Clean Air Act Proposed Approval Of Operating Permits Program; State of Nebraska and the City of Omaha

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5166-4]

Clean Air Act Proposed Approval Of Operating Permits Program;

State of Nebraska and the City of Omaha

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes full approval of the Operating Permit

Programs submitted by the state of Nebraska and city of Omaha for the

purpose of complying with Federal requirements which mandate that

states develop, and submit to EPA, programs for issuing operating

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

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

April 6, 1995.

ADDRESSES Comments should be addressed to Christopher D. Hess at the

address below. Copies of the submittal and other supporting information

used in developing the proposed rule are available for inspection

during normal business hours by contacting: Christopher D. Hess,

Environmental Protection Agency, Air Branch; 726 Minnesota Avenue,

Kansas City, Kansas 66101.

FOR FURTHER INFORMATION CONTACT: Christopher D. Hess at (913) 551-7213.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

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

amended (1990), EPA has promulgated rules which define the minimum

elements of an approvable state operating permits program and the

corresponding standards and procedures by which 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. Title V requires states to develop,

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

major stationary sources and to certain other sources.

The Act requires that states develop and submit these programs to

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

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

program review occurs pursuant to section 502 of the Act which outlines

criteria for approval or disapproval. Where a program substantially,

but not fully, meets the requirements of Part 70, EPA may grant the

program interim approval for a period of up to two years. If EPA has

not fully approved a program by two years after the November 15, 1993,

date, or by the end of an interim program, it must establish and

implement a Federal program.

II. Proposed Action and Implications

A. Analysis of Submission by State and Local Authority

Introduction. What follows are brief explanations indicating how

the submittals meet the requirements of Part 70. The reader may consult

the Technical Support Document (TSD) for a more detailed explanation of

these topics.

1. Support Materials

(1) Governor's Letter. The state of Nebraska has requested approval

of its Title V program. Additionally, the state designated its two

local agencies to administer independent Title V programs and have

requested approval on their behalf. Thus, this action also applies to

the city of Omaha's Title V program. The Lincoln-Lancaster County

Health Department (LLCHD) is addressed in a separate rulemaking action.

The entire geography of Nebraska will be covered by either the state or

an approved local program. The EPA will retain responsibility for the

Title V program on tribal lands in Nebraska. These actions fulfill the

requirements of part 70.4(b).

(2) Regulations. The basic regulatory framework for the operating

permit program is Title 129 Nebraska Air Quality Regulations. The

state's submittal includes a demonstration of the public review and

hearing process involved with the adoption of Title 129. The city of

Omaha has adopted these regulations by reference and provided adequate

demonstration of the required legal authority and public review

process. Both programs also use the Nebraska Environmental Protection

Act and Title 115 Rules of Practice and Procedure.

The initial submittal contained an inadequate definition of

``applicable requirements'' that limited the ability to include all

requirements in the operating permit. This is because the initial

definition stated that ``applicable requirements'' were only those

adopted by the state's Environmental Quality Council. However, in

response to EPA comments, the state modified the regulations in

December 1994, so that Nebraska can require that all ``applicable

requirements'' of the Clean Air Act will be addressed in the permit

process.

As a result, the submittal (as modified) does not identify any

regulatory provisions which would restrict operation of the program.

(3) Attorney General's Legal Opinion. The opinion contains the

elements required by 40 CFR 70.4(b)(3) and demonstrates that there is

adequate authority to meet all Title V requirements. The city of

Omaha's legal opinion incorporates the state's by reference and also

provides adequate legal authority.

2. Implementation

(1) Program Description. A comprehensive plan for implementing the

Title V program was included in each submittal that meets the

requirements of 40 CFR 70.4(b)(1). Each plan identifies appropriate

program authority, agency organization, and staffing. A combination of

approximately 244 major sources have been identified that will require

a Title V permit within both programs' jurisdictions.

These programs have also identified adequate procedures for the

permit application and review process, including inspection and

enforcement provisions. The EPA has determined the outlined processes

are sufficient to ensure effective implementation of the program. An

implementation agreement was not included in either submittal, but the

EPA is encouraging its development in anticipation of program approval.

With respect to the operating permit fee, the city of Omaha has

selected the presumptive minimum plus consumer price index (CPI),

currently $30.07. The state has selected a fee above this amount at

$30.69. These fees will be discussed further under the fee

demonstration section (II., 3.). Both programs will maintain a Class II

program for minor, non-Title V sources.

(2) Program Implementation. Each program is establishing a permit

registry to ensure issuing one-third of all permits in the first year

of the program. This registry also includes a provision to review

permit applications within nine months of receipt for those sources

[[Page 12522]] of hazardous air pollutants participating in the early

reduction program under section 112(i)(5) of the Act.

In terms of initial permit applications, adequate procedures are

outlined to satisfy Part 70 requirements. The application process

includes affected state and EPA review. Each program's procedures and

guidance are designed to ensure that a permit is issued within 18

months of application.

Both programs have established criteria for monitoring source

compliance which include compliance inspections, citizen complaint

responses, follow-up inspections, and permit application review. Each

Title V source will be inspected at least once per year. Surveillance

through monitoring will also be conducted to ensure compliance.

(3) Personnel. Each submittal includes a workload analysis

estimating the number of personnel needed for the Title V program.

Since both the state and the city of Omaha have selected a fee equal to

or greater than the $25 plus CPI as outlined in Part 70, EPA is

presuming that the requirements of Sec. 70.9(b)(1) are met with respect

to personnel. Either agency could be required to provide additional

analysis if comments are received that propose to rebut the presumption

of this Part 70 provision in accordance with Sec. 70.9(5)(ii).

(4) Data Management. All permit application information will be

entered into the state's computer data base and be submitted to the

EPA. The proposed permits will be made available for EPA review. A

permit decision schedule will ensure that a permit is issued within 18

months of initial application.

Each program requires the retention of permit information by the

source for five years. Additionally, each agency has committed to

maintain records for five years in its respective program descriptions.

(5) Applicability Provisions. These programs provide for permitting

of all major sources, affected sources, sources that opt to apply for a

permit, and all sources subject to sections 111 or 112 standards (new

source performance standards and standards for hazardous air

pollutants).

Both the state and the city of Omaha exempt sources that are not

major sources, affected sources, or solid waste incineration units

required to obtain a permit pursuant to section 129(e) of the Act. This

exemption is allowed by Sec. 70.3(b)(1) until the Administrator

completes a rulemaking to determine how the program should be

structured for nonmajor sources.

Since the city of Omaha has incorporated the state's rules by

reference, the above-mentioned items apply to that local Title V

program as well.

(6) Permit Content. Nebraska's regulations require Title V permits

to include Part 70 terms and conditions for all applicable

requirements. These rules also stipulate that the duration of the

permit will be specified in the permit. Both programs also provide for

the inclusion of enhanced monitoring in permits.

Title 129 requires the permit to contain a condition prohibiting

emissions exceeding any allowances that the source lawfully holds under

Title IV of the Act as required by Sec. 70.6(a)(4). The regulations

also meet the requirements of Sec. 70.6(a)(5), Sec. 70.6(a)(6),

Sec. 70.6(a)(7), and Sec. 70.6(a)(8). Part 70 also requires terms and

conditions for reasonably anticipated operating scenarios to be

included in the permit. Title 129 requires that the terms and

conditions of each alternative scenario meet all the requirements of

Part 70. Section 70.6(a)(10) requires the permit to contain terms and

conditions, if the permit applicant requests them, for the trading of

emissions increases and decreases at the facility. Title 129 fulfills

this requirement.

Part 70 also has requirements for the terms and conditions in a

Part 70 permit at Sec. 70.6(b), compliance requirements at

Sec. 70.6(c), and emergency provisions at Sec. 70.6(g). Title 129

complies with these requirements.

Both programs provide for general permits. The director will

identify criteria by which sources may qualify for the general permit

as required by Sec. 70.6(d)(1).

The permitting program can also have provisions for permitting

temporary sources and for permit shields. Title 129 has both of these

options and meets the requirements of Part 70. Title 129 also provides

for operational flexibility and closely follows EPA's requirements.

The program does make provision to exempt the listing of

insignificant activities in permit applications. The state has

submitted a list to EPA that was adopted in December 1994. This list

will be used by the city of Omaha as well.

(7) Permit Applications. Title 129 addresses permit application

requirements in Chapters 5 and 7. Within these rules adequate

procedures are outlined for the following: duty to apply, complete

applications, confidential information, correcting a permit

application, standard forms, and compliance certification. A detailed

analysis of how the submittal meets these Part 70 requirements is

included in the TSD.

(8) Permit Issuance. Title 129 satisfies both the complete and

timely component of section 503 of the Act and 40 CFR 70.5(a). Sources

are required to submit permit applications within 12 months after

becoming subject to the permit program, or on or before some earlier

date established under the state operating permit registry. Source

permit applications must conform to the standard application forms

developed by each of the respective agencies. These applications must

contain information sufficient to determine all applicable requirements

with respect to the applicant. Both submittals demonstrate that a

source will receive a completeness determination within 30 days.

Both programs also require that final action be taken on complete

applications within 18 months of submittal of a complete application,

except for initial permit applications which are subject to the three-

year transition plan set forth by the Clean Air Act Amendments of 1990.

Title 129 requires compliance with public participation procedures,

notification to affected states, compliance with all applicable

requirements, and allows for a 45-day period for EPA objection.

The regulations provide for priority on applications for

construction or modification under an EPA approved preconstruction

review program. The operating permit regulations do not affect the

requirement that any source have a preconstruction permit under an EPA-

approved preconstruction review. The programs also provide that permits

being renewed are subject to the same procedural requirements,

including those for public participation and affected state and EPA

review, that apply to initial permit issuance. Title 129 provides for

administrative amendments which meet the requirements of the Federal

rule.

Permit modification processing procedures are equivalent to Federal

requirements as they provide for the same degree of permitting

authority, EPA, and affected state review and public participation. The

program satisfies all of the Federal minor permit modification

procedures.

The programs provide for promptly sending to EPA any notice that

either agency refuses to accept all recommendations of an affected

state regarding a proposed minor permit modification. In addition, the

programs provide that the permitting authority may approve, but may not

issue, a final permit modification until after EPA's 45-day review

period or until the EPA [[Page 12523]] has notified the permitting

authority that the EPA will not object to issuance, whichever is first.

Title 129 provides for minor permit modification group processing

which meets the Federal criteria. Specifically, any application for

group processing must meet permit application requirements similar to

those outlined in section 70.7(e)(3). The state's rules also provides

for notifying the EPA and affected states of the requested permit

modification within five working days of receipt of an application

demonstrating that the aggregate of a source's pending applications

equals or exceeds the threshold level.

Significant modification procedures are defined in a manner that

parallels Federal provisions. Each agency's program description

provides for completion of review of the majority of significant permit

modifications within nine months after receipt of a complete

application.

a. Permit reopenings. A permit is to be reopened and revised when

additional applicable requirements become applicable to a major source

with a remaining permit term of three or more years, and such a

reopening is to be completed within 18 months after promulgation of the

applicable requirement. In addition, the proceedings to reopen a permit

will follow the same procedures that apply to initial issuance, will

affect only those parts of the permit for which cause to reopen exists,

and will ensure reopenings are made as expeditiously as practicable.

The rule provides that at least 30 days' advance notice must be given

to the permittee for reopenings, and that notice will be given of the

intent to reopen the permit.

b. Off-permit revisions. Both the state and city of Omaha have

elected to not allow off-permit activities.

(9) Compliance Tracking and Enforcement. The requirement for

proposed compliance tracking and enforcement reporting has been met by

both programs. Omaha will provide enforcement information to the state

monthly. The state will then enter information for both agencies into

the Aerometric Information Retrieval System. The proposed enforcement

program will consist of source inspection, surveillance, response to

complaints, permit application review, and enforcement responses.

Proposed enforcement responses include permit modification, permit

revocation, stipulation, administrative orders, injunctive relief,

civil/criminal referral, and referral to the EPA.

(10) Public Participation, EPA and Affected States Review. Both

programs ensure that all permit applications are available to the

public. All requirements are included to ensure that each concerned

citizen will be aware of proposed and final permit actions. This

includes the commitment to keep a record of proceedings that will allow

citizens to object to a permit up to 60 days after the EPA review

period.

Title 129 contains rules that ensure mutual review by affected

states and the EPA. Neither the state nor city of Omaha will issue a

permit when it is objected to in accordance with Sec. 70.8(c).

3. Fee Demonstration

The city of Omaha has elected to collect the presumptive minimum

plus CPI in accordance with Part 70 to cover direct and indirect costs

of developing and administering its program. The state has selected a

fee in the amount of $30.69 which is above the presumptive.

Each program is also required to demonstrate that fees collected

under Title V will be used exclusively for the purpose of Title V. This

is addressed by the state in Nebraska statute 81.1505.01, which states

that any Title V fees collected will be deposited into a designated

account with the State Treasurer. Furthermore, in 81.105.04 the State

Legislature's Appropriations Committee will conduct an annual review to

ensure that all funds have been accounted for appropriately. Omaha has

established a separate accounting structure exclusively for Title V.

Part 70 also requires permitting authorities to submit periodic

accounting reports to EPA. Upon further guidance by EPA, both agencies

will be requested to submit these reports.

Each submittal included an inventory of sources and the amount of

fees that it expects to collect in the first year from each source as

part of their fee demonstration. The state anticipates approximately

$1,765,530 and the city of Omaha anticipates $419,957. Each agency

submitted year-to-year estimates of resources by major activities which

adequately satisfies the four-year projection.

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

(1) Acid rain. The legal requirements for an approval under the

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

guidance distributed on May 21, 1993, entitled ``Title V--Title IV

Interface Guidance for States.'' Each program has met the five major

criteria of this guidance which include legal authority, regulatory

authority, forms, regulatory revisions, and a commitment to acid rain

deadlines. 40 CFR part 72 is adopted by reference.

(2) Section 112. The specific Title V program approval criteria

with respect to section 112 provisions are enumerated in a memorandum

from John Seitz, Office of Air Quality Planning and Standards, dated

April 13, 1993. The state and city of Omaha have met these criteria as

described in the following topics:

a. Section 112(d), (f), and (h).--EPA Emissions Standards. Chapter

8 of Title 129 requires each permit to specify emission limitations and

standards, including those operational requirements and limitations

that ensure compliance with all requirements applicable at the time of

permit issuance. If any applicable requirements have been promulgated

at the Federal level, but not yet adopted by the state or Council, the

director has specific regulatory authority to insert these applicable

requirements into a permit on a case-by-case basis. Chapter 15 requires

a permit to be reopened if a source becomes subject to an additional

applicable requirement and has a remaining permit term of three years

or more.

b. General Provisions. The Seitz memorandum notes that the

implementation of all current National Emission Standards for Hazardous

Air Pollutants standards and future Maximum Achievable Control

Technology (MACT) standards includes the implementation of any

``general provisions'' that EPA develops for these standards. Initial

Title V approval must ensure that states will carry out these

provisions as in effect at the time of any permit issuance or

revisions. The EPA promulgated the general provisions in 40 CFR part

63, Subpart A on March 19, 1994 (59 FR 12407). The state and city of

Omaha intend to adopt all applicable requirements. EPA thus considers

that both programs have met this requirement.

c. Section 112 (g)--Case-by-Case MACT For Modified/Constructed and

Reconstructed Major Toxic Sources. Both programs propose to require

best available control technology for new and modified sources of air

toxics. In the absence of any EPA guidance/regulations defining case-

by-case MACT procedures and methods for determining agency equivalency

of Federal requirements at the time of agency program submittal, the

respective submissions are adequate for the interim. Each agency

intends to adopt Federal air toxic regulations expeditiously.

d. Section 112 (i)(5)--Early Reductions. Both programs have

[[Page 12524]] adequate provisions for implementation of this program

by adopting by reference 40 CFR part 63, Subpart D, early reduction

compliance extension rules, promulgated in the Federal Register on

December 29, 1992. To date, no source in either agency's area has made

a commitment to participate in the early reductions program. Title 129

provides for incorporating alternative emission limits into permits.

e. Section 112(j)--Case-by-case MACT Hammer. Both agencies' intend

to make case-by-case MACT determinations and to issue permits to

subject sources in accordance with the 112(j) requirements. Title 129,

Chapter 7 requires newly subject sources to file a permit application

within 12 months of first becoming operational or otherwise subject to

the title V program. This rule further requires sources subject to

Chapter 28 (MACT) to submit a permit application within 12 months of

becoming operational. The agencies would make their case-by-case MACT

determination after receipt of the permit application and prior to

permit issuance.

f. Section 112(l)--State Air Toxics Programs. The EPA intends to

delegate authority for existing section 112 standards under the

authority of section 112(l) concurrent with approval of the title V

program. Both the state and city of Omaha have requested delegation of

future 112 standards/rules in accordance with the adoption-by-reference

procedures in 40 CFR Part 63, Subpart E, section 63.91. Since section

112(i) (the early reduction rule) has already been adopted by reference

in Title 129, the EPA anticipates delegating this rule concurrent with

title V approval.

g. Section 112(r)--Accidental Release Plans. Title 129 provides for

the section 112(r) requirements in Chapter 8. The permit of a source

subject to the requirements of section 112(r) will contain a

requirement to register the plan, verification of plan preparation and

submittal to the permitting agency, the state Emergency Response

Commission, and any local emergency planning committee; and will

require an annual certification in accordance with Chapter 7, that the

risk management plan is being properly implemented.

The permit application requires a schedule of compliance for

sources that are not in compliance with all applicable requirements at

the time of permit issuance. Requirements for a compliance schedule are

listed in Chapter 8.

B. Options for Approval/Disapproval and Implications

The EPA is proposing full approval of the operating permits program

submitted to EPA for the state of Nebraska and city of Omaha on

November 15, 1993. Both of these agencies have demonstrated that their

programs will be adequate to meet the minimum elements of an operating

permits program as specified in 40 CFR part 70.

Prior to the EPA taking final action on these programs, the state

is required to officially submit the December 2, 1994 amendments to

title 129 and the city of Omaha must incorporate these amendments by

reference and submit them to the EPA. As noted, the EPA has reviewed

these rule amendments and considers them adequate for the title V

program.

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

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

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

Section 112(l)(5) requires that the state and local 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 each program for receiving

delegation of section 112 standards that are unchanged from Federal

standards as promulgated, and to delegate existing standards under 40

CFR parts 61 and 63 for Part 70 sources. Both agencies have informed

EPA that they intend to accept delegation of section 112 standards

through the adoption by reference mechanism. This program for

delegations applies to both existing and future standards for part 70

sources.

Additionally, both agencies have requested delegation of current

and future section 112 standards under section 112(l)(5) and 40 CFR

63.91 for sources not subject to Part 70 requirements. Both have

demonstrated broad legal authority which covers all section 112

sources, and both have demonstrated they have adequate resources to

implement current section 112 standards. With respect to future section

112 requirements, both have committed to provide EPA with future

demonstrations of resource adequacy as necessary when new requirements

are promulgated and the resource burdens associated with those

requirements become known. Both have demonstrated that they will

expeditiously implement section 112 requirements for these sources

pursuant to a schedule after EPA promulgation, and that they have

sufficient enforcement authority to adequately enforce section 112

requirements for all sources.

Therefore, for sources not subject to part 70 requirements, EPA is

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

the state and Omaha's program for receiving delegation of future

section 112 standards that are unchanged from federal standards as

promulgated, and to delegate existing standards under 40 CFR parts 61

and 63 for non-Part 70 sources.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

rule. Copies of either 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 of this proposed rulemaking. The principal purposes of

the docket are:

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

documents for participating in the rulemaking process, and

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

consider any comments received by April 6, 1995.

B. Executive Order 12866

The Office of Management and Budget (OMB) has exempted this action

from Executive Order 12866 review.

C. Paperwork Reduction Act

Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), Federal

agencies must obtain the OMB clearance for collection of information

from 10 or more non-Federal respondents.

D. 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

Air pollution control, Intergovernmental relations, Operating

permits, and Reporting and recordkeeping requirements.

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

[[Page 12525]] Dated: February 13, 1995.

Dennis Grams,

Regional Administrator.

[FR Doc. 95-5517 Filed 3-6-95; 8:45 am]

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