Operating Permits Program Interim Approval Criteria

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[FRL-5521-4]

RIN 2060-AF70

Operating Permits Program Interim Approval Criteria

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is promulgating revisions to the interim approval

criteria within the regulations in part 70, chapter I, title 40, of the

Code of Federal Regulations (CFR). Part 70 contains regulations

requiring States to develop, and submit to EPA for approval, programs

for issuing operating permits to major, and certain other, stationary

sources of air pollution as required by title V of the Clean Air Act

(Act). Two changes to the interim approval criteria were proposed on

August 29, 1994 to address difficulties in program development that

have occurred since promulgation of part 70. Today's action finalizes

one of those changes; the other will be finalized in a subsequent

action.

As a result of today's revision to part 70, certain State operating

permit programs will become eligible for interim program approval.

Without today's changes, these programs would not have been eligible

for interim program approval under the part 70 regulations.

Specifically, interim approval may now be granted for programs which do

not provide for the incorporation of terms contained in permits issued

under EPA-approved minor source preconstruction permit programs into

corresponding part 70 permits.

To be eligible for this interim approval, such programs would have

to show compelling reasons for the interim approval and meet certain

other requirements regarding the content of part 70 permits that

exclude these applicable preconstruction permit terms during the 2-year

interim period. After 2 years, interim approval expires and the State

must have revised its program to address the exclusion of these terms,

and any other deficiencies, in order to receive full approval.

EFFECTIVE DATE: July 22, 1996.

FOR FURTHER INFORMATION CONTACT: Michael Ling (telephone number 919-

541-4729), U. S. Environmental Protection Agency, Office of Air Quality

Planning and Standards, Information Transfer and Program Integration

Division, Mail Drop 12, Research Triangle Park, North Carolina 27711.

SUPPLEMENTARY INFORMATION:

Regulated Entities

Entities potentially regulated by this action are those State,

local, or tribal governments who seek approval of their part 70

operating permit programs, but whose programs do not include minor

preconstruction permit terms in their part 70 permits. Regulated

categories include:

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Examples of regulated

Category entities

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State/Local/Tribal Government............. Governments who have

developed operating permit

programs that exclude minor

NSR terms from title V

permits and who seek EPA

approval of such programs

under the part 70

regulations.

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This table is not intended to be exhaustive, but rather provides a

guide for readers regarding entities likely to be regulated by this

action. This table lists the types of entities that EPA is now aware

could potentially be affected by this action. If you have questions

regarding the applicability of this action to a particular entity,

consult the person listed in the preceding FOR FURTHER INFORMATION

CONTACT section.

Docket

Supporting information used in developing the part 70 rules,

including today's promulgated change, is contained in docket number A-

93-50. This docket is available for public inspection and copying

between 8:30 a.m. and 3:30 p.m. Monday through Friday, at EPA's Air

Docket, Room M-1500, Waterside Mall, 401 M Street SW, Washington, D.C.

20460. A reasonable fee may be charged for copying.

I. Background and Purpose

A. Introduction

Title V of the Clean Air Act Amendments of 1990 (1990 Amendments),

Public Law 101-549, requires EPA to promulgate regulations establishing

the requirements for development and submittal of State operating

permit programs and the minimum elements these programs must contain to

be approvable. On July 21, 1992, EPA published regulations meeting

these requirements in the Federal Register (57 FR 32250).

Title V and the part 70 regulations require States and local

agencies to submit operating permit programs to EPA within 3 years of

enactment of the 1990 Amendments, and require EPA to take action within

1 year of program submittal to approve or disapprove these programs.

Section 502(g) of the Act allows EPA to grant interim approval to a

program if it ``substantially meets'' the requirements of title V but

is not fully approvable. Interim approval may be granted for a period

of up to 2 years and may not be renewed. The interim approval provision

allows permitting authorities time to correct the program deficiencies

preventing full approval. The minimum elements that a program must

contain to be eligible for interim approval are contained in

Sec. 70.4(d).

The EPA proposed two changes to the interim approval criteria on

August 29, 1994 (59 FR 44571). The first change would allow interim

approval for part 70 programs which allow permits to be revised through

the minor permit modification procedure to reflect those changes at a

facility which is subject to EPA-approved minor source preconstruction

permit requirements, commonly referred to as ``minor new source

review'' (minor NSR) changes. Because this proposal is linked to

proposed changes to the permit revision system, which EPA is not yet

ready to finalize, and because current EPA policy already allows for

approval of programs which allow changes established through minor NSR

to be addressed using minor permit modification procedures, EPA is not

taking final action on this proposed change in today's rulemaking.

The second proposed change to the interim approval criteria

addresses programs that do not incorporate terms and conditions into a

source's part 70 permit which are established through an EPA-approved

minor NSR program.

[[Page 31444]]

Title V and part 70 require a permit to contain provisions which assure

compliance with all applicable requirements (section 502(b)(5)(A) of

the Act, 40 CFR 70.6(a)). The definition of the term ``applicable

requirement'' in part 70 includes requirements established through

minor NSR permitting procedures (Sec. 70.2). The proposed change to

part 70 would, for the period of interim approval, allow part 70

permits to be issued and revised without incorporating those terms and

conditions that are applicable requirements solely because they are

established through minor NSR. These minor NSR terms and conditions

would still remain federally enforceable through the provisions of the

minor NSR program. In today's notice, EPA is taking final action on

this proposed rule change.

B. Summary of Proposed Changes Addressing Applicable Requirements

The August 29, 1994 proposal noted that, in order to be eligible

for interim approval, a program must contain adequate authority to

issue permits that assure compliance with all applicable requirements

including all applicable requirements under title I of the Act [see

Sec. 70.4(d)(3)(ii) and Sec. 70.4(c)(1)]. The proposal explained that

EPA believes the term ``applicable requirements'' clearly includes all

terms and conditions of minor NSR permits. Therefore, a part 70 program

that would not provide for incorporating into permits those

requirements established through the EPA-approved minor NSR program

would be prohibited by Sec. 70.4(d)(3)(ii) from receiving interim

approval.

One State, Texas, argued that there are compelling reasons

supporting its exclusion of minor NSR requirements as title V

applicable requirements, and that its submitted part 70 program should

thus be eligible for approval. Although EPA reads Sec. 70.2 and

Sec. 70.6(a)(1) to unequivocally require minor NSR terms to be

applicable requirements (meaning that the submitted Texas program could

not obtain full approval), the Agency proposed that Texas'

demonstration of compelling reasons warranted further consideration of

the submitted program for interim approval on the basis that it

substantially meets the requirements of title V. Texas' demonstration

of compelling reasons included the following arguments: (1) Texas'

existing minor NSR program is so stringent that the integration of all

its minor NSR terms would be infeasible and unnecessary for

environmental protection; (2) Texas has an exceptionally large number

of part 70 sources which are candidates for minor NSR, making part 70

permitting difficult and time-consuming; and (3) Texas believes that

its system of cross-referencing minor NSR permits in part 70 permits

will serve essentially the same program purposes as inclusion of the

minor NSR requirements themselves, rendering direct inclusion of these

requirements unnecessary from Texas' viewpoint.

On the basis of this type of showing, EPA proposed to consider

interim approval for programs facing significant minor NSR/part 70

integration difficulties. The proposal further provided that, for a

program operating under this type of interim approval: (1) Each part 70

permit issued during the interim approval must (if applicable) state

that applicable minor NSR requirements are not included; (2) each minor

NSR permit containing requirements applicable to the source must be

cross-referenced in the source's part 70 permit so that citizens may

access and review those requirements; (3) excluded minor NSR

requirements would not be eligible for the permit shield under

Sec. 70.6(f); and (4) upon conversion to full approval, all permits

issued during the interim approval period that excluded minor NSR terms

would have to be reopened to include these terms.

Although the exclusion of minor NSR means that important title V

compliance measures (e.g., compliance certification, public review,

etc.) will be deferred for 2 years for minor NSR terms, the proposed

provisions would limit the scope and duration of the effects of this

deferral, and would assure that the public could examine, in federally-

enforceable NSR permits, any terms which are not subject to title V's

compliance measures during the interim period. This helps strengthen

the proposal's position that programs which exclude minor NSR terms

could ``substantially meet'' the requirements of part 70 and receive

interim approval. However, EPA reiterates that all compliance measures

contained in title V must be applied to all applicable requirements,

including minor NSR terms, before a part 70 program can receive full

approval.

II. Discussion of Today's Action

A. Summary of Changes Since Proposal

In response to comments, EPA is making three minor rule changes to

clarify the requirements discussed in the proposal preamble. These

include: (1) Adding rule language clarifying that any excluded NSR

permits must be cross-referenced in the applicable part 70 permit; (2)

adding rule language clarifying that excluded NSR requirements would

not be eligible for the permit shield under Sec. 70.6(f); and (3)

adding rule language clarifying that, upon conversion to full approval,

permits issued during the interim period would have to be revised or

reopened to include any excluded minor NSR terms. Regarding reopening,

today's rule also provides for a streamlined reopening process for

excluded minor NSR terms that does not require the full permit issuance

process. The rule provisions are also being rearranged into separate

paragraphs in the final rule for clarity. In addition to these rule

clarifications, the EPA also reiterates in today's preamble its

position that minor NSR is an applicable requirement for part 70

purposes. Additional discussion is also provided on the proposed

``compelling reasons'' demonstration requirement being promulgated

today.

B. Significant Comments and Responses

The August 29, 1994 proposal concerning interim approval criteria

was grouped with a larger proposal revising the part 70 permit revision

system (published separately at 59 FR 44459). The EPA received a total

of 246 comment letters on these two proposals, some of which addressed

each action separately and some of which addressed both actions

together. This section addresses only the major comments received on

the proposed revision to the interim approval criteria regarding minor

NSR as an applicable requirement. Discussion of additional issues

raised by the commenters related to today's action is contained in the

technical support document for this rule, which is included in the

docket for today's rulemaking. Comments on other proposed changes to

the interim approval criteria not addressed by today's rule change,

including comments on other aspects of the August 1994 proposals (as

well as the August 31, 1995 proposal which supplemented the August 1994

notice on permit revisions), will be addressed in a future rulemaking.

1. Minor NSR as an Applicable Requirement

Several commenters asserted that revisions to the interim approval

criteria are unnecessary because minor NSR is not an ``applicable

requirement'' under part 70. The EPA notes that it has the authority to

promulgate this revision to the interim approval criteria regardless of

the correctness of the assertion that minor NSR is not an applicable

requirement. However, EPA also

[[Page 31445]]

disagrees with the commenters' assertion, and stands by the position

and the rationale articulated in the proposal, that minor NSR is an

applicable requirement. Key points of this rationale are reiterated

below in response to comments received, and are discussed further in

the technical support document found in the docket.

One commenter disagreed with EPA's reading of the part 70

definition of ``applicable requirement,'' noting that something is not

necessarily an ``applicable requirement'' simply because it is a

requirement of the Act. The EPA agrees with this broad statement,

noting--for example--that requirements of title II are not ``applicable

requirements.'' However, EPA sees no basis for concluding that minor

NSR permits issued under a State implementation plan (SIP) approved

program are not applicable requirements. Furthermore, as explained in

the proposal preamble, EPA believes the part 70 rule is clear in

defining ``applicable requirements'' to include minor NSR. A challenge

to this point should have been raised in the context of the July 21,

1992 promulgation of part 70.

Another commenter argued more broadly that the intent of the Act is

to regulate major sources while allowing States to regulate minor

sources through minor NSR programs. The EPA disagrees. Section

110(a)(2)(c) of the Act and EPA's regulations at 51.161 clearly

establish Federal requirements for preconstruction review of activities

below the NSR major source applicability thresholds. The EPA further

disagrees with this commenter's assertion that its argument is

supported by EPA's proposed resolution of the ``title I modifications''

issue. A determination by EPA that ``title I modifications'' do not

include minor NSR actions does not mean that minor NSR programs are

optional under the Act.

A commenter also noted that many State minor NSR programs go beyond

the Federal minimum, and that a detailed analysis would be necessary to

determine the precise extent to which a minor NSR program is necessary

to attain and maintain the national ambient air quality standards

(NAAQS). The EPA disagrees that any such analysis is necessary or

appropriate. A State that submitted a minor NSR program for approval

into the SIP presumably did so because it believed that the submitted

program was necessary to attain and maintain the NAAQS. The EPA

believes this is the only reasonable presumption that can be made in

retrospect.

Although EPA reiterates that minor NSR terms are applicable

requirements, EPA also recognizes that certain terms found in existing

NSR permits (including minor NSR permits) may be obsolete, extraneous,

environmentally insignificant, or otherwise not required as part of the

SIP or a federally-enforceable NSR program. Inclusion of these terms in

a part 70 permit could present program implementation difficulties and

is not needed to fulfill the purposes of the Act. Noting this, EPA

issued a policy addressing incorporation of these permit terms into

part 70 permits. This policy is described in ``White Paper for

Streamlined Development of Part 70 Permit Applications, July 10, 1995''

(White Paper). The White Paper states that, although minor NSR permit

terms are applicable requirements, the permitting authority may use a

joint title V/NSR ``parallel process'' to make appropriate revisions to

an NSR permit to exclude NSR terms which are obsolete, unrelated to

attainment and maintenance of a NAAQS, extraneous, or otherwise

environmentally insignificant. By revising the underlying NSR permit to

delete, revise, or designate as State-only these unnecessary minor NSR

permit terms, the permit authority has discretion to exclude these

terms from the set of federally-enforceable minor NSR conditions, and

thus from the definition of ``applicable requirement'' for part 70

purposes.

The EPA notes that programs which exclude minor NSR as an

applicable requirement under today's approach to interim approval, and

which seek to streamline minor NSR permits using a White Paper

approach, would not need to have revised existing minor NSR permits in

this way until conversion to full approval, because these programs will

not include minor NSR terms in part 70 permits until that time.

However, programs considering this type of parallel processing are

encouraged to consult the White Paper and begin this permit revision

process, so that the task of streamlining minor NSR permits does not

conflict with other permit authority responsibilities at the time full

approval is received.

2. Demonstration of ``Compelling Reasons''

The proposal allows EPA to grant interim approval to part 70

programs that do not include minor NSR as an applicable requirement

upon a showing by the permitting authority of ``compelling reasons''

which support the interim approval. One commenter stated that the

requirement for compelling reasons is unworkable and should be deleted,

and that EPA does not provide guidance on what constitutes compelling

reasons. The EPA disagrees that the compelling reasons requirement

should be deleted, and does not believe that additional guidance on

compelling reasons is necessary for reasons explained below.

The EPA believes it is important to include a requirement that a

State demonstrate compelling reasons to grant interim approval if a

part 70 program excludes minor NSR from the definition of ``applicable

requirement.'' The EPA believes, in general, that an interim approval

on this basis is undesirable because it delays the implementation of

title V for a large number of Act requirements at a large number of

sources, and is a significant departure from the part 70 regulations.

The Agency believes that this type of departure should be made only for

those programs that demonstrate a strong need for the interim exclusion

of minor NSR. Therefore, the Agency is requiring that such programs

demonstrate compelling reasons for granting the interim approval.

Two commenters also asserted that EPA has no basis under the Act to

require States to show compelling reasons for granting interim

approval; EPA disagrees. Section 502(g) of the Act gives EPA broad

discretion as to when and how it grants interim approval. This

discretion includes requiring that a State show compelling reasons

before making significant departures from part 70. The commenters

presented no basis, nor does EPA see any reason, to remove the

``compelling reasons'' requirement.

The ``compelling reasons'' demonstration should be based primarily

on a showing that extraordinary difficulties would be encountered in

incorporating minor NSR terms into initial title V permits. It is also

appropriate to include in the demonstration any measures the State is

taking in its interim part 70 program to support the implementation of

the excluded minor NSR program. The EPA reserves its discretion to

evaluate demonstrations of compelling reasons on a case-by-case basis,

with consideration given to the degree of the minor NSR/title V

integration difficulties and the extent to which the State part 70

program addresses minor NSR implementation in the interim. Because of

the case-by-case nature of such decisions, EPA cannot provide

prescriptive criteria for the compelling reasons demonstration.

The Texas demonstration of compelling reasons, described in the

August 1994 proposal, is an example of

[[Page 31446]]

the type of demonstration that could be considered for interim approval

under today's rule. Texas argued that: (1) Its minor NSR program is so

stringent that integration of all minor NSR terms would be infeasible;

(2) it has an exceptionally large number of part 70 sources which

receive minor NSR; and (3) its part 70 program would cross-reference

minor NSR permits in part 70 permits (i.e., identifies in each part 70

permit the applicable minor NSR permits, but does not incorporate by

reference the requirements of minor NSR into the part 70 permit).

Although EPA does not believe that the existence of a stringent

minor NSR program justifies exclusion of minor NSR from a title V

program, the Agency acknowledges that a program such as Texas' does

produce an extremely large number of minor NSR permits, because of both

its inclusive applicability provisions and because of the large number

of facilities statewide. Thus, integration of minor NSR permits into

initial title V permits presents significant difficulty in Texas.

Similarly, although EPA does not believe that simply cross-referencing

minor NSR permits satisfies title V, EPA acknowledges that the cross-

referencing requirement in Texas' part 70 program serves to provide

additional notice in part 70 permits when minor NSR applies to a

facility. Although this measure falls short of the permit content

requirements of a fully-approvable title V program, EPA believes it is

appropriate for a State to reference such measures in its compelling

reasons demonstration. Therefore, because of the combination of

integration difficulties and program measures, EPA would consider such

a program for interim approval. The EPA notes that today's notice is

not intended to present the Agency's position as to whether Texas'

compelling reasons demonstration (together with the rest of its

program) warrants interim approval under the revised criteria. Rather,

today's rule simply provides for the possibility that such a program

could be considered for interim approval in light of the fact that it

excludes minor NSR terms from part 70 permits.

In addition to requiring a showing of compelling reasons, the

proposal preamble noted that EPA will consider the following as factors

against this type of interim approval: (1) Whether a program's

exclusion of minor NSR terms will diminish the effectiveness of the

State's minor NSR program during the interim period; and (2) whether

the State has already submitted a part 70 program that included minor

NSR as an applicable requirement. It is recommended that States

considering excluding minor NSR as an applicable requirement carefully

consider whether, in light of these factors, its reasons for the

exclusion truly constitute a compelling need. Such States should also

consider whether the time delays in program approval associated with

necessary program changes and the development of a case-by-case

analysis of compelling reasons are worth the interim relief that may be

achieved through the temporary exclusion of minor NSR from title V

permitting.

3. Incorporation of Minor NSR on Transition to Full Approval

The proposal preamble noted that a part 70 program which does not

incorporate minor NSR as an applicable requirement must, upon

conversion from interim to full approval, provide for the reopening of

permits issued during the interim period in order to include the

excluded minor NSR requirements in each part 70 permit. Three

commenters stated that such a reopening would be unnecessary and

impractical. The commenters were concerned about the timing and impact

of the resource burden imposed on sources and on permitting authorities

by the reopening process, which, in accordance with Sec. 70.7(f)(2),

must follow the same procedural requirements as permit issuance. They

felt that reopening was an unnecessary procedural burden with little

environmental benefit and believed that minor NSR terms could be

included at renewal, rather than reopening, with little adverse impact.

While EPA is sensitive to resource concerns, the Agency does not

agree that these concerns should result in exclusion of minor NSR terms

from title V permits until renewal. The EPA, in proposing to allow this

type of interim approval, did not contemplate that minor NSR applicable

requirements could be excluded until renewal, which could be up to 5

years after full program approval. Furthermore, part of the rationale

for granting interim approval is that the excluded minor NSR terms are

subject to other safeguards in the part 70 regulations. One such

safeguard is the reopening of permits when interim approval expires to

incorporate excluded applicable requirements. Without such a safeguard,

minor NSR terms would not be subject to key provisions of title V, such

as annual compliance certification, recordkeeping and reporting, and

other similar requirements, for up to 5 years.

The EPA does agree that, if reopenings to incorporate excluded

minor NSR permits must follow the same procedural requirements as full

permit issuance, the process of reopening each permit issued during the

interim approval period could impose considerable administrative burden

at a time when the permitting authority is still also processing

initial permit applications. This burden is greatly mitigated in Texas

where the earliest permits, and hence the ones requiring reopening, are

for the simplest sources and source categories. The EPA believes that

remaining concerns over the resource burden associated with reopenings

will be reasonably addressed by the provisions discussed below.

The EPA reiterates that any permit issued during the interim period

must, upon transition to full approval, assure compliance with the

permit content requirements of title V (i.e., Secs. 70.6 (a) and (c))

for all applicable requirements, including the previously excluded

minor NSR terms. However, the Act does not specifically require a full

reopening when interim approval expires as the only means to achieve

this end. The EPA believes that excluded minor NSR applicable

requirements may be brought on to the title V permit prior to or upon

full program approval using procedures more streamlined than full

reopening. This is because some of the excluded minor NSR requirements

have already been subjected to some title V procedural requirements

(e.g., public review) during issuance of the NSR permit. The EPA

recognizes that under this approach, other excluded minor NSR terms

will be incorporated into part 70 permits without an opportunity for

public comment, EPA objection, or citizen petition until renewal.

However, EPA believes that deferral of these title V requirements until

renewal is appropriate for excluded minor NSR applicable requirements.

A minor NSR permit that is newly issued during the permit term would be

incorporated into the permit through procedures that are less than

those required for permit issuance. The EPA believes it is reasonable

to allow for equitable treatment of pre-existing minor NSR permits that

were initially excluded from the permit in the same manner,

particularly since the permit shield will not apply until the minor NSR

permit undergoes full title V procedures at renewal.

The EPA is adding language at Sec. 70.3(d)(3)(ii)(D) allowing this

streamlined reopening approach for excluded minor NSR terms. The EPA

notes that any such process should at least meet the part 70 permit

revision requirements for changes subject to minor NSR. This would

include any

[[Page 31447]]

minimum requirements for public notice and access to records contained

in the part 70 regulations in effect at the time of program transition

to full approval. The EPA is further allowing permitting authorities to

dispense with the need to give each source a 30-day notice of its

intent to revise the permit to incorporate previously-excluded minor

NSR permits. The EPA believes this individual notice is unnecessary

because sources, by virtue of this action and actions taken by the

State to implement this approach, will have ample notice of the fact

that permits excluding minor NSR permits will need to be reopened.

As an alternative to the streamlined reopening described above, EPA

believes that an interim program that does not include minor NSR terms

in title V permits can be designed in such a way that it provides in

advance for the inclusion of minor NSR terms upon transition to full

approval. This can be accomplished by providing that each part 70

permit issued during the interim period contains a condition that

automatically incorporates, at the date of transition to full approval,

the terms and conditions of any minor NSR permits referenced in the

facility's title V permit. This would not simply be cross-referencing,

but would be advance incorporation of the NSR requirements by

reference, which would subject them to title V requirements such as the

requirement for an annual compliance certification. This approach would

provide in advance for a streamlined transition to full approval

without any need for reopening.

The EPA believes that the allowance for more streamlined procedures

for incorporating excluded applicable requirements, together with the

advance incorporation approach described above, provide less burdensome

alternatives to full reopening. Interim programs that exclude minor NSR

are encouraged to adopt one, or a combination, of these streamlined

approaches to assure that title V is met for excluded minor NSR terms

prior to or upon conversion to full approval, thus avoiding the need

for full reopening. However, EPA notes that, in the absence of any

other assurance that Secs. 70.6 (a) and (c) are met for any applicable

requirements, including minor NSR terms, the reopening provisions under

Secs. 70.7 (f) and (g), including full issuance process, would apply if

and when EPA grants full approval, as noted in the preamble to the

proposal.

4. Cross-Referencing of Minor NSR Permits Under Interim Program

The preamble to the proposed revision provided that each part 70

permit issued by an interim program that does not include minor NSR as

an applicable requirement must state that applicable minor NSR

requirements are not included in the permit, and must cross-reference

any excluded minor NSR permits so that citizens may access and review

those permits. One commenter noted that, while the preamble asserts

that such cross-referencing is required, the corresponding rule

language is ambiguous with respect to this requirement. Another

commenter felt that if EPA does require such cross-referencing,

specific criteria regarding what constitutes adequate cross-referencing

should also be provided.

The EPA agrees that there is a need to clarify the rule language

regarding cross-referencing. Therefore, EPA is adding a sentence to the

proposed rule language in Sec. 70.4(d)(3)(ii) to clarify that a

facility's part 70 permit must contain a list of all minor NSR permits

that contain excluded applicable requirements for that facility. Most

States have a numbering system for minor NSR permits, so a listing in

the part 70 permit of the permit numbers for each minor NSR permit

applicable to that facility would fulfill the cross-referencing

requirement.

For similar reasons, EPA is adding language clarifying the proposal

preamble discussion of the permit shield. The preamble stated that the

permit shield would not apply to the excluded minor NSR terms. Rule

language is being added to codify this requirement in parallel with the

other requirements for the interim program.

III. Administrative Requirements

A. Docket

The docket for this regulatory action is number A-93-50. All the

documents referenced in this preamble fall into one of two categories.

They are either reference materials that are considered to be generally

available to the public, or they are memoranda and reports prepared

specifically for this rulemaking. Both types of documents can be found

in docket number A-93-50.

B. Executive Order (E.O.) 12866

Under E.O. 12866 (58 FR 51735, October 4, 1993), the Agency must

determine whether each regulatory action is ``significant,'' and

therefore subject to the Office of Management and Budget (OMB) review

and the requirements of the Order. The Order defines ``significant''

regulatory action as one that is likely to lead to a rule that may:

(1) Have an annual effect on the economy of $100 million or more,

adversely and materially affecting a sector of the economy,

productivity, competition, jobs, the environment, public health or

safety, or State, local, or tribal governments or communities.

(2) Create a serious inconsistency or otherwise interfere with an

action taken or planned by another agency.

(3) Materially alter the budgetary impact of entitlements, grants,

user fees, or loan program or the rights and obligation of recipients

thereof.

(4) Raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

E.O. 12866.

Pursuant to the terms of E.O. 12866, it has been determined that

this rule is not a ``significant'' regulatory action because it does

not substantially change the existing part 70 requirements for States

or sources--requirements which have already undergone OMB review.

Rather than impose any new requirements, this rule removes an

obstruction to part 70 program approval for a small number of State

programs, allowing them to implement their own part 70 programs. In the

absence of today's rule, EPA would implement its part 71 program in

such States, which, as noted in the Information Collection Request

(ICR) for the part 71 rule, would be more burdensome in a given State

than a part 70 program for both the sources and the applicable

permitting authority. Thus, not only does the rule avoid new direct

costs, it leads indirectly to a savings. As such, this action was

exempted from OMB review.

C. Regulatory Flexibility Act Compliance

Under the Regulatory Flexibility Act, whenever an Agency publishes

any proposed or final rule in the Federal Register, it must prepare a

Regulatory Flexibility Analysis (RFA) that describes the impact of the

rule on small entities (i.e., small businesses, organizations, and

governmental jurisdictions). The EPA has established guidelines which

require an RFA if the proposed rule will have any economic impact,

however small, on any small entities that are subject to the rule, even

though the Agency may not be legally required to develop such an

analysis.

The original part 70 rule was determined to not have a significant

and disproportionate adverse impact on small entities. Similarly, a

regulatory flexibility screening analysis of the

[[Page 31448]]

impacts of the proposed part 70 revisions determined that the proposed

revisions (a subset of which constitutes today's action) would likewise

not have a significant and disproportionate adverse impact on small

entities. Consequently, the Administrator certified that the part 70

regulations would not have a significant and disproportionate impact on

small entities. Because today's rule does not substantially alter the

part 70 regulations as they pertain to small entities, and does not

necessitate changes to the part 70 RFA, these changes to part 70 will

not have a significant and disproportionate impact on small entities,

and a new RFA is not needed for this action.

D. Submission to Congress and the General Accounting Office

Under section 801(a)(1)(A) of the Administrative Procedures Act

(APA) as amended by the Small Business Regulatory Enforcement Fairness

Act of 1996, EPA submitted a report containing this rule and other

required information to the U.S. Senate, the U.S. House of

Representatives and the Comptroller General of the General Accounting

Office prior to publication of the rule in today's Federal Register.

This rule is not a ``major rule'' as defined by section 804(2) of the

APA as amended.

E. Paperwork Reduction Act

The OMB has approved the information collection requirements

contained in this rule under the provisions of the Paperwork Reduction

Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-

0243. The ICR prepared for the part 70 rule is not affected by today's

action because the part 70 ICR determined burden on a nationwide basis,

assuming all part 70 sources were included without regard to the

approval status of individual programs. Today's rule, which simply

provides for the interim approval of certain programs which would have

otherwise not been eligible for such approval, does not alter the

assumptions of the approved part 70 ICR used in determining the burden

estimate. Furthermore, today's action does not impose any additional

requirements which would add to the information collection requirements

for sources or permitting authorities.

Send comments on the Agency's need for this information, the

accuracy of the provided burden estimates, and any suggested methods

for minimizing respondent burden, including through the use of

automated collection techniques, to:

Director, Regulatory Information Division, Office of Policy, Planning,

and Evaluation (2136), U.S. Environmental Protection Agency, 401 M

Street, SW., Washington, DC 20460

and

Office of Information and Regulatory Affairs, Office of Management and

Budget, Attention: Desk Officer for EPA, 725 17th Street, NW.,

Washington, DC 20503.

Include the ICR number in any correspondence.

F. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.

104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on State, local, and tribal

governments and the private sector. Under section 202 of the UMRA, EPA

generally must prepare a written statement, including a cost-benefit

analysis, for proposed and final rules with Federal mandates that may

result in expenditures to State, local, and tribal governments, in the

aggregate, or to the private sector, of $100 million or more in any 1

year.

The EPA has determined that today's rule does not contain a Federal

mandate that may result in expenditures of $100 million or more for

State, local, and tribal governments, in the aggregate, or the private

sector, in any 1 year. Although the part 70 regulations governing State

operating permit programs impose significant Federal mandates, today's

action does not amend the part 70 regulations in a way that

significantly alters the expenditures resulting from these mandates.

Therefore, the Agency concludes that it is not required by section 202

of the UMRA of 1995 to provide a written statement to accompany this

regulatory action.

List of Subjects in 40 CFR Part 70

Environmental protection, Air pollution control, Carbon monoxide,

Fugitive emissions, Hydrocarbons, Lead, New source review, Nitrogen

dioxide, Operating permits, Particulate matter, Prevention of

significant deterioration, Volatile organic.

Dated: June 11, 1996.

Carol M. Browner,

Administrator.

For the reasons set out in the preamble, 40 CFR part 70 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. Section 70.4 is amended by revising paragraphs (d)(3)

introductory text and (d)(3)(ii) to read as follows:

Sec. 70.4 State program submittals and transition.

* * * * *

(d) * * *

(3) The EPA may grant interim approval to any program if it meets

each of the following minimum requirements and otherwise substantially

meets the requirements of this part:

* * * * *

(ii) Applicable requirements.

(A) The program must provide for adequate authority to issue

permits that assure compliance with the requirements of paragraph

(c)(1) of this section for those major sources covered by the program.

(B) Notwithstanding paragraph (d)(3)(ii)(A) of this section, where

a State or local permitting authority lacks adequate authority to issue

or revise permits that assure compliance with applicable requirements

established exclusively through an EPA-approved minor NSR program, EPA

may grant interim approval to the program upon a showing by the

permitting authority of compelling reasons which support the interim

approval.

(C) Any part 70 permit issued during an interim approval granted

under paragraph (d)(3)(ii)(B) of this section that does not incorporate

minor NSR requirements shall:

(1) Note this fact in the permit;

(2) Indicate how citizens may obtain access to excluded minor NSR

permits;

(3) Provide a cross reference, such as a listing of the permit

number, for each minor NSR permit containing an excluded minor NSR

term; and

(4) State that the minor NSR requirements which are excluded are

not eligible for the permit shield under Sec. 70.6(f).

(D) A program receiving interim approval for the reason specified

in (d)(3)(ii)(B) of this section must, upon or before granting of full

approval, institute proceedings to reopen part 70 permits to

incorporate excluded minor NSR permits as terms of the part 70 permits,

as required by Sec. 70.7(f)(1)(iv). Such reopening need not follow full

permit issuance procedures nor the notice requirement of

Sec. 70.7(f)(3), but may instead follow the permit revision procedure

in effect under the State's

[[Page 31449]]

approved part 70 program for incorporation of minor NSR permits.

* * * * *

[FR Doc. 96-15617 Filed 6-19-96; 8:45 am]

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