sovereignty as

a bar to State jurisdiction over Indians and leaned towards reliance on

the principle of federal preemption. Rice v. Rehner, 463 U.S. 713

(1983); see also McClanahan v. Arizona State Tax Commission, 411 U.S.

164 (1973) * * *. Although the concept of tribal sovereignty is given

less emphasis today, it continues to be relevant to a form of

preemption analysis applicable to Indian law, which can be summarized

as follows: State jurisdiction is preempted by the operation of federal

law if it interferes or is incompatible with federal and tribal

interests reflected in federal law, unless the State interests at stake

are sufficient to justify the assertion of State authority. New Mexico

v. Mescalero Apache Tribe, 462 U.S. 324, [ ] 334 (1983). Thus, the

inquiry must be whether federal or Indian interests are interfered with

by enforcement of the state's air permitting laws, and, if so, whether

the State interests at stake are sufficient to justify the assertion of

State authority. In California v. Cabazon Band of Mission Indians, 480

U.S. 202 (1987), the Court discusses the issue of whether State laws

apply to on-reservation conduct of Indians. The Court describes the

appropriate analysis, that being the balancing of state, federal, and

tribal interests and the related notion of tribal sovereignty * * *.

Where a State's interest in applying its law outweighs any competing

federal or Indian interests at stake, and where the State's exercise of

its jurisdiction is not incompatible with congressional goals of

promoting Indian self-government, self-sufficiency and economic

development, states may apply their laws unless such application is

preempted by the law. Cabazon, 480 U.S. at 214-216. In the case of the

title V permitting program, no express federal law preempts State

jurisdiction on Indian reservations. While this could occur with

delegation of state status to the tribes, it has not happened yet.

Furthermore, no Tribe in Wisconsin has a comprehensive air management

program similar to that of the State. Given this backdrop, the State's

interests in protecting the health and welfare of its citizens must

prevail.''

``* * * [T]he State of Wisconsin believes that EPA's assertion that

the State has no permitting jurisdiction over non-Indians on Indian

reservations is overly broad, especially where the lands are owned by

non-Indians. It is the State of Wisconsin's position that activities by

non-Indians on Indian reservations are subject to a case-by-case review

to determine whether the tribe (the federal government) or the state

has regulatory jurisdiction. In order to regulate non-Indians, the

tribe must demonstrate its inherent authority on a case-by-case basis.

Montana v. US, 450 US 544 [ ] (1981), Brendale v. Confederated Tribes

of Yakima Indian Nation, 492 US 408 [ ] (1989) * * *. In addition, as

noted above, there is no inherent bar to state jurisdiction over the

on-reservation activities of non-Indians.''

Response: To obtain title V program approval a State must

demonstrate that it has adequate authority to issue permits and assure

compliance by all sources required to have permits under title V with

each applicable requirement under the Act. See Act Sec. 502(b)(5); 40

CFR 70.4(b)(3)(i). The authority must include:

A legal opinion from the Attorney General from the State or the

attorney for those State, local, or interstate air pollution control

agencies that have independent counsel, stating that the laws of the

State, locality, or interstate compact provide adequate authority to

carry out all aspects of the program. This statement shall include

citations to the specific stat[ut]es, administrative regulations,

and, where appropriate, judicial decisions that demonstrate adequate

authority.

40 CFR 70.4(b)(3). Thus, the Act requires affected States to

support their title V program submittals with a specific showing of

adequate legal authority over all regulated sources, including sources

located on lands within Indian reservations. For the reasons outlined

below, EPA concludes that the information presented by WDNR has not

adequately demonstrated authority to regulate title V sources located

within the exterior boundaries of reservations of Federally recognized

Tribes, including any non-Indian owned fee lands within reservation

boundaries.

In Washington Department of Ecology v. EPA, 752 F.2d 1465, 1469

(9th Cir. 1985), the court upheld EPA's decision declining to approve

the application of a state program submitted under the Resource

Conservation and Recovery Act (RCRA) to Indian activities within Indian

country, notwithstanding that ``RCRA does not directly address the

problem of how to implement a hazardous waste management program on

Indian reservations.'' The court reasoned that EPA's decision was

within its reasonable discretion and was buttressed by ``well-settled

principles of federal Indian law'':

States are generally precluded from exercising jurisdiction over

Indians in Indian country unless Congress has clearly expressed an

intention to permit it. [citations omitted]. This rule derives in

part from respect for the plenary authority of Congress in the area

of Indian affairs. [citations omitted]. Accompanying the broad

congressional power is the concomitant federal trust responsibility

toward Indian tribes. [citations omitted]. That responsibility arose

largely from the federal role as a guarantor of Indian rights

against state encroachment. [citation omitted]. We must presume that

Congress intended to exercise its power in a manner consistent with

the federal trust obligation. [citation omitted].

Washington Department of Ecology, 752 F.2d at 1469-1470; see also

United States v. Mazurie, 419 U.S. 544, 556 (1975) (the inherent

sovereign authority of Indian Tribes extends ``over both their members

and their territory''); Montana v. United States, 450 U.S. 544, 556-557

(1981) (Tribes generally have extensive authority to regulate

activities on lands that are held by the United States in trust for the

Tribe).

The cases cited by WDNR do not demonstrate that Wisconsin has

authority to administer its title V operating permits program within

the [[Page 12130]] exterior boundaries of Indian reservations. In New

Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 337-38, 340-41, 343-44

(1983), the Supreme Court held that the State of New Mexico's attempt

to regulate the hunting activities of non-tribal members on a Tribe's

reservation was preempted because federal law recognized the authority

of the Tribe to regulate hunting and fishing and the State regulation

of non-members would entangle and interfere with the federal promotion

of tribal authority. In California v. Cabazon Band of Mission Indians,

107 S.Ct. 1083 (1987), the Court held that California and Riverside

County could not assert jurisdiction over bingo and gambling activities

conducted by Indians on Indian land, even though the primary customers

for the activities were non-Indians. The Court found that neither Pub.

L. No. 83-280 nor the Organized Crime Control Act of 1970 authorized

the State or County to impose gambling laws or ordinances on the

reservation. In McClanahan v. Arizona State Tax Comm., 411 U.S. 164

(1973), the Supreme Court held that it was unlawful for the State of

Arizona to impose an income tax on a reservation Indian whose income

was derived from reservation sources. In three of the four Supreme

Court cases cited by WDNR to support its regulation of Indian country

based on preemption analysis, the Court held that state regulation was

preempted.

In Rice v. Rehner, 463 U.S. 713 (1983) the Supreme Court reversed a

lower court's decision that State regulation of liquor on a reservation

was preempted by Federal law. The Court's decision was based on its

conclusion that ``[i]n the area of liquor regulation, we find no

`congressional enactments demonstrating a firm federal policy of

promoting tribal self-sufficiency and economic development''' (citation

omitted) and that Congress authorized State regulation over Indian

liquor transactions. Rice, 463 U.S. at 724, 726, 734-35. In notable

contrast with liquor regulation and as elaborated below, the Act (and

other environmental statutes) plainly provides for tribal and Federal

programs to protect air quality within reservations. Further, as

explained below, there is well-established Federal policy promoting

collaborative tribal and Federal environmental management of

reservations and treating Tribes, not States, as responsible for

protection of the reservation environment.

WDNR cites two additional Supreme Court cases to support its

comment that EPA has been overbroad in proposing to conclude that the

State lacks authority over non-Indian owned lands within the exterior

boundaries of an Indian reservation. WDNR comments that the

determination of regulatory jurisdiction over such lands should be

based on a specific case-by-case review.

The case law addressing a Tribe's authority over non-members on

non-Indian owned fee lands within the exterior boundaries of a

reservation must be viewed in light of the provisions of the Act

providing for tribal and Federal protection of air quality within

reservation boundaries and the reservationwide concerns presented by

air pollution activities, discussed further below.

As noted, EPA's regulations implementing the title V program

require specific evidence of legal authority. WDNR does not present

Federal law, particularized facts, and a formal legal opinion that

specifically and adequately support its broad claim of title V program

jurisdiction over all reservations in Wisconsin. Adequate State

authority is especially necessary in these circumstances where, as set

out below, the Act and relevant Federal policies provide for Tribes and

EPA to protect reservation air quality, Supreme Court case law

recognizes inherent sovereign tribal authority to regulate activities

on fee lands where the conduct may have a serious and substantial

impact on tribal health or welfare, and EPA has proposed to interpret

the Act tribal authority provisions as granting Tribes' authority over

air pollution activities on fee lands within reservations.

For many years Congress has delegated to Indian governing bodies

the authority to redesignate ``[l]ands within the exterior boundaries

of reservations of federally recognized Indian tribes'' for the PSD

program under the Act. See section 164(c) of the Act. In 1990, Congress

broadly addressed tribal authority under the Act, adding sections

110(o) and 301(d) to the Act. Section 301(d)(2) of the Act authorizes

EPA to issue regulations specifying those provisions of the Act for

which it is appropriate ``to treat Indian Tribes as States.'' Further,

it addresses the potential jurisdictional scope of tribal Act programs,

authorizing EPA to treat Tribes in the same manner as States for ``the

management and protection of air resources within the exterior

boundaries of the reservation or other areas within the tribe's

jurisdiction.'' Act Sec. 301(d)(2)(B). In addition, section 110(o)

provides that tribal implementation plans under the Act ``shall become

applicable to all areas * * * located within the exterior boundaries of

the reservation, notwithstanding the issuance of any patent and

including rights-of-way running through the reservation.'' Section

302(r) of the Act defines ``Indian tribe'' to mean ``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.'' Section 302(b) of the Act

includes ``[a]n agency of an Indian tribe'' in the definition of ``air

pollution control agency.'' See also sections 103 and 105 of the Act

(authorizing Federal financial assistance to air pollution control

agencies).

The EPA has proposed to interpret these and other provisions of the

Act as granting Tribes--approved by EPA to administer Act programs in

the same manner as States--authority over all air resources within the

exterior boundaries of a reservation for such programs. The EPA has

explained that ``[t]his grant of authority by Congress would enable

such Tribes to address conduct on all lands, including non-Indian owned

fee lands, within the exterior boundaries of a reservation.'' 59 FR

43956, 43958-43960 (Aug. 25, 1994) (legal rationale).1

\1\EPA's proposed interpretation was informed in part by the

significant regulatory entanglements and inefficiencies that could

result if tribes have reservationwide jurisdiction over Act Tribal

implementation plans (TIPs), as plainly provided in section 110(o)

of the Act, but States are conferred jurisdiction within reservation

boundaries over non-TIP programs, such as title V. See 59 FR 43959;

see also New Mexico v. Mescalero Apache Tribe, 462 U.S. at 340-41.

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The Supreme Court has indicated that a Tribe ``may * * * retain

inherent power to exercise civil authority over the conduct of non-

Indians on fee lands within its reservation when that conduct threatens

or has some direct effect on the * * * health or welfare of the

tribe.'' Montana, 450 U.S. at 566. A Tribe's inherent authority must be

determined on a case-by-case basis, considering whether the conduct

being regulated has a direct effect on the health or welfare of the

Tribe substantial enough to support the Tribe's jurisdiction over non-

Indians. See Brendale v. Confederated Tribes and Bands of the Yakima

Indian Nation, 492 U.S. 408 (1989).

Thus, EPA observed that even without the proposed grant of

authority, Indian Tribes would very likely have inherent authority over

all activities within reservation boundaries, including non-Indian

owned activities on fee lands, that are subject to Act regulation. The

high mobility of air pollutants, resulting area-wide effects and the

seriousness of such impacts would all tend to support

[[Page 12131]] such inherent tribal authority. See 59 FR 43958, n. 5;

see also 56 FR 64876 at 64877-64879 (Dec. 12, 1991).

On January 24, 1983, the President issued a Federal Indian Policy

stressing two related themes: (1) That the Federal government will

pursue the principle of Indian ``self-government'' and (2) that it will

work directly with tribal governments on a ``government-to-government''

basis. An April 29, 1994 Presidential Memorandum reiterated that the

rights of sovereign tribal governments must be fully respected. 59 FR

22,951 (May 4, 1994).

The EPA's tribal policies commit to certain principles, including

the following:

EPA recognizes tribal Governments as sovereign entities with

primary authority and responsibility for the reservation populace.

Accordingly, EPA will work directly with tribal Governments as the

independent authority for reservation affairs, and not as the

political subdivisions of States or other governmental units.

* * * * *

In keeping with the principal of Indian self-government, the

Agency will view tribal Governments as the appropriate non-Federal

parties for making decisions and carrying out program

responsibilities affecting Indian reservations, their environments,

and the health and welfare of the reservation populace. Just as

EPA's deliberations and activities have traditionally involved

interests and/or participation of State Governments, EPA will look

directly to tribal Governments to play this lead role for matters

affecting reservation environments.

November 8, 1984 ``EPA Policy for the Administration of

Environmental Programs on Indian Reservations''; Policy Reaffirmed by

Administrator Carol M. Browner in a Memorandum issued on March 14,

1994; see also Washington Department of Ecology, 752 F.2d at 1471-72 &

n. 5.

The United States also has a unique fiduciary relationship with

Tribes, and EPA must consider tribal interests in its actions. Nance v.

EPA, 645 F.2d 701, 710 (9th Cir.), cert. denied, Crow Tribe of Indians

v. EPA, 454 U.S. 1081 (1981).

The EPA provides federal financial assistance and technical

assistance to Tribes to support assessment and protection of

reservation environments including air quality. Section 301(d)(4) of

the Act expressly provides for EPA administration of Act programs where

it is inappropriate or infeasible for Tribes. EPA has described its

efforts and plans to protect reservation air quality. The EPA will fill

gaps in air quality protection in the interim period before tribal Act

programs are approved, as necessary to ensure that reservation air

quality is adequately protected. See 59 FR 43960-61. The EPA will issue

proposed rules within the next few months that will provide for EPA

implementation of title V permit programs where Tribes lack approved

programs.

Even where an environmental statute did not directly address

management on reservations and Tribes themselves had not assumed

authority for program management, the reviewing court upheld EPA's

decision declining to approve a State program's application to Indian

country and concluded:

[T]he tribal interest in managing the reservation environment

and the federal policy of encouraging tribes to assume or at least

share in management responsibility are controlling.

* * * * *

It is enough that EPA remains free to carry out its policy of

encouraging tribal self-government by consulting with the tribes

over matters of hazardous waste management policy, such as the

siting of waste disposal. * * * The `backdrop' of tribal

sovereignty, in light of federal policies encouraging Indian self-

government, consequently supports EPA's interpretation of RCRA.

Washington Dept. of Ecology, 752 F.2d at 1427 (citation omitted).

Further, the State has failed to identify any compelling State

interest that would justify broad assertion of State authority

throughout Indian country. At this time, EPA is not aware of any

facility within the exterior boundaries of an American Indian

reservation in the State of Wisconsin that requires a title V operating

permit. It is possible but entirely speculative that some future title

V reservation sources may be located near State boundaries. As

indicated, EPA has issued proposed rules that would authorize Tribes to

administer EPA-approved title V programs and, in the interim, EPA is

developing regulations that would authorize EPA to issue title V

permits for affected sources where Tribes lack approved programs. In

addition, the Act provides several mechanisms to address the potential

transport of pollution off-reservation. See, e.g., 59 FR 43964;

sections 110(a)(2)(D) and 126 of the Act; section 164(e) of the Act;

section 505 of the Act.

Based on the Clean Air Act and Federal Indian law and policies, EPA

concludes that WDNR has not adequately supported the application of its

title V program to reservations generally or to fee lands within

reservation boundaries. See also 53 FR 43080 (Oct. 25, 1988) (EPA's

decision declining to approve Washington's request to administer the

Safe Drinking Water Act's Underground Injection Control Program to

Indian lands).

Finally, EPA's decision to decline to approve application of the

State's program to lands within the exterior boundaries of reservations

of federally recognized Indian Tribes based on the limited information

submitted by the State and the special issues and considerations

associated with tribal lands is within the Agency's discretion. See Act

section 502(d)(1) (EPA ``may'' approve a [state title V] program) & Act

section 502(g) (EPA ``may'' by rule grant the [state title V] program

interim approval); compare Alabama Power Co. v. EPA, No. 94-1170, slip

op. at 11 (D.C. Cir. Nov. 29, 1994) (``the AEL provision's mandatory

language * * * `[t]he permitting authority shall * * * authorize an

emission limitation less stringent than the applicable limitation * *

*.' (emphasis added) * * *''); see also 59 FR 43982 (``[a] State Clean

Air Act program submittal shall not be disapproved because of failure

to address air resources within the exterior boundaries of an Indian

Reservation or other areas within the jurisdiction of an Indian

Tribe'') (proposed 40 CFR 49.10).

Comment: ``[T]he proposed interim approval discusses both Indian

reservations and tribal lands, with no clear distinction between the

two. On page 4 of its proposed interim approval, EPA states: `* * * the

proposed interim approval of Wisconsin's operating permits program will

not extend to lands within the exterior boundaries of any Indian

reservation in the State of Wisconsin.' However, it is our

understanding that Indians may own lands outside of a reservation which

may still be considered `tribal lands'. Certain lands may be simply

owned by tribal members, while other lands may be considered `trust

lands' (i.e. after approval by the U.S. Department of the Interior). We

are uncertain what EPA's position is as to whether State jurisdiction

extends to various lands owned by Indians, but located outside of

reservation boundaries. Again, this determination should likely be made

on a case-by-case basis, as the State of Wisconsin may have regulatory

jurisdiction on these lands. We are concerned that if the state does

not have jurisdiction over these lands, a `checkerboard' pattern of

regulation will develop, with no clear delineation of who has

jurisdiction over air pollution sources. This can result in a non-

uniform, confusing and ineffective air pollution regulatory system. We

believe that this issue should be clarified in EPA's final interim

approval. Our position is that the State of Wisconsin should be allowed

to exercise its jurisdiction on these lands, which are

[[Page 12132]] located outside of reservation boundaries.''

Response: As indicated, EPA is currently not aware of any title V

source located on lands over which an Indian tribe has jurisdiction.

Further, the State's comment does not identify any specific affected

off-reservation sources. Without more information about specific

circumstances, EPA cannot address the State's specific concern. In

general, based on the information currently submitted to EPA by the

State and largely for the reasons outlined in the preceding response,

EPA's approval of Wisconsin's program would not extend to any sources

located within Indian country, as defined at 18 U.S.C. 1151. The EPA

will work with both the State and an affected tribal governments to

evaluate any specific questions that are in fact presented.

2. Fee Adequacy

WDNR commented that the State's title V fees were developed to

provide for adequate implementation of the minimum program requirements

as they existed when the fees were developed. However, WDNR is

concerned that these fees may not be sufficient to cover any extra

requirements that may be added to the program, especially the section

114 enhanced compliance monitoring requirements and the section 112(r)

emergency release requirements. WDNR stated that EPA must take into

account the limited resources that States will have under the

presumptive minimum fees established for the title V program in

promulgating these regulations.

Although title V establishes a presumptive minimum cost model, it

also requires that a State's fee schedule result in the collection and

retention of revenues sufficient to cover permit program costs. See 40

CFR 70.9 as well as the guidance memorandum issued on August 4, 1993

entitled, ``Reissuance of Guidance on Agency Review of State Fee

Schedules for Operating Permits Programs Under Title V,'' signed by

John Seitz, Director of the Office of Air Quality Planning and

Standards. This adequacy requirement ensures that title V programs are

not and will not be underfunded, and obligates the States to update and

adjust their fee schedules if they are not sufficient to fund the

program costs. It may therefore be appropriate to adjust fees for

program expenditure increases, such as the implementation of new

applicable requirements for enhanced monitoring and emergency releases.

3. Acid Rain Fees

The EPA proposed that the approval of Wisconsin's fee schedule does

not extend to Wisconsin's fee provisions for the collection of

emissions fees from utilities with affected units under section 404 of

the Act (s.144.399(2)(am), Wis. Stats., and s.NR 410.04(4), Wis. Adm.

Code). 40 CFR 70.9(b)(4) provides that, for 1995 through 1999, no fee

for purposes of title V shall be required to be paid with respect to

emissions from any affected unit under section 404 of the Act. One

commenter argued that the State fees are not directly charged on

emissions from Phase I affected units, and therefore EPA should not be

concerned about these fees, which would place Wisconsin's fee revenue

collection slightly above the presumptive minimum cost established in

part 70. Although the fees in question are not directly charged on

emissions from Phase I affected units, they are charged to other units

operated by a utility that owns or operates a Phase I affected source.

In addition, the fee amount is equivalent to what would have been

charged to the Phase I affected unit. In other words, the State program

charges emissions fees to utilities with Phase I units in an amount

equivalent to what would have been charged directly to the Phase I

units. Because of this equivalency, EPA has determined that these fees

cannot be considered title V fees.

4. Section 112(g) Implementation

The EPA received several comments regarding the proposed approval

of Wisconsin's preconstruction permitting program 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. Two commenters argued that Wisconsin should not,

and cannot, implement section 112(g) until: (1) EPA has promulgated a

section 112(g) regulation, and (2) the State has a section 112(g)

program in place. The commenters also argued that Wisconsin's

preconstruction review program cannot serve as a means to implement

section 112(g) because it was not designed for that purpose. One

commenter also asserted that such a regulatory program is

unconstitutional because the section 112(g) requirements are vague. In

addition to the above comments, WDNR also commented that EPA should

delay the implementation of section 112(g) until the Federal

regulations are promulgated. WDNR anticipates that the implementation

of section 112(g) without Federal regulations will be difficult and

time consuming. However, WDNR also commented that it will implement the

requirements of section 112(g) if a such a delay is not possible.

In its proposed interim approval of Wisconsin's part 70 program,

EPA proposed to approve Wisconsin's preconstruction review program for

the purpose of implementing section 112(g) during the transition period

before promulgation of a Federal rule implementing section 112(g). This

proposal was based in part on an interpretation of the Act that would

require sources to comply with section 112(g) beginning on the date of

approval of the title V program, regardless of whether EPA had

completed its section 112(g) rulemaking. The EPA has since revised this

interpretation of the Act in a Federal Register notice published on

February 14, 1995. 60 FR 8333. The revised interpretation postpones the

effective date of section 112(g) until after EPA has promulgated a rule

addressing that provision. The revised 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), Wisconsin must be able to

implement section 112(g) during the transition period between

promulgation of the Federal section 112(g) rule and adoption of

implementing State regulations.

For this reason, EPA is finalizing its approval of Wisconsin's

preconstruction review program. This approval clarifies that the

preconstruction review program is available as a mechanism to implement

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

section 112(g) rule and adoption by Wisconsin of rules established to

implement section 112(g). However, since the approval is for the single

purpose of providing a mechanism to implement section 112(g) during the

transition period, the approval itself will be without effect if EPA

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

to the requirements of the rule until State regulations are adopted.

Further, EPA is limiting the duration of this approval to 18 months

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

The EPA believes that, although Wisconsin currently lacks a program

designed specifically to implement section 112(g), Wisconsin's

[[Page 12133]] preconstruction review program will serve as an adequate

implementation vehicle during a transition period because it will allow

Wisconsin to select control measures that would meet MACT, as defined

in section 112, and incorporate these measures into a federally

enforceable preconstruction permit.

Another consequence of the fact that Wisconsin lacks a program

designed specifically to implement section 112(g) is that the

applicability criteria found in its preconstruction review program may

differ from those in the section 112(g) rule. However, whether a

particular source change qualifies as a modification, construction, or

reconstruction for section 112(g) purposes during any transition period

will be determined according to the final section 112(g) rule. The EPA

would expect Wisconsin to be able to issue a preconstruction permit

containing a case-by-case determination of MACT where necessary for

purposes of section 112(g) even if review under its own preconstruction

review program would not be triggered.

WDNR also commented that it will implement section 112(g) using its

preconstruction review program, as EPA proposed on October 19, 1994. In

addition, WDNR agreed that allowing Wisconsin 18 months from

promulgation of Federal section 112(g) regulations to adopt its own

regulations is sufficient.

One commenter incorporated by reference its comments on the

proposed section 112(g) rule, and stated that the proposed rule has

technical, legal, and constitutional defects that disqualify it as a

valid or workable approach to section 112(g) implementation. The EPA

believes the appropriate forum for pursuing objections to the legal

validity of Federal regulations is by: (1) Submitting comments on a

proposed rulemaking during the public comment period for that

particular rulemaking, or (2) petitioning for review of the promulgated

rule in the D.C. Circuit Court of Appeals. If the commenter has

concerns with the final section 112(g) rule, the commenter will have

the opportunity to pursue such action once the section 112(g) rule is

promulgated.

Two commenters assumed that EPA would delegate the section 112(g)

requirements to the State. The EPA wishes to clarify that the

implementation of section 112(g) by the State, including case-by-case

MACT determinations, is a requirement for approval of a State title V

program. In other words, approval of the title V operating permits

program confers on the State responsibility to implement section

112(g). Since the requirement to implement section 112(g) lies with the

State in the first instance, there is no need for a delegation action

apart from the title V program approval mechanism, except where the

State seeks approval of a ``no less stringent'' program under 40 CFR

part 63 subpart E. The EPA's approval of Wisconsin's program for

delegation of section 112 standards as promulgated does not affect this

responsibility to implement section 112(g).

5. Acid Rain Commitment

WDNR commented that there has been a delay in finalizing the

State's acid rain regulations, and stated that Wisconsin will be

requesting a short extension of its January 1, 1995 commitment date for

submitting the acid rain program requirements. On December 19, 1994,

EPA received WDNR's request to extend the acid rain submittal

requirement to May 1, 1995. Because EPA does not expect this extension

to affect WDNR's ability to timely implement the Phase II acid rain

requirements, EPA approves WDNR's request.

6. Operational Flexibility Provisions

One commenter questioned EPA's authority to grant interim approval

to a State that did not include operational flexibility provisions for

``new'' and ``modified'' sources (as defined by Wisconsin's program).

The Act provides that EPA may grant interim approval to a program that

substantially meets the requirements of title V, but is not fully

approvable. The key term, ``substantially meets'', was not expressly

defined in the statute. The part 70 regulations further address this

issue, but in fairly broad terms, specifying eleven core program

elements, including operational flexibility. Further guidance was

issued in a memorandum on August 2, 1993 entitled, ``Interim Title V

Program Approvals,'' signed by John Seitz, Director of the Office of

Air Quality Planning and Standards.

40 CFR 70.4(d)(3)(viii) provides that the State program must allow

certain changes to be made without requiring a permit revision if the

changes are not title I modifications and do not exceed the emissions

allowable under the permit, as provided in 40 CFR 70.4(b)(12). The

preamble to the part 70 rulemaking further indicates that interim

programs need to include only the ability to generally implement this

section. See 57 FR 32271.

Each of the three approaches to operational flexibility set forth

in 40 CFR 70.4(b)(12) describes an approach to implementing the

language of the statutory mandate for operational flexibility. As

explained in the August 2, 1993 memorandum, EPA interprets the

regulation and preamble to mean that a State program would be eligible

for interim approval if it provides for the implementation of any one

of these three approaches for providing operational flexibility.

40 CFR 70.4(b)(12)(i) provides for section 502(b)(10) changes.

Wisconsin's program includes this provision for ``existing'' sources,

but not for ``new'' or ``modified'' sources. 40 CFR 70.4(b)(12)(ii)

provides for an optional SIP trading program. Wisconsin's program does

not currently include this provision, as no SIP trading program exists.

40 CFR 70.4(b)(12)(iii) provides for trading in the permitted facility

for the purpose of complying with a federally enforceable emissions cap

that is established in the permit independent of otherwise applicable

requirements. Wisconsin's program includes this provision in s.NR

407.025(2)(a), Wis Adm. Code.

Wisconsin's program partially includes the first operational

flexibility provision, and fully includes the third provision.

Therefore, Wisconsin's operational flexibility provisions substantially

meet the requirements of part 70, and the program is eligible for

interim approval. However, EPA is clarifying in the final interim

approval of Wisconsin's program that the operational flexibility

deficiency is specific to the requirements of 40 CFR 70.4(b)(12)(i).

7. Denial of Permit Renewal Applications

Two commenters disagreed with EPA's proposal that, as a condition

for full approval, Wisconsin's program must provide the authority to

deny a renewal application for a source that is not in compliance. The

commenters stated that part 70 does not mandate denial in such a

circumstance, and Wisconsin should be able to retain its discretion to

either approve or deny a permit renewal application for a source that

is not in compliance.

The EPA agrees with the commenters that the denial of a permit

renewal application for a source that is not in compliance is a

discretionary action. As explained in the proposal, however,

Wisconsin's program is lacking the underlying authority to deny a

renewal application for a source that is not in compliance. As a

condition for full approval, Wisconsin's program must include the

provision that any permit noncompliance is grounds for denial of a

permit renewal application. This [[Page 12134]] should not be

interpreted to mean that Wisconsin has no discretion in determining its

action on individual permit renewal applications for noncomplying

sources.

8. Reopenings for Cause

Three commenters disagreed with EPA's proposal that, as a condition

for full approval, Wisconsin's program must be revised to require

permits to be reopened for cause under certain circumstances. Some

commenters noted that the State reopening provisions are structured

differently than the part 70 reopening provisions. The EPA proposed

that reopening permits for cause must be mandatory for the following

State provisions: ss.NR 407.14(1) (b), (c), (d), and (h), Wis. Adm.

Code.

One commenter specifically opposed the mandatory reopening

requirement for s.NR 407.14(1)(b), which provides for reopening to

assure compliance with applicable requirements. This provision is

equivalent to 40 CFR 70.7(f)(1)(iv), which requires reopening if the

permitting authority determines that the permit must be revised to

assure compliance with applicable requirements. Therefore, s.NR

407.14(1)(b) must be revised to require reopenings to assure compliance

with applicable requirements. In addition, the same commenter

referenced 40 CFR 70.7(f)(1)(i) requirements in the discussion of the

State's s.NR 407.14(1)(b) requirements. The Federal provisions in (i)

do not preclude the requirements in (iv).

The second provision, s.NR 407.14(1)(c), provides for reopening

when there is a change in any applicable requirement, a new applicable

requirement, or an additional applicable requirement. This State

provision includes the provisions of 40 CFR 70.7(f)(1)(i), which

requires reopening of a permit with a remaining term of 3 or more years

when additional applicable requirements become applicable. This State

provision also includes the provisions of 40 CFR 70.7(f)(1)(ii), which

requires reopening when additional requirements become applicable to an

affected source under the acid rain program. Therefore, s.NR

407.14(1)(c) must be revised to require reopenings, in accordance with

the 3 year requirement under 40 CFR 70.7(f)(1)(i), or the acid rain

requirements under 40 CFR 70.7(f)(1)(ii), as applicable. The EPA is

clarifying in the final interim approval of Wisconsin's program that

s.NR 407.14(1)(c) must be mandatory only to the extent required by 40

CFR 70.7(f)(1).

The third provision, s.NR 407.14(1)(d), provides for reopening when

there is a change in any applicable emission limitation, ambient air

quality standard, or ambient air quality increment that requires either

a temporary or permanent reduction or elimination of the permitted

emission. One commenter specifically opposed the mandatory reopening

requirement for this State provision, stating that 40 CFR 70.7(f)(1)

does not establish any requirement that a permit be reopened in

response to a change in an applicable emission limitation or an air

quality increment. The EPA disagrees with this comment, as the

provisions outlined in s.NR 407.14(1)(d) include additional applicable

requirements that a source may be subject to. Therefore, s.NR

407.14(1)(d) must be revised to require reopenings, in accordance with

the 3 year requirement under 40 CFR 70.7(f)(1)(i), or the acid rain

requirements under 40 CFR 70.7(f)(1)(ii), as applicable. However, EPA

is clarifying in the final interim approval of Wisconsin's program that

s.NR 407.14(1)(d) must be mandatory only to the extent required by 40

CFR 70.7(f)(1).

The fourth provision, s.NR 407.14(1)(h), provides for reopening

when a permit contains a material mistake or inaccurate or unclear

statements. Two commenters specifically opposed the mandatory reopening

requirement for this State provision, stating that the Wisconsin

provision is broader than the requirements of 40 CFR 70.7(f)(1)(iii).

The EPA partially agrees with the commenters. 40 CFR 70.7(f)(1)(iii)

requires permit reopening when the permitting authority determines that

the permit contains a material mistake or that inaccurate statements

were made in establishing the emissions standards or other terms or

conditions of the permit. The Wisconsin provision is broader because it

includes ``unclear statements'' in a permit, in addition to material

mistakes and inaccurate statements. The Wisconsin provision also does

not limit the ``inaccurate statements'' provision to emissions

standards or other terms or conditions of the permit. Therefore, EPA is

clarifying in the final interim approval of Wisconsin's program that

s.NR 407.14(1)(h) must be mandatory only to the extent required by 40

CFR 70.7(f)(1).

One commenter also objected to any revision that would require WDNR

to mandatorily reopen any operating permit issued to a non-part 70

source. The EPA's interim approval of Wisconsin's title V operating

permits program only applies to the State's title V program, and does

not require the State to revise its operating permits program for non-

part 70 sources.

9. Wisconsin Permitting Exemptions

Four commenters expressed concerns with EPA's proposal that, as a

condition for full approval, some of Wisconsin's permitting exemptions

must be revised to ensure that no part 70 sources are exempted from the

requirement to obtain an operating permit.

All four commenters stated that the exemptions and associated

recordkeeping and reporting requirements adequately limit potential to

emit for the exempted sources. The EPA disagrees that the exemptions in

question adequately limit potential to emit. As explained in the

proposal, these Wisconsin permitting exemptions determine applicability

based in part or totally on these sources' actual emissions or

throughput, and the State's recordkeeping requirements do not provide a

federally enforceable mechanism for limiting these sources' potential

emissions to the actual emissions levels or throughput established in

the exemptions. The recordkeeping provisions do not include specific

emissions accounting requirements, and therefore do not ensure that the

recordkeeping will be adequate to determine sources' actual emissions.

In addition, the exemptions do not provide for any reporting

requirements. Finally, mechanisms to limit potential to emit must be

based on production or operation limits; emission rates do not

adequately limit a source's potential to emit.

WDNR commented that, while it disagrees with EPA's concerns, WDNR

commits to working with EPA to develop acceptable and practical

mechanisms to deal with these source categories. The EPA agrees to work

with WDNR to resolve this interim approval issue, and believes that it

is important to develop mechanisms to avoid flooding the title V

program with thousands of small sources that will never emit at part 70

applicability levels.

One commenter specifically objected to EPA's concern with ss.NR

407.03(1) (g) and (h). The commenter appears to be of the opinion that

these exemptions are based on potential to emit because both exemptions

include sources that ``will emit not more than 1,666 pounds of organic

compounds per month''. The EPA disagrees with this interpretation. The

Wisconsin provision provides an exemption for ``* * * operations which

emit or will emit not more than 1,666 pounds of organic chemicals per

month''. While this provision exempts [[Page 12135]] sources that

``will emit'' at this level, it also exempts sources that ``emit'' at

this level. A source that has actual emissions of 1,666 pounds of

organic chemicals per month may have the potential to emit at greater

amounts, and therefore may be a part 70 source. In addition, the

commenter noted that these Wisconsin exemptions are based on emissions

measured prior to entering any emission control devices, while the

determination of a source's potential to emit may be calculated by

including air pollution control devices (if enforceable by the

Administrator). Regardless of this distinction, EPA does not believe

that the exemptions are based on potential to emit.

One commenter requested that the exemption in ss.NR 407.03(1)(t) be

maintained to the extent possible. This provision provides an exemption

for a combination of specified activities. The exemption is structured

differently than the other exemptions for which EPA is granting interim

approval, as it does not attempt to limit sources' potential to emit.

Instead, this exemption allows combinations of activities to be grouped

together, and certain combinations could result in emissions that would

exempt part 70 sources from the permit program. Therefore, Wisconsin

must revise this exemption to ensure that no part 70 sources are

exempted. The State will need to determine to what extent this

exemption can be retained and still ensure that no part 70 sources are

eligible for the exemption.

10. Source Category Limited Interim Approval

Two commenters were supportive of EPA's proposed source category

limited (SCL) interim approval; however, they were concerned that the

State's current determination that it will not need additional time to

issue initial permits would require those source categories to submit

permit applications before the State has fully developed the program

requirements for these sources. The EPA proposed SCL interim approval

for Wisconsin for two separate circumstances: for new and modified

sources that are not in compliance, and for sources belonging to the

source categories covered by the permitting exemptions in ss.NR

407.03(1) (d), (g), (h), (o), (s), (sm), and (t).

The deficiency in Wisconsin's program with respect to new and

modified sources that are not in compliance relates to the lack of

State authority to issue permits to such sources. However, the State

program does require these sources to submit permit applications in

accordance with the State application schedule. Therefore, these

sources are already covered by the State program, and are currently

required to submit applications.

The deficiency in Wisconsin's program with respect to the

permitting exemptions relates to the lack of State authority to require

permits for certain part 70 sources. Therefore, the State may currently

exempt some part 70 sources. Interim approval requires the State to

correct this deficiency and submit a corrected program to EPA within 18

months after the effective date of the interim approval. Once the State

corrects the deficiency, any part 70 sources which had been exempt will

be required to obtain an operating permit in accordance with the

requirements of the State program.

As stated in the proposal, Wisconsin has not requested additional

time for issuing initial operating permits because the State intends to

fix the SCL interim approval deficiencies in time to permit all sources

within the 3 year phase-in period. In addition, previously exempted

part 70 sources (if any exist) will be required to submit applications

within one year of the interim approval effective date. If Wisconsin

determines that it cannot meet these implementation requirements, SCL

interim approval does provide that the completion of the initial

permitting of the SCL sources could occur as late as 5 years after the

granting of SCL interim approval (the 3 year phase in period plus the 2

year interim approval). To obtain this extension, Wisconsin would have

to submit a request to EPA that includes compelling reasons why the

additional time is needed. For additional discussion of this issue,

including the specific requirements for a state's extension request,

refer to the August 2, 1993 memorandum entitled, ``Interim Title V

Program Approvals,'' signed by John Seitz, Director of the Office of

Air Quality Planning and Standards.

11. Proposed Part 70 Rules

One commenter submitted comments it had previously filed on the

proposed part 70 rule, and stated that it objected to interim approval

of Wisconsin's operating permits program for the same reasons it had

objected to the part 70 rule itself. The EPA believes the appropriate

forum for pursuing objections to the legal validity of the part 70 rule

is through a petition for review of the rule brought in the D.C.

Circuit Court of Appeals. The EPA notes that this commenter has filed

such a petition. However, unless and until the part 70 rule is revised,

EPA must evaluate programs according to the rule that is in effect.

12. Particulate Matter (PM) Issues

One commenter raised several issues regarding PM that were not

relevant to EPA's proposed interim approval of Wisconsin's operating

permits program. Therefore, EPA is not addressing these comments in the

final action on Wisconsin's program.

B. Final Action

The EPA is promulgating interim approval of the operating permits

program submitted by the State of Wisconsin on January 27, 1994. The

scope of Wisconsin's part 70 program approved in this notice applies to

all part 70 sources within Wisconsin, except for tribal lands in the

manner described previously in this notice. The State must make the

following changes to receive full approval:

1. Revise Wisconsin's operating permit program regulations to

provide for criminal fines against any person who knowingly makes any

false material statement, representation, or certification in a permit

application. This provision is required by 40 CFR 70.11(a)(3)(iii).

2. Revise the following legislation and regulations to provide an

application shield for ``new'' and ``modified sources'' (as defined by

ss.144.30(20s) and (20e), Wis. Stats.): s.144.391(1)(b), Wis. Stats.;

s.144.3925(7), Wis. Stats.; s.NR 407.06(2), Wis. Adm. Code; and s.NR

407.08, Wis. Adm. Code. Wisconsin's program does provide an application

shield for ``existing sources'' (as defined by s.144.30(13). 40 CFR

70.7(b) requires that the application shield must apply to all part 70

sources which meet the application shield requirements.

3. Revise the following legislation and regulation to provide for

operational flexibility, as required by 40 CFR 70.4(b)(12)(i), for

``new'' and ``modified sources'' (as defined by ss.144.30(20s) and

(20e), Wis. Stats.): s.144.391(4m), Wis. Stats.; and s.NR 407.025, Wis.

Adm. Code. Wisconsin's program does include this requirement for

``existing sources'' (as defined by s.144.30(13)). 40 CFR

70.4(b)(12)(i) is required to apply to all part 70 sources.

4. Revise the appropriate legislation and regulations to provide

the authority to deny a renewal application for a source that is not in

compliance. 40 CFR 70.6(a)(6)(i) requires that any permit noncompliance

is grounds for denial of a permit renewal application. Section NR

407.09(1)(f)1., Wis. Adm. Code, states that the authority to deny a

permit renewal application for noncompliance [[Page 12136]] is

contingent upon the requirements in s.144.3925(6), Wis. Stats., which

do not currently provide for a denial in such a circumstance. Appendix

P of Wisconsin's operating permits program submittal includes draft

statutory revisions that are intended to fix this deficiency. The draft

revisions propose to add this authority to s.144.396(3)(c), Wis. Stats.

Regardless of the statutory placement of this authority, s.NR

407.09(1)(f)1., Wis. Adm. Code, must be revised if necessary to

reference the correct statutory authority.

5. Revise ss.NR 407.14(1)(b), (c), (d), and (h), Wis. Adm. Code, to

provide that if the conditions specified in these provisions are met,

and the conditions meet the requirements of 40 CFR 70.7(f)(1), WDNR is

required to reopen a permit for cause. Under the State's current

provisions, reopening a permit under these circumstances is

discretionary. 40 CFR 70.7(f)(1) establishes the conditions under which

reopening a permit for cause is mandatory.

6. Revise s.NR 407.05, Wis. Adm. Code, to include the duty to

supplement or correct application provisions, as required under 40 CFR

70.5(b).

7. Revise s.144.3935(1)(a), Wis. Stats., to provide WDNR the

authority to issue operating permits to ``new'' and ``modified'' part

70 sources (as defined by ss.144.30(20s) and (20e), Wis. Stats.) that

are not in compliance. 40 CFR 70.3(a) requires that the permitting

agency must have authority to issue permits to all part 70 sources.

Revise s.NR 407.05(4)(h)2.c., Wis. Adm. Code, to provide that

compliance plan application requirements for noncomplying new and

modified sources include a narrative description of how the sources

will achieve compliance. 40 CFR 70.5(c)(8)(ii)(C) requires this

compliance plan application requirement for all part 70 sources that

are not in compliance.

Revise s.NR 407.05(4)(h)3.c., Wis. Adm. Code, to provide for

schedule of compliance application requirements for noncomplying new

and modified sources. 40 CFR 70.5(c)(8)(iii)(C) requires schedules of

compliance in all noncomplying part 70 source applications.

Revise s.NR 407.05(4)(h)4., Wis. Adm. Code, to provide for progress

report application requirements for noncomplying new and modified

sources. 40 CFR 70.5(c)(8)(iv) requires progress report schedules in

all noncomplying part 70 source applications.

Revise s.NR 407.09(4)(b), Wis. Adm. Code, to provide for schedule

of compliance and progress report requirements in permits issued to

noncomplying new and modified sources. 40 CFR 70.6(c) (3) and (4)

require schedule of compliance and progress report requirements in all

part 70 permits that are issued to noncomplying sources.

8. Revise ss.NR 407.03(1) (d), (g), (h), (o), (s), (sm), and (t),

Wis. Adm. Code, to ensure that no part 70 sources are exempted from the

requirement to obtain an operating permit, as provided under 40 CFR

70.3. Section NR 407.03(1)(t) potentially exempts certain part 70

sources, and ss.NR 407.03(1) (d), (g), (h), (o), (s), and (sm) do not

provide for adequate procedures to limit these sources' potential to

emit. The 40 CFR 70.2 definition of ``major source'' considers the

potential to emit of a source in determining major source status. The

Wisconsin permitting exemptions listed above determine applicability

based in part or totally on these sources' actual emissions or

throughput, and the provisions in s.NR 407.03(4) do not provide a

federally enforceable mechanism for limiting these sources' potential

emissions to the actual emissions levels or throughput established in

the exemptions.

To be eligible for interim approval, 40 CFR 70.4(d)(3)(ii) requires

that a program provide for adequate authority to issue permits

containing all applicable requirements to all title V sources. Due to

the deficiencies outlined in 7. and 8. above, EPA is granting source

category limited interim approval to Wisconsin's operating permit

program. See 57 FR 32270 (July 21, 1992). Therefore, EPA is not

including ``new'' and ``modified'' part 70 sources that are not in

compliance (as defined by Wisconsin's operating permits program), and

part 70 sources covered by Chapter NR 407.03(1) (d), (g), (h), (o),

(s), (sm), and (t) as part of the interim approval of Wisconsin's

program. The exclusion of these source categories from approval,

however, does not affect Wisconsin's obligation to fix these

deficiencies in order to be eligible for full approval.

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

April 7, 1997. During this interim approval period, Wisconsin is

protected from sanctions, and EPA is not obligated to promulgate,

administer and enforce a Federal operating permits program for 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 the

effective date of this interim approval, as does the 3-year time period

for processing the initial permit applications.

If the State of Wisconsin fails to submit a complete corrective

program for full approval by October 7, 1996, EPA will start an 18-

month clock for mandatory sanctions. If the State of Wisconsin then

fails to submit a corrective program that EPA finds complete before the

expiration of that 18-month period, EPA will be required to apply one

of the sanctions in section 179(b) of the Act, which will remain in

effect until EPA determines that Wisconsin has corrected the deficiency

by submitting a complete corrective program. Moreover, if the

Administrator finds a lack of good faith on the part of the State of

Wisconsin, both sanctions under section 179(b) will apply after the

expiration of the 18-month period until the Administrator determines

that Wisconsin has come into compliance. In any case, if, 6 months

after application of the first sanction, Wisconsin still has not

submitted a corrective program that EPA has found complete, a second

sanction will be required.

If EPA disapproves the State of Wisconsin's complete corrective

program, EPA will 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 Wisconsin has submitted a

revised program and EPA has determined that it corrected the

deficiencies that prompted the disapproval. Moreover, if the

Administrator finds a lack of good faith on the part of Wisconsin, both

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

18-month period until the Administrator determines that the State has

come into compliance. In all cases, if, 6 months after EPA applies the

first sanction, Wisconsin has not submitted a revised program that EPA

has determined corrects the deficiencies, a second sanction is

required.

In addition, discretionary sanctions may be applied where warranted

any time after the expiration of an interim approval period if the

State has not timely submitted a complete corrective program or EPA has

disapproved its submitted corrective program. Moreover, if EPA has not

granted full approval to Wisconsin's program by the expiration of this

interim approval and that expiration occurs after November 15, 1995,

EPA must promulgate, administer and enforce a Federal permits program

for the State of Wisconsin upon expiration of interim approval.

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

section [[Page 12137]] 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, EPA is also promulgating

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 Federal standards as promulgated. This program for

delegations only applies to sources covered by the part 70 program.

The EPA is also promulgating approval of Wisconsin's

preconstruction permitting program found in Chapters 406 and 408, Wis.

Adm. Code, 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 promulgation of the Federal section

112(g) rule and adoption of any necessary State rules to implement

EPA's section 112(g) regulations. However, since the approval is for

the single purpose of providing a mechanism to implement section 112(g)

during the transition period, the approval itself will be without

effect if EPA decides in the final section 112(g) rule that sources are

not subject to the requirements of the rule until State regulations are

adopted. Although section 112(l) generally provides authority for

approval 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 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, for example, section 110. The duration of this

approval is limited to 18 months following promulgation by EPA of

section 112(g) regulations, to provide Wisconsin adequate time for the

State to adopt regulations consistent with the Federal requirements.

III. Administrative Requirements

A. Official File

Copies of the State's submittal and other information relied upon

for the final interim approval, including public comments on the

proposal received and reviewed by EPA, are maintained in the official

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

record of all the information submitted to, or otherwise considered by,

EPA in the development of this final interim approval. The official

file 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

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 23, 1995.

Robert Springer,

Acting Regional Administrator.

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 the entry for

Wisconsin in alphabetical order to read as follows:

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

Permits Programs

* * * * *

Wisconsin

(a) Department of Natural Resources: submitted on January 27,

1994; interim approval effective on April 5, 1995; interim approval

expires April 7, 1997.

(b) Reserved

* * * * *

[FR Doc. 95-5403 Filed 3-3-95; 8:45 am]

BILLING CODE 6560-50-P