Clean Air Act Proposed Full Approval of the Operating Permits Program; Approval of Construction Permit and Plan Approval Programs Under Section 112(l); Proposed Approval of State Implementation Plan Revision for the Issuance of Federally Enforceable State Plan Approval and Operating Permits Under Section 110; Commonwealth of Pennsylvania

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 70

[PA65-1; AD-FRL-5436-7]

Clean Air Act Proposed Full Approval of the Operating Permits

Program; Approval of Construction Permit and Plan Approval Programs

Under Section 112(l); Proposed Approval of State Implementation Plan

Revision for the Issuance of Federally Enforceable State Plan Approval

and Operating Permits Under Section 110; Commonwealth of Pennsylvania

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed full approval of Title V Operating Permit Program and

proposed approval of State Operating Permit and Plan Approval Programs.

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SUMMARY: The EPA proposes full approval, under Title V of the Clean Air

Act (the Act), of the Operating Permits Program submitted by the

Commonwealth of Pennsylvania 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 is

also proposing to approve Pennsylvania's Operating Permit and Plan

Approval Programs pursuant to Section 110 of the Act for the purpose of

creating Federally enforceable operating permit and plan approval

conditions for sources of criteria air pollutants. In order to extend

the federal enforceability of State operating permits and plan

approvals to include hazardous air pollutants (HAPs), EPA is also

proposing approval of Pennsylvania's plan approval and operating

permits program regulations pursuant to Section 112 of the Act. Today's

action also proposes approval of Pennsylvania's mechanism for receiving

straight delegation of Section 112 standards.

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

April 8, 1996.

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 3, 841 Chestnut Building,

Philadelphia, Pennsylvania 19107.

FOR FURTHER INFORMATION CONTACT: Michael H. Markowski, 3AT23, U.S.

[[Page 9126]]

Environmental Protection Agency, Region 3, 841 Chestnut Building,

Philadelphia, Pennsylvania, 19107, (215) 597-3023.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

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

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

promulgated rules which define the minimum elements of an approvable

State operating permits program and the corresponding standards and

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

approval of State operating permits programs (see 57 FR 32250 (July 21,

1992)). These rules are codified at 40 Code of Federal Regulations

(CFR) part 70. 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.

On June 28, 1989 (54 FR 27274) EPA published criteria for approving

and incorporating into the SIP regulatory programs for the issuance of

federally enforceable state operating permits. Permits issued pursuant

to an operating permit program meeting these criteria and approved into

the SIP are considered federally enforceable. EPA has encouraged States

to consider developing such programs in conjunction with Title V

operating permit programs for the purpose of creating federally

enforceable limits on a source's potential to emit. This mechanism

would enable sources to reduce their potential to emit of criteria

pollutants to below the Title V applicability thresholds and avoid

being subject to Title V. (See the guidance document entitled,

``Limitation of Potential to Emit with Respect to Title V Applicability

Thresholds,'' dated September 18, 1992, from John Calcagni, Director of

EPA's Air Quality Management Division).

Also as part of this action, EPA is proposing to approve

Pennsylvania's plan approval (i.e., construction permit) and operating

permit programs pursuant to Section 112(l) of the Clean Air Act for the

purpose of allowing the State to issue plan approvals and operating

permits which limit source's potential to emit hazardous air pollutants

(HAPs). Section 112(l) of the Clean Air Act provides the underlying

authority for controlling emissions of HAPs. Therefore, in order to

extend federal enforceability of the State's operating permit and plan

approval programs to include HAPs, EPA today proposes to approve

Pennsylvania's plan approval and operating permit program submittals

pursuant to Section 112(l) of the Act.

II. Proposed Action and Implications

A. Analysis of State Submission

EPA has concluded that the operating permit program submitted by

Pennsylvania meets the requirements of Title V and is proposing to

grant full approval to the program. For more detailed information on

the analysis of the State's submission, please refer to the technical

support document (TSD) included in the docket at the address noted

above.

1. Title V Support Materials

On November 15, 1993, the Commonwealth of Pennsylvania submitted an

operating permits program for review by EPA. The submittal was found to

be administratively incomplete pursuant to 40 CFR 70.4(e)(1) on January

18, 1994. Additional materials were submitted on May 18, 1995. Based on

additional information received in the May 18, 1995 submittal, EPA

found the submittal to be administratively and technically complete on

May 31, 1995. The Commonwealth submitted supplemental information on

November 28, 1995. The submittal includes a letter from the Secretary

of the Department of Environmental Resources, as the designee of the

Governor of the Commonwealth of Pennsylvania, requesting approval of

the Commonwealth's Title V program, a legal opinion from the State

Attorney General stating that the laws of the Commonwealth provide

adequate legal authority to carry out all aspects of the program, and a

description of how the Commonwealth intends to implement the program.

The submittal additionally contains evidence of proper adoption of the

program regulations, a permit fee demonstration, a description of the

State's Title V program, and a proposed draft of an implementation

agreement (IA) to be negotiated between EPA and the Commonwealth of

Pennsylvania.

2. Title V Operating Permit Program Regulations and Program

Implementation

The Commonwealth of Pennsylvania's Title V regulations were adopted

and became effective on November 26, 1994. They include 25 Pa. Code

Chapter 127, Subchapters F and G, as well as the definitions provided

in 25 Pa. Code Chapter 121.1. EPA has determined that these regulations

``fully meet'' the requirements of 40 CFR Part 70, Sections 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. The TSD contains a

detailed analysis of Pennsylvania's program and describes the manner in

which the State's program meets all the operating permit program

requirements of 40 CFR Part 70. However, several issues were identified

by EPA during its review of Pennsylvania's Title V operating permit

program which warrant a more detailed discussion and analysis. These

issues are outlined below.

a. Absence of Part 70 Emergency Defense Provisions--Pennsylvania

has incorporated by reference New Source Performance Standards (NSPS),

National Emission Standards for Hazardous Air Pollutants (NESHAP), and

Maximum Available Control Technology (MACT) technology-based emissions

limitations/standards in 25 Pa. Code 122.1, 124.1, and 127.35,

respectively. Where these technology-based standards incorporate an

emergency defense, that emergency defense becomes part of Pennsylvania

law by reference. Pennsylvania's program does not provide for any other

emergency defense, and does not specifically provide for a Part 70

emergency defense. While it is true that a specific Part 70 emergency

defense is lacking, EPA clarified, in its August 31, 1995, supplemental

Part 70 notice, that ``the Part 70 rule does not require the States to

adopt the emergency defense. A State may include such a defense in its

Part 70 program to the extent it finds appropriate, although it may not

adopt an emergency defense less stringent than that set forth at 40 CFR

70.6(g).'' 60 FR 45530, 45559. Thus, since State

[[Page 9127]]

adoption of emergency defense provisions under Part 70 is

discretionary, Pennsylvania's failure to include such a defense in its

Part 70 program is not inconsistent with 70.6(g).

b. Origin of and Authority for Permit Terms and Conditions--40 CFR

70.6(a)(1)(I) requires that each Title V permit, as issued by the

permitting authority, specify and reference the origin of and authority

for each permit term or condition, and identify any difference in form

as compared to the applicable requirement upon which the term or

condition is based. These requirements for permit content related to

specification of the origin and authority for permit terms and

conditions in Title V permits have been met by the Pennsylvania program

primarily through the language of Section IV.B.16(a)(1) of the

Commonwealth's Title V program description and through relevant

provisions of an Implementation Agreement (IA) that has been negotiated

between EPA and PADEP (the rulemaking docket includes an IA that was

signed by PADEP on January 31, 1996, and by EPA on February 15, 1996).

Section IV.B.16(a)(1) of the PADEP's Title V program description

provides that Title V permit applications shall require sources to

identify all applicable requirements, including citations to the origin

of and authority for each requirement. EPA regards this language, along

with the Title V permit application form itself and the relevant

provisions of an IA that has been negotiated between EPA and PADEP, as

sufficient assurance that Pennsylvania's Title V operating permits will

include citation to the origin of and authority for each permit term

and condition.

c. 45 Day EPA Review Prior to Permit Issuance--Under

Sec. 127.522(f) of the Commonwealth's regulations, EPA is afforded a 45

day period to review proposed permits for conformity with Clean Air Act

and Part 70 requirements. Section Sec. 127.522(f) further specifies

that EPA may veto a permit within this review period.

It is noted that Sec. 127.522 does not ensure that EPA will have an

opportunity for a 45 day period of pre-issuance review of permits that

are revised as a result of the public and affected State's comments. It

appears that pursuant to Sec. 127.521(d) and (e) and Sec. 127.522(f),

the 30 day public comment period may commence at the same time as EPA's

45 day review period. Thus, it is possible that Pennsylvania could

modify and issue the proposed permit on the basis of public (or

affected State) comments.

However, Sec. 127.522(f) does provide that the final permit shall

be provided to EPA ``upon issuance if material substantive changes are

made to the proposed permit.'' If EPA objects within 45 days of final

permit issuance, ``the permit will be revoked.'' Both Section

IV.B.17(h) of the program description and Sec. 127.522(f) state that if

EPA objects to the issuance of the final revised permit within 45 days,

the permit will be revoked. EPA concludes from the regulatory language

and program description that post-issuance revocation will be

straightforward and automatic, in the event that EPA objects (within 45

days of receipt of the revised permit) to permit conditions that result

from public or affected state comments.

Provisions defining ``material substantive changes'' are included

in the IA that has been negotiated between EPA and PADEP. The IA will

help to clarify the criteria to be used by Pennsylvania in determining

which final permits must be provided to EPA for post-issuance review.

Moreover, the IA will confirm that post-issuance permit revocation is

indeed automatic for revised permits issued by Pennsylvania but

objected to by EPA within 45 days of issuance.

EPA believes that the provisions in the regulation and the IA

regarding EPA review of permits that are revised on the basis of public

and affected state comments are adequate to protect EPA's oversight

function.

d. Insignificant Activities--Under Part 70, EPA may approve as part

of a State program a list of insignificant activities and emission

levels which need not be included in permit applications. Pennsylvania

has not requested EPA approval of such a list of insignificant

activities or emission levels.

e. Proposed Exemption from Title V for R&D Facilities--Under 25 Pa.

Code Sec. 127.502(c) of the Commonwealth's Title V operating permit

program regulations, Research and Development (R&D) facilities located

at a Title V facility are not required to be included as part of the

Title V facility. However, for the purpose of determining Title V

applicability, emissions from R&D facilities are aggregated with the

rest of the facility's emissions. R&D facilities are defined in 25 Pa.

Code Sec. 121.1 as a stationary source whose purpose is to conduct

research and development of products and processes, or basic research

``for education or the general advancement of technology and

knowledge'' under the ``close supervision of technically trained

personnel.'' R&D facilities may not engage in the manufacture of

products for commercial sale or internal manufacturing use ``except in

deminimus amounts on an infrequent basis.'' The emissions from the R&D

facility must be less than the Title V threshold.

EPA interprets the Commonwealth's regulations as providing an

exemption from Title V requirements for co-located R&D facilities. The

current Part 70 rule does not provide any specific exemption from Title

V for co-located R&D facilities. However, EPA's August 31, 1995 (60 FR

45530) and August 29, 1994 supplemental Part 70 notices and the

preamble to the original Part 70 rule do provide for the separate

treatment of co-located R&D activities under Title V. In the August

1995 notice, EPA proposed to revise the Part 70 definition of ``major

source'' so that R&D activities could be considered separately for the

purpose of determining whether a source is major. EPA further stated in

that notice that it believes it appropriate to continue to implement

the current Part 70 rule to allow for the separate treatment of co-

located R&D activities. Thus, EPA believes that co-located R&D

facilities may be treated separately for purposes of determining Title

V applicability, and determining whether the Title V facility and the

co-located R&D facility are major sources.

Pursuant to the August 1995 notice, emissions from R&D activities

need not be aggregated with those of co-located stationary sources

unless the R&D activities contribute to the product produced or service

rendered by the co-located sources in a more than deminimus manner. As

a result of this approach, nonmajor R&D facilities are exempted from

Title V. The separate treatment of co-located R&D facilities, as

provided for in EPA's August 1995 notice, exempts non-major R&D

facilities from Title V since only major sources are required to obtain

a Title V permit at this time. Under the EPA's August 1995 proposal,

research and development activities would be required to have a Title V

permit only if the R&D facility itself were a major source.

The Sec. 121.1 definition of ``Research and Development Facility''

provided in the Commonwealth's regulations is reserved exclusively for

those research and development activities ``with emissions less than

the emissions thresholds for a Title V facility.'' Thus, by definition,

only non-major research and development activities qualify as ``R&D

facilities'' under the Pennsylvania regulations. Section 127.502(c) of

the Commonwealth's regulations further requires that emissions from a

co-located R&D facility be included when evaluating Title V

applicability. In its

[[Page 9128]]

August 1995 supplemental Part 70 notice, however, EPA proposed to

exempt non-major R&D facilities not only from Title V applicability but

also from the need to aggregate emissions from the R&D facility with

emissions from the Title V facility for the purpose of determining

whether a major source is present. Therefore, the Pennsylvania Title V

operating permit program is at least as stringent in this regard than

is required by EPA for program approval.

f. Acid Rain Requirements- Section 6.5 of Pennsylvania's Air

Pollution Control Act (``APCA''), 35 P.S. Sec. 4006.5, and 25 Pa. Code

Sec. 127.531 contain special operating permit provisions related to

Title IV of the Clean Air Act, the legislation's ``acid rain'' section.

In pertinent part, APCA Section 6.5 authorizes DEP to develop an acid

rain permit program; incorporates the definitions of sections 402 and

501 of the Clean Air Act; establishes a schedule for permit application

and compliance plan submission; and establishes certain permit

requirements for permits concerning sulfur dioxide emissions and

allowances.

25 Pa. Code Sec. 127.531 sets out an appropriate schedule for

submission of acid rain permits and compliance plans (Sec. 127.531(b));

provides that the permit application and compliance plan is binding and

enforceable until permit issuance (Sec. 127.531(c)); requires the

source to comply with permit conditions ``no later than the date

required by the Clean Air Act or regulations thereunder''

(Sec. 127.531(d)); allows permit revisions any time after submission of

the application and compliance plan (Sec. 127.531(e)); prohibits

emissions in excess of allowances or applicable emission limitations,

premature use of allowances, or contravention of any permit term

(Sec. 127.531 (f) and (g)); and requires compliance with accounting

procedures for allowances promulgated under Title IV

(Sec. 127.531(g)(3)).

It is noted that Pennsylvania has not directly incorporated by

reference EPA's Title IV regulations found at 40 CFR Part 72, and has

not adopted EPA's model rules. However, several regulatory provisions

require that Pennsylvania's Title V program be operated in accordance

with the requirements of Title IV and its implementing regulations.

Section 127.531(a) provides that the acid rain provisions of that

section ``shall be interpreted in a manner consistent with the Clean

Air Act and the regulations thereunder.'' Section 127.531(b) requires

that affected sources submit a permit application and compliance plan

``that meets the requirements of * * * the Clean Air Act and the

regulations thereunder.'' Further, the Sec. 121.1 definition of

``applicable requirements'' for Title V sources includes standards or

other requirements ``of the acid rain program under Title IV of the

Clean Air Act * * * or the regulations thereunder.''

The statute and regulations cited above support the Pennsylvania

Attorney General's opinion that ``Commonwealth law is consistent with,

and cannot be used to modify, the Acid Rain requirements of 40 CFR Part

72.'' Attorney General Opinion at 8-9.

For additional assurance that Pennsylvania's operating permit

program will operate in compliance with applicable acid rain

requirements, the Commonwealth has agreed to accept delegation of the

applicable provisions of 40 C.F.R. Parts 70, 72, and 78 for the purpose

of implementing the Title IV requirements of its operating permit

program. PADEP shall apply these provisions for purposes of

incorporating Acid Rain program requirements into each affected

source's operating permit; identifying designated representatives;

establishing permit application deadlines; issuing, denying, modifying,

reopening, and renewing permits; establishing compliance plans;

processing permit appeals; and issuing written exemptions under 40

C.F.R. Secs. 72.7 and 72.8. This commitment is contained in the IA that

has been negotiated between EPA and PADEP.

Furthermore, at EPA's request, Pennsylvania's Title V program

description has been revised to clarify that the Commonwealth will

implement its acid rain program in accordance with applicable

provisions of 40 C.F.R. Parts 70, 72, and 78; and that PADEP will

perform completeness and substantive reviews of acid rain permit

applications, and that acid rain permits will be issued in accordance

with EPA's acid rain permit writer's guidance. The revised program

description also states Pennsylvania will initiate appropriate

enforcement activities to compel compliance with permit conditions.

3. Title V Permit Fee Demonstration

Section 502(b)(3) of the Act requires that each permitting

authority collect fees sufficient to cover all reasonable direct and

indirect costs required to develop and administer its Title V operating

permits program. Each Title V program submittal must contain either a

detailed demonstration of fee adequacy or a demonstration that

aggregate fees collected from Title V sources meet or exceed $25 per

ton of emission per year (adjusted from 1989 by the Consumer Price

Index (CPI)). The $25 per ton amount is presumed, for program approval,

to be sufficient to cover all reasonable program costs and is thus

referred to as the ``presumptive minimum'' [Section 70.9(b)(2)(I)].

Pennsylvania has opted to make a presumptive minimum fee

demonstration. Pennsylvania's existing fee schedule, under Section

127.705 of the Commonwealth's regulations, requires Title V facilities

to pay an annual Title V emission fee of $37 per ton for each ton of a

regulated pollutant actually emitted from the facility. This amount

exceeds the $25 per ton presumptive minimum. Section 127.705 also

includes a provision that ties the amount of the fee to the Consumer

Price Index (CPI) as required by 40 CFR 70.9(b)(2)(iv). The $37 per ton

amount was derived by dividing the total annual estimated Title V

operating permit program cost by the total annual number of billable

tons of emissions. Pennsylvania used actual operating hours and

production rates, and considered in-place control equipment and the

types of materials processed, stored, or combusted in calculating the

total actual billable tons figure. EPA has determined that these fees

will result in collection and retention of revenues sufficient to cover

the Title V operating permit program costs.

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

a. Section 112--Pennsylvania 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 Pennsylvania's enabling legislation (the Air Pollution

Control Act, ``APCA'') and in regulatory provisions defining

``applicable requirements'' and ``Title V facility'' and mandating that

permits must incorporate all applicable requirements. EPA has

determined that this legal authority is sufficient to allow

Pennsylvania to issue permits that assure compliance with all section

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

including those required under section 112(g). For further rationale on

this interpretation, please refer to the Technical Support Document

accompanying this rulemaking and the April 13, 1993 guidance memorandum

entitled ``Title V Program Approval Criteria for Section 112

Activities,'' signed by John Seitz, Director of the Office of Air

Quality Planning and Standards.

b. Program for Straight Delegation of Section 112 Standards--The

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

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

[[Page 9129]]

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.

Because Pennsylvania has historically accepted delegation of Section

112 standards through automatic delegation, EPA proposes to approve the

delegation of Section 112 standards and requirements through automatic

delegation. The details of this delegation mechanism have been set

forth in an Implementation Agreement (IA) between Pennsylvania and EPA.

This approval applies to both existing and future standards but is

limited to sources covered by the Part 70 operating permit program.

c. Limiting HAP Emissions Through FESOP and Plan Approval

Programs--As part of this action EPA proposes to approve, pursuant to

Section 112(l) of the Clean Air Act, the Commonwealth's request for

authority to regulate HAPs through the issuance of federally

enforceable State operating permits and plan approvals. As explained

more fully in the Technical Support Document accompanying this proposed

rulemaking, EPA proposes to approve and incorporate into the SIP

Pennsylvania's operating permit and plan approval (i.e., construction

permit) programs codified in Subchapters F and B, respectively, of the

PADEP's air quality regulations. This would grant the PADEP authority

to issue plan approvals and operating permits which limit potential to

emit of criteria pollutants. However, as part of this action, EPA also

proposes to approve both State programs under Section 112(l) of the Act

for the purpose of extending Pennsylvania's authority to create

federally enforceable limits to include HAPs in addition to criteria

pollutants. Please refer to the Technical Support Document for a

thorough analysis of Pennsylvania's operating permit and plan approval

programs in accordance with applicable federal approval criteria.

d. Program for Implementing Title IV of the Act--Pennsylvania's

program contains adequate authority to issue permits which reflect the

requirements of Title IV of the Act, and Pennsylvania commits to adopt

the rules and requirements promulgated by EPA to implement an acid rain

program through the Title V permit.

B. Proposed Action

1. Title V Operating Permits Program

EPA is proposing full approval of the operating permits program

submitted to EPA by the Commonwealth of Pennsylvania on May 18, 1995.

Among other things, Pennsylvania 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. The scope of the Pennsylvania

program that EPA proposes to approve in this notice would apply to all

Title V facilities (as defined in the approved program) within the

Commonwealth of Pennsylvania, except for those areas where a separate

local agency Title V operating permits program has been approved by

EPA.

EPA also proposes approval of Pennsylvania's Plan Approval and

Operating Permit Programs, found in Subchapters B and F, respectively,

of Chapter 127 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 (HAPs) listed pursuant to

Section 112(b) of the Act.

2. Program for Delegation of Section 112 Standards as Promulgated

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. Because Pennsylvania has historically

accepted delegation of Section 112 standards through automatic

delegation, EPA proposes to approve the delegation of Section 112

standards and requirements through automatic delegation. The details of

this delegation mechanism are set forth in an Implementation Agreement

(IA) that has been negotiated between Pennsylvania and EPA. This

approval applies to both existing and future standards but is limited

to sources covered by the Part 70 operating permit program.

III. Proposed Approval of State Operating Permit and Plan Approval

Programs Under Section 110 of the Act

A. Background

As part of the May 18, 1995 submittal, PADEP submitted to EPA for

review and approval a revision to its State Implementation Plan (SIP)

designed to create federally enforceable limits on a source's potential

to emit. The revision consists of regulations establishing a State

operating permit program and a plan approval program, codified in

Subchapters F and B, respectively, of the Commonwealth's air quality

regulations. Pennsylvania refers to construction permits as ``plan

approvals.'' The proposed SIP revision generally strengthens the

Pennsylvania SIP by establishing a comprehensive operating permit and

plan approval program and by making the operating permit program

regulations consistent with the Title V operating permit regulations

codified in Chapter 127, Subchapter G of the Commonwealth's

regulations.

Limiting a source's potential to emit to below major source

thresholds through the use of federally enforceable terms and

conditions in a State operating permit or plan approval exempts such a

source from Title V permitting requirements. State operating permit

programs which have been incorporated into the SIP renders operating

permits issued pursuant to such a program as federally enforceable, and

the program itself is referred to as a federally enforceable State

operating permit program, or ``FESOP'' program. This FESOP mechanism

will allow sources to reduce their potential to emit to below the Title

V applicability thresholds and avoid being subject to Title V.

Similarly, construction permit (i.e., plan approval) programs which

have been incorporated into the SIP renders construction permits, or,

in Pennsylvania's case, plan approvals, issued pursuant to such a

program as federally enforceable.

Pennsylvania's FESOP and plan approval program regulations were

adopted and became effective on November 26, 1994. The operating permit

program regulations are codified under Chapter 127, Subchapter F of the

Commonwealth's air quality regulations, and the plan approval program

regulations are codified under Chapter 127, Subchapter B of the

Commonwealth's air quality regulations.

[[Page 9130]]

EPA found the SIP submittal complete on May 31, 1995.

EPA's review of this submittal indicates that the operating permit

and plan approval programs both meet applicable federal criteria for

approval. Accordingly, EPA is today proposing to approve the

Pennsylvania SIP revision for the plan approval and operating permit

programs, which was submitted on May 18, 1995.

B. Federal Criteria for Approval of Pennsylvania's FESOP and Plan

Approval Programs Pursuant to Section 110 of the Act

The five criteria for approving a State operating permit program

into a SIP were set forth in the June 28, 1989 Federal Register

document (54 FR 27282). Permits issued under an approved program are

federally enforceable and may be used to limit the potential to emit of

sources of criteria pollutants. Pennsylvania's FESOP provisions of

Subchapter F, Chapter 127 meet the June 28, 1989 criteria by ensuring

that the limits will be permanent, quantifiable, and practically

enforceable and by providing adequate notice and comment to both EPA

and the public. Please refer to the Technical Support Document for a

thorough analysis of the June 28, 1989 criteria as applied to

Pennsylvania's FESOP program.

EPA is proposing to approve pursuant to Section 110 of the Act and

the approval criteria specified in the June 28, 1989 Federal Register

document the following regulations that were submitted to make permits

issued pursuant to the Commonwealth's FESOP program federally

enforceable and to make the program consistent with it's Title V

operating permit program: Subchapter F, Chapter 127, Sections 127.401

through 127.464, inclusive.

As described above, Pennsylvania also submitted on May 18, 1995 for

EPA approval revisions to its existing new source review (NSR)

construction permit (i.e., plan approval) program. Pennsylvania's new

source review construction permit is called a ``plan approval.'' The

Commonwealth's plan approval program has been part of its SIP for many

years and meets the requirements in Section 110(a)(2)(C) of the Act

which requires all SIPs to provide for the regulation of the

modification and construction of any stationary source within the areas

covered by the plan implementation as necessary to assure that national

ambient air quality standards (NAAQS) are achieved. Pennsylvania's plan

approval regulations referenced above were originally approved by EPA

into the SIP on May 31, 1972 (37 FR 10842) for the purpose of meeting

the Section 110(a)(2)(C) requirement.

In order to make its program consistent with the Clean Air Act

Amendments of 1990, Pennsylvania had previously submitted, on February

10, 1994, its new source review (NSR) construction permit program to

EPA for review and approval. EPA is reviewing this program submittal

and will take the appropriate approval/disapproval action at a later

date. As part of this action, Pennsylvania is making changes to its

public hearing and administrative procedures in order to achieve

consistency of such procedures throughout all of its permitting

programs. EPA has reviewed these proposed changes to Pennsylvania's

plan approval program and has determined that they meet all applicable

federal requirements for approval.

C. Proposed Approval of Pennsylvania's Plan Approval and FESOP Programs

Under Section 112(1)

On May 18, 1995, PADEP requested approval of Pennsylvania's FESOP

and plan approval programs under Section 112 of the Act for the purpose

of creating federally enforceable limitations on the potential to emit

of HAPs. As described above, the Commonwealth's plan approval program

regulations were initially approved by EPA and incorporated into the

Pennsylvania SIP on May 31, 1972. EPA is today proposing to approve and

incorporate into the SIP Pennsylvania's operating permit and plan

approval program regulations submitted May 18, 1995.

EPA approval of the Commonwealth's plan approval and FESOP programs

under Section 112(l) of the Act is necessary to extend Pennsylvania's

existing authority under Section 110 of the Act to include authority to

create federally enforceable limits on the potential to emit HAPs.

EPA's previous rulemaking actions on the various Pennsylvania permit

programs for incorporation into the SIP provides a mechanism only for

controlling criteria air pollutants which does not extend to HAPs. Only

Section 112 of the Act provides the underlying authority for States to

limit potential to emit of HAPs in federally enforceable State

operating permits and construction permits. This necessitates EPA

approval of Pennsylvania's operating permit and plan approval programs

pursuant to Section 112(l) of the Act.

The criteria used by EPA for the original SIP approval of

Pennsylvania's plan approval program are located in 40 CFR 51.160-164.

EPA believes that the PADEP's existing plan approval program meets the

requirements of 40 CFR 51.160 through 51.164.

EPA has determined that the five approval criteria for approving

FESOP programs into the SIP, as specified in the June 28, 1989 Federal

Register notice referenced above, are also appropriate for evaluating

and approving the programs under Section 112(l). The June 28, 1989

notice does not address HAPs because it was written prior to the 1990

amendments to Section 112 of the Act. Hence, the following five

criteria are applicable to FESOP approvals under Section 112(l): (1)

the program must be submitted to and approved by EPA; (2) the program

must impose a legal obligation on the operating permit holders to

comply with the terms and conditions of the permit, and permits that do

not conform with the June 28, 1989 criteria shall be deemed not

federally enforceable; (3) the program must contain terms and

conditions that are at least as stringent as any requirements contained

in the SIP or enforceable under the SIP or any other Section 112 or

other Clean Air Act standard or requirement; (4) permits issued under

the program must contain conditions that are permanent, quantifiable,

and enforceable as a practical matter; and (5) permits issued under the

program must be subject to public participation. Please refer to the

TSD for a thorough analysis of how Pennsylvania's operating permits

program satisfies each of the five approval criteria. Since the State's

operating permits program meets the five program approval criteria for

both criteria and hazardous air pollutants, the Pennsylvania program

may be used to limit the potential to emit of both criteria and

hazardous air pollutants.

In addition to meeting the criteria discussed above, Pennsylvania's

plan approval and operating permits programs for limiting potential to

emit of 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 standard or requirement; (2) provides

for adequate resources; (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.

[[Page 9131]]

(See 58 Fed. Reg. 62262, November 26, 1993). The EPA currently

anticipates that these criteria, as they apply to FESOP programs, will

mirror those set forth in the June 28, 1989 notice, with the addition

that the State's authority must extend to HAPs instead of or in

addition to VOC's and PM10. The EPA currently anticipates that

FESOP programs that are approved pursuant to Section 112(l) prior to

the planned Subpart E revisions will have had to meet these criteria,

and hence will not be subject to any further approval action.

The EPA believes it has the authority under section 112(l) to

approve programs to limit potential to emit of HAPs directly under

section 112(l) prior to this revision to Subpart E. Section 112(l)(5)

requires the EPA to disapprove programs that are inconsistent with

guidance required to be issued under section 112(l)(2). This might be

read to suggest that the ``guidance'' referred to in section 112(l)(2)

was intended to be a binding rule. Even under this interpretation, the

EPA does not believe that section 112(l) requires this rulemaking to be

comprehensive. That is, it need not address every possible instance of

approval under section 112(l). The EPA has already issued regulations

under section 112(l) that would satisfy any section 112(l)(2)

requirement for rulemaking. Given the severe timing problems posed by

impending deadlines set forth in ``maximum achievable control

technology'' (MACT) emission standards under section 112 and for

submittal of Title V permit applications, the EPA believes it is

reasonable to read section 112(l) to allow for approval of programs to

limit potential to emit prior to promulgation of a rule specifically

addressing this issue. The EPA is therefore proposing approval of

Pennsylvania's FESOP and plan approval programs now so that

Pennsylvania may begin to issue federally enforceable operating permits

and plan approvals limiting potential to emit as soon as possible. This

will allow Pennsylvania to immediately begin exempting sources from

Title V requirements where this is possible and appropriate.

The EPA proposes approval of Pennsylvania's FESOP and plan approval

programs pursuant to Section 112(l) of the Act because the programs

meet applicable approval criteria specified in the June 28, 1989

Federal Register document and in Section 112(l)(5) of the Act.

Regarding the statutory criteria of Section 112(l)(5) of the Act

referred to above, the EPA believes Pennsylvania's FESOP and plan

approval programs contain adequate authority to assure compliance with

Section 112 requirements since neither program provides for waiving any

Section 112 requirement(s). Sources would still be required to meet

Section 112 requirements applicable to non-major sources. Regarding

adequate resources, Pennsylvania has included in its FESOP and plan

approval programs provisions for collecting fees from sources making

application for either a plan approval, an operating permit, or both.

Furthermore, EPA believes that Pennsylvania's FESOP and plan approval

programs provide for an expeditious schedule for assuring compliance

because they allow a source to establish a voluntary limit on potential

to emit and avoid being subject to a federal Clean Air Act requirement

applicable on a particular date. Nothing in Pennsylvania's plan

approval or operating permit programs would allow a source to avoid or

delay compliance with a federal requirement if it fails to obtain the

appropriate federally enforceable limit by the relevant deadline.

Finally, Pennsylvania's FESOP and plan approval programs are consistent

with the objectives of the Section 112 program because their purpose is

to enable sources to obtain federally enforceable limits on potential

to emit to avoid major source classification under Section 112. The EPA

believes that this purpose is consistent with the overall intent of

Section 112.

IV. Administrative Requirements

A. Request for Public Comments

The EPA is soliciting public comments on all aspects of this

proposed full approval. Interested parties may participate in the

Federal rulemaking procedure by submitting written comments to the EPA

Regional office listed in the Addresses section of this notice. These

comments will be considered before taking final action. Copies of the

State's submittal and other information relied upon for the proposed

Title V and section 112(l) approvals and the approval of Pennsylvania's

SIP revision pertaining to its plan approval and FESOP programs 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 8, 1996.

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 sections 502, 110 and 112 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, the

creation of Federally enforceable permit conditions for sources of

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

and plan approval and FESOP requirements that the State is already

imposing. Because this action does not impose any new requirements, it

does not have a significant impact on a substantial number of small

entities.

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, EPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000.

SIP approvals under section 110 and subchapter I, part D of the

Clean Air Act do not create any new requirements but simply approve

requirements that the State is already imposing. Therefore, because the

Federal SIP approval does not impose any new requirements, the

Administrator certifies that it does not have a significant impact on

any small entities affected. Moreover, due to the nature of the

Federal-State relationship under the Act, preparation of a flexibility

analysis would constitute Federal inquiry into the economic

reasonableness of state action. The Clean Air Act forbids EPA to base

its actions concerning SIPs on such grounds. Union Electric Co. v. U.S.

EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any State implementation plan. Each request for revision to

the State implementation plan shall be considered separately in light

of specific technical, economic,

[[Page 9132]]

and environmental factors and in relation to relevant statutory and

regulatory requirements.

D. Unfunded Mandates

Under Section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a budgetary impact statement to accompany any proposed or

final rule that includes a Federal mandate that may result in estimated

costs to State, local, or tribal governments in the aggregate; or to

private sector, of $100 million or more. Under Section 205, EPA must

select the most cost-effective and least burdensome alternative that

achieves the objectives of the rule and is consistent with statutory

requirements. Section 203 requires EPA to establish a plan for

informing and advising any small governments that may be significantly

or uniquely impacted by the rule.

This Federal action approves pre-existing requirements under State

or local law, and imposes no new Federal requirements. Accordingly, no

additional costs to State, local, or tribal governments, or to the

private sector, result from this action.

This action proposing approval of Pennsylvania's Title V program

has been classified as a Table 3 action for signature by the Regional

Administrator under the procedures published in the Federal Register on

January 19, 1989 (54 FR 2214-2225), as revised by a July 10, 1995

memorandum from Mary Nichols, Assistant Administrator for Air and

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

regulatory action from E.O. 12866 review.

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

Dated: February 23, 1996.

Stanley L. Laskowski,

Acting Regional Administrator, EPA Region III.

[FR Doc. 96-5415 Filed 3-6-96; 8:45 am]

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