Clean Air Act Proposed Full Approval of Operating Permits Program; Approval of Construction Permit Program Under Section 112(l); State of Utah

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[UT-001; FRL-5176-6]

Clean Air Act Proposed Full Approval of Operating Permits

Program; Approval of Construction Permit Program Under Section 112(l);

State of Utah

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed full approval.

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SUMMARY: The EPA proposes full approval of the Operating Permits

Program submitted by the State of Utah 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. EPA also proposes approval of the Utah Construction Permit

Program under section 112(l) of the Clean Air Act for the purpose of

creating Federally enforceable permit conditions for sources of

hazardous air pollutants listed pursuant to section 112(b) of the Clean

Air Act.

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

April 21, 1995.

ADDRESSES: Comments should be addressed to the contact indicated below.

Copies of the State's submittal and other supporting information used

in developing these proposed approvals are available for inspection

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

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

Denver, Colorado 80202.

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

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

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

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

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

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

promulgated rules which define the minimum elements of an approvable

State operating permits program and the corresponding standards and

procedures by which the EPA will approve, oversee, and withdraw

approval of State operating [[Page 15106]] permits programs (see 57 FR

32250 (July 21, 1992)). These rules are codified at 40 Code of Federal

Regulations (CFR) part 70 (part 70). Title V requires States to

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

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

The Act requires that states develop and submit these programs to

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

each program within 1 year after receiving the submittal. The EPA's

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

70 regulations, which together outline criteria for approval or

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

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

a period of up to 2 years. If EPA has not fully approved a program by 2

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

program, it must establish and implement a Federal program.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials

The Governor of Utah submitted the State of Utah Title V Operating

Permit Program (PROGRAM) to EPA on April 14, 1994. EPA deemed the

PROGRAM administratively and technically complete in a letter to the

Governor dated May 12, 1994. Additional documentation for the PROGRAM

submittal was received on August 25, 1994. The PROGRAM submittal

includes a legal opinion from the Attorney General of Utah stating that

the laws of the State provide adequate legal authority to carry out all

aspects of the PROGRAM, and a description of how the State intends to

implement the PROGRAM. The submittal additionally contains evidence of

proper adoption of the PROGRAM regulations and a permit fee

demonstration.

2. Regulations and Program Implementation

The Utah PROGRAM, including the operating permit regulation (Utah

Administrative Code Rule R307-15, Operating Permit Requirements), meets

the requirements of 40 CFR parts 70.2 and 70.3 with respect to

applicability; parts 70.4, 70.5, and 70.6 with respect to permit

content including operational flexibility; part 70.5 with respect to

complete application forms and criteria which define insignificant

activities; part 70.7 with respect to public participation and minor

permit modifications; and part 70.11 with respect to requirements for

enforcement authority.

R307-15-3 contains the PROGRAM definitions. EPA is aware that other

Utah regulations may contain similar, but not identical, definitions as

those contained in R307-15-3. For purposes of this PROGRAM approval,

EPA wishes to clarify that the binding definitions are those contained

in R307-15-3.

R307-15-5(5) of the State's permitting regulation lists the

insignificant activities that sources do not have to include in their

operating permit application. This list includes specific activities

and sources which are considered to be insignificant. This provision

states that the source's application may not omit information needed to

determine applicable requirements or to evaluate the fee amount

required.

Utah has the authority to issue a variance from requirements

imposed by State law. Section 16-2-113, Utah Code Ann., provides that

any person may apply to the board for a variance from its rules. The

board may grant the requested variance, ``if it determines that the

hardship imposed by compliance would outweigh the benefit to the

public.'' This authority is limited by regulation: Utah Administrative

Code section R307-1-2.3 provides that the board may grant variances to

the extent provided under law, unless prohibited by the Act. Other

statutory provisions of State law require that the operating permit

program must meet the requirements of title V of the Act. See, section

19-2-104(1)(f) and 19-1-109.1 (c)-(d), Utah Code Ann.

In addition to these limitations, EPA regards Utah's variance

provision as wholly external to the PROGRAM submitted for approval

under part 70, and consequently is proposing to take no action on this

provision of State law. EPA has no authority to approve provisions of

State law, such as the variance provision referred to, which are

inconsistent with part 70. EPA does not recognize the ability of a

permitting authority to grant relief from the duty to comply with a

Federally enforceable part 70 permit, except where such relief is

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

variance provision strictly to establish a compliance schedule for a

source that will be incorporated into a title V permit, then EPA would

consider this an acceptable use of a variance provision. However, the

routine process for establishing a compliance schedule is through

appropriate enforcement action. EPA reserves the right to enforce the

terms of the part 70 permit where the permitting authority purports to

grant relief from the duty to comply with a part 70 permit in a manner

inconsistent with part 70 procedures.

Part 70 of the Federal operating permit regulation requires prompt

reporting of deviations from the permit requirements. Section

70.6(a)(3)(iii)(B) of that regulation requires the permitting authority

to define prompt in relation to the degree and type of deviation likely

to occur and the applicable requirements. Although the permit program

regulations should define prompt for purposes of administrative

efficiency and clarity, an acceptable alternative is to define prompt

in each individual permit. The EPA believes that prompt should

generally be defined as requiring reporting within two to ten days of

the deviation. Two to ten days is sufficient time in most cases to

protect public health and safety as well as to provide a forewarning of

potential problems. For sources with a low level of excess emissions, a

longer time period may be acceptable. However, prompt reporting must be

more frequent than the semiannual reporting requirement, given this is

a distinct reporting obligation under section 70.6(a)(3)(iii)(A) of the

Federal operating permit regulation. Where ``prompt'' is defined in the

individual permit but not in the program regulations, EPA may veto

permits that do not contain sufficiently prompt reporting of

deviations. The Utah PROGRAM will define prompt reporting of deviations

in each permit consistent with the degree and type of deviation likely

and the applicable requirements (see subsection R307-15-6(1)(c)(iii)(B)

of the Utah permitting rule). Deviations from permit requirements due

to unavoidable breakdowns shall be reported according to the

unavoidable breakdown provisions of the Utah Administrative Code

section R307-1-4.7.

R307-15-7(4)(a)(ii) allows for emissions trading within a permitted

facility where the State Implementation Plan (SIP) allows for such

emissions trades without requiring a permit revision, consistent with

40 CFR 70.4(b)(12)(ii). However, the approved Utah SIP does not provide

for such trading at this time.

R307-15-7(5)(a)(v) correctly allows the State to incorporate the

terms of a construction permit (i.e., an ``approval order'') into an

operating permit using the administrative permit amendment process.

This process will be available when a source requests enhanced

procedures in the issuance of its construction permit that are

``substantially equivalent'' to the operating permit issuance or

[[Page 15107]] modification procedures. ``Substantial equivalence''

between the construction permit and operating permit issuance

procedures necessarily includes, among other things, public and

affected state review as well as EPA's 45-day review period and veto

authority.

Comments noting deficiencies in the Utah PROGRAM were sent to the

State in a letter dated October 28, 1994. The deficiencies were

segregated into those that require corrective action prior to interim

PROGRAM approval, and those that require corrective action prior to

full PROGRAM approval. In a letter dated November 30, 1994, the State

committed to complete the corrective actions required for interim

PROGRAM approval. The Utah Air Quality Board adopted amendments to

R307-15 on February 23, 1995 which adequately addressed all

deficiencies identified in the PROGRAM regulations. A letter from the

Attorney General's office dated February 27, 1995 transmitted these

regulation changes, which become effective April 15, 1995. The changes

that addressed the deficiencies in the PROGRAM summary were transmitted

to EPA by the State in a letter dated February 28, 1995.

Refer to the Technical Support Document accompanying this

rulemaking for a detailed explanation of each PROGRAM deficiency and

the corrective actions completed by the State.

3. Permit Fee Demonstration

The State of Utah established an initial fee for regulated air

pollutants below the presumptive minimum set in title V, section 502

and part 70, and was required to submit a detailed permit fee

demonstration as part of its PROGRAM submittal. The basis of this fee

demonstration included a workload analysis, which estimated the annual

cost of running the PROGRAM in fiscal year (FY) 1995 to be $2,386,895

based on the estimated direct and indirect costs of the PROGRAM, and a

projected emission inventory for fiscal year 1995. The permit fee

established for FY 1995 is $21.70 per ton of actual emissions of a

regulated pollutant, with an emissions cap of 4,000 tons per year per

pollutant. This fee structure will be reevaluated each year. After

careful review, the State of Utah has determined that these fees would

support the Utah PROGRAM costs as required by section 70.9(a) of the

Federal operating permit regulation. Upon review of this demonstration,

the EPA noted the following concern: State law generally provides

authority to assess and collect annual permit fees in an amount

sufficient to cover all reasonable direct and indirect costs of the

program. However, section A.1 of the PROGRAM description found in

volume 1, part II.A., of the State's title V submittal indicates that

the Utah Legislature must authorize permit fees on a yearly basis. If

permit fees sufficient to fund all the costs of the PROGRAM are not

authorized, and the State is not able to fully implement the PROGRAM,

then EPA would be required to disapprove or withdraw the part 70

program, impose sanctions, and implement a Federal permitting program.

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

a. Authority and/or Commitments for Section 112 Implementation.

Utah has demonstrated in its PROGRAM submittal adequate legal authority

to implement and enforce all section 112 requirements through the title

V permit. This legal authority is contained in Utah's enabling

legislation and in regulatory provisions defining ``applicable

requirements'' and stating that the permit must incorporate all

applicable requirements. EPA has determined that this legal authority

is sufficient to allow Utah to issue permits that assure compliance

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

activities. For further rationale on this interpretation, please refer

to the Technical Support Document accompanying this rulemaking and the

April 13, 1993 guidance memorandum titled ``Title V Program Approval

Criteria for Section 112 Activities,'' signed by John Seitz, Director

of the Office of Air Quality Planning and Standards.

b. Implementation of Section 112(g). On February 14, 1995 EPA

published an interpretive notice (see 60 FR 8333) that postpones the

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

addressing that provision. 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), Utah must be

able to implement section 112(g) during the period between promulgation

of the Federal section 112(g) rule and adoption of implementing State

regulations. EPA believes that Utah can utilize its construction review

program to serve as a procedural vehicle for implementing section

112(g) and making these requirements Federally enforceable between

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

implementing State regulations. For this reason, EPA is proposing to

approve Utah's construction permitting program found in section R307-1-

3 of the State's regulations under the authority of title V and part 70

solely for the purpose of implementing section 112(g) during the

transition period to meet the requirements of section 112(g). Since the

approval would be for the single purpose of providing a mechanism to

implement section 112(g) during the transition period, the approval

would 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. Also, since the approval would be for

the limited purpose of allowing the State sufficient time to adopt

regulations, EPA proposes to limit the duration of the approval to 12

months following promulgation by EPA of its section 112(g) rule. Utah's

construction permitting program allows permit requirements to be

established for all air contaminants (which is defined in R307-1-1 of

the Utah Administrative Code and includes all of the hazardous air

pollutants (HAPs) listed in section 112(b) of the Act).

c. Program for Straight Delegation of Section 112 Standards.

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

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

of the provisions of 40 CFR part 63, Subpart A, and section 112

standards promulgated by EPA as they apply to part 70 sources, as well

as non-part 70 sources. Section 112(l)(5) requires that the State's

program contain adequate authorities, adequate resources for

implementation, and an expeditious compliance schedule, which are also

requirements under part 70. Therefore, EPA is also proposing to grant

approval under section 112(l)(5) and 40 CFR part 63.91 of the State's

program for receiving delegation of section 112 standards that are

unchanged from the Federal standards as promulgated. Utah has informed

EPA that it intends to accept delegation of section 112 standards

through incorporation by reference. This program applies to both

existing and future standards.

The radionuclide national emission standard for HAPs (NESHAP) is a

section 112 regulation and an applicable requirement under the State

PROGRAM. Currently the State of Utah has no part 70 sources which emit

radionuclides. However, sources which are not currently part 70 sources

may be [[Page 15108]] defined as major and become part 70 sources under

forthcoming Federal radionuclide regulations. In that event, the State

will be responsible for issuing part 70 permits to those sources.

d. Approval of Construction Permit Program Under Section 112(l).

Also in this action, EPA is proposing to approve Utah's construction

permit program in R307-1-3.1 of the State's regulations under the

authority provided in section 112(l) of the amended Act for the purpose

of creating Federally enforceable permit conditions for sources of HAPs

listed pursuant to section 112(b) of the Act. The State's construction

permitting rules referenced above were approved by EPA as part of the

SIP on February 19, 1980 (45 FR 10761-10765). Approval of the State's

construction permit program under section 112(l) is necessary to allow

the State to create Federally enforceable limits on the potential to

emit of HAPs, because SIP approval of the State's construction permit

rules only extends to the control of HAPs which are photochemically

reactive organic compounds or particulate matter. Federally enforceable

limits on photochemically reactive organic compounds or particulate

matter may have the incidental effect of limiting certain HAPs. As a

legal matter, no additional program approval by the EPA is required in

order for those ``criteria'' pollutant limits to be recognized as

Federally enforceable. However, section 112 of the Act provides the

underlying authority for controlling all HAP emissions.

The State's construction permit program applies to new and modified

sources which would emit ``air contaminants,'' which is defined in the

State's rules as ``any particulate matter or any gas, vapor, suspended

solid or any combination of them, excluding steam and water vapors.''

The State has defined ``air contaminant'' in such a broad manner that

it includes HAPs. Consequently, the State's construction permit program

provides authority for the State to issue construction permits to

sources of HAPs.

The criteria used in approving Utah's construction permit program

in the SIP are located in 40 CFR 51.160-164. As detailed in the

Technical Support Document accompanying this notice, EPA believes the

State's construction permit program meets the requirements of 40 CFR

51.160-164. EPA believes the most significant criteria in 40 CFR Part

51 for creating Federally enforceable limits through construction

permits are those in 40 CFR 51.160-162. Further, as discussed in EPA's

January 25, 1995 memorandum from John S. Seitz, Director of the Office

of Air Quality Planning and Standards, and Robert I. Van Heuvelen,

Director of the Office of Regulatory Enforcement, entitled ``Options

for Limiting the Potential to Emit of a Stationary Source Under Section

112 and Title V of the Clean Air Act,'' in order for EPA to consider

any construction permit terms Federally enforceable, such permit

conditions must be enforceable as a practical matter. Utah's program

will allow the State to issue permits that are enforceable as a

practical matter. Thus, any permits issued in accordance with the Utah

program and which are practically enforceable would be considered

Federally enforceable.

In addition to meeting the criteria discussed above, a construction

permit program for HAPs must meet the statutory criteria for approval

under section 112(l)(5) of the Act. This section allows EPA to approve

a program only if it: (1) Contains adequate authority to assure

compliance with any section 112 standards or requirements; (2) provides

for adequate resources to implement the program; (3) provides for an

expeditious schedule for assuring compliance with section 112

requirements; and (4) is otherwise likely to satisfy the objectives of

the Act.

The EPA plans to codify the approval criteria for programs limiting

the potential to emit of HAPs through amendments to Subpart E of 40 CFR

part 63, the regulations promulgated to implement section 112(l) of the

Act. EPA believes it has the authority under section 112(l) to approve

programs to limit potential to emit HAPs directly under section 112(l)

prior to this revision to Subpart E of 40 CFR part 63. Given the timing

problems posed by impending deadlines under section 112 and title V,

EPA believes it is reasonable to read section 112(l) to allow for

approval of programs to limit potential to emit prior to issuance of a

rule specifically addressing this issue. The EPA is therefore proposing

approval of Utah's construction permit program to limit the potential

to emit of HAPs now, so that the State may begin to issue Federally

enforceable synthetic minor permits as soon as possible. The EPA also

plans to codify programs approved under section 112(l) without further

rulemaking once the revisions to Subpart E are promulgated.

As discussed above, Utah's construction permit program in R307-1-

3.1 has already been approved in the SIP, and it satisfies the criteria

for such programs, including the relevant criteria related to creating

Federally enforceable limits in 40 CFR 51.160-162. In addition, Utah's

construction permit program meets the statutory criteria for approval

under section 112(l)(5), as follows:

Regarding the statutory criteria of section 112(l)(5) referred to

above, EPA believes Utah's construction permit program contains

adequate authority to assure compliance with section 112 requirements

because the State's program does not provide for the waiver of any

section 112 requirement. Sources that become minor through a permit

issued pursuant to the State's construction permit program would still

be required to meet section 112 requirements applicable to non-major

sources.

Regarding the requirement for adequate resources, the State has

committed in its SIP to provide adequate resources for all program

activities required by the annual State/EPA agreement, which includes

construction permitting. Thus, EPA believes the State has adequate

resources to support the construction permit program for HAPs, and EPA

will monitor the State's implementation of the program to assure that

adequate resources continue to be available.

The EPA also believes that the State's rules provide for an

expeditious schedule for assuring compliance with section 112

requirements. A source seeking a voluntary limit on its potential to

emit is probably doing so to avoid a Federal requirement applicable on

a particular date. Nothing in the State's program would allow a source

to avoid or delay compliance with the Federal requirement if it fails

to obtain the appropriate Federally enforceable limit by the relevant

deadline.

Finally, EPA believes it is consistent with the intent of section

112 of the Act for States to provide a mechanism through which sources

may avoid classification as a major source by obtaining a Federally

enforceable limit on potential to emit.

Accordingly, EPA believes that Utah's construction permit program

in R307-1-3.1 of its air quality regulations satisfies the applicable

criteria for establishing Federally enforceable limitations for sources

of HAPs. Therefore, EPA is proposing approval of Utah's construction

permit program in R307-1-3 of the State's rules under section 112(l) of

the Act.

Refer to the Technical Support Document accompanying this

rulemaking for a detailed explanation of this approval under section

112(l) of the Act.

e. Program for Implementing Title IV of the Act. Utah's PROGRAM

contains adequate authority to issue permits which reflect the

requirements of Title [[Page 15109]] IV of the Act, and Utah commits to

adopt the rules and requirements promulgated by EPA to implement an

acid rain program through the title V permit.

B. Proposed Action

EPA is proposing full approval of the operating permits program

submitted to EPA by the State of Utah on April 14, 1994. Among other

things, Utah has demonstrated that the PROGRAM will be adequate to meet

the minimum elements of a State operating permits program as specified

in 40 CFR part 70. EPA also proposes approval of the Utah Construction

Permit Program found in section R307-1-3 of the State's regulations

under section 112(l) of the Act for the purpose of creating Federally

enforceable permit conditions for sources of hazardous air pollutants

listed pursuant to section 112(b) of the Act, and, under the authority

of title V and 40 CFR part 70, for the purpose of providing a mechanism

to implement section 112(g) of the Act during any transition period

between EPA's promulgation of a section 112(g) rule and adoption by the

State of rules to implement section 112(g).

In Utah's part 70 program submission, the State indicated that it

is not seeking approval from EPA to administer the State's part 70

PROGRAM within the exterior boundaries of Indian Reservations in Utah.

In this notice, EPA proposes to approve Utah's part 70 PROGRAM for all

areas within the State except the following: lands within the exterior

boundaries of Indian Reservations (including the Uintah and Ouray,

Skull Valley, Paiute, Navajo, Goshute, White Mesa, and Northwestern

Shoshoni Indian Reservations) and any other areas which are ``Indian

Country'' within the meaning of 18 U.S.C. 1151 (excepted areas).

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

sources located in the excepted areas, EPA is not making a

determination that the State either has adequate jurisdiction or lacks

jurisdiction over such sources. Should the State of Utah choose to seek

program approval within these areas, it may do so without prejudice.

Before EPA would approve the State's part 70 PROGRAM for any portion of

the excepted areas, EPA would have to be satisfied that the State has

authority, either pursuant to explicit Congressional authorization or

applicable principles of Federal Indian law, to enforce its laws

against existing and potential pollution sources within any

geographical area for which it seeks program approval and that such

approval would constitute sound administrative practice.

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

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

of section 112 standards as promulgated by EPA as they apply to part 70

sources. Section 112(l)(5) requires that the State's program contain

adequate authorities, adequate resources for implementation, and an

expeditious compliance schedule, which are also requirements under part

70. Therefore, EPA is also proposing to grant approval under section

112(l)(5) and 40 CFR part 63.91 of the State's program for receiving

delegation of section 112 standards that are unchanged from Federal

standards as promulgated. This program for delegations applies to

sources covered by the part 70 program, as well as non-part 70 sources.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed full

approval. Copies of the State's submittal and other information relied

upon for the proposed title V and section 112(l) approvals 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 these proposed

approvals. The principal purposes of the docket are:

(1) to allow interested parties a means to identify and locate

documents so that they can effectively participate in the approval

process, and

(2) to serve as the record in case of judicial review. The EPA will

consider any comments received by April 21, 1995.

B. Executive Order 12866

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

C. Regulatory Flexibility Act

EPA's actions under section 502 and section 112(l) 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 and

the creation of Federally enforceable permit conditions for sources of

hazardous air pollutants listed pursuant to section 112(b) of the Act.

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. sections 7401-7671q.

Dated: March 14, 1995.

William P. Yellowtail,

Regional Administrator.

[FR Doc. 95-7063 Filed 3-21-95; 8:45 am]

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