[Federal Register Volume 59, Number 198 (Friday, October 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25388]
[[Page Unknown]]
[Federal Register: October 14, 1994]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70
[CO-001; FRL-5090-5]
Clean Air Act Proposed Interim Approval of Operating Permit
Program; State of Colorado
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed interim approval.
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SUMMARY: The EPA proposes interim approval of the Operating Permits
Program submitted by the State of Colorado. Colorado's Operating
Permits Program was submitted for the purpose of complying with federal
requirements which mandate that states develop, and submit to EPA,
programs for issuing operating permits to all major stationary sources,
and to certain other sources.
DATES: Comments on this proposed action must be received in writing by
November 14, 1994.
ADDRESSES: Comments on this action should be addressed to Laura Farris,
8ART-AP, U.S. Environmental Protection Agency, Region 8, Air Programs
Branch, 999 18th Street, Suite 500, Denver, Colorado 80202.
Copies of the State's submittal and other supporting information
used in developing the proposed rule 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, (303) 294-7539.
SUPPLEMENTARY INFORMATION:
I. Background and Purpose
Introduction
As required under title V of the Clean Air Act (``the Act'') as
amended (1990), EPA has promulgated rules which define the minimum
elements of an approvable state operating permits program and the
corresponding standards and procedures by which the EPA will approve,
oversee, and withdraw approval of state operating permits programs (see
57 FR 32250 (July 21, 1992)). These rules are codified at 40 Code of
Federal Regulations (CFR) part 70. Title V requires states to develop,
and submit to EPA, programs for issuing these operating permits to all
major stationary sources and to certain other sources.
The Act requires that states develop and submit these programs to
EPA by November 15, 1993, and that EPA act to approve or disapprove
each program within 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. Based on a material change to the State's submittal, which
consisted of a revised permit fee demonstration, the EPA is extending
the review period for an additional 3 months. 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 Colorado submitted an administratively complete
Title V Operating Permit Program (PROGRAM) for the State of Colorado on
November 5, 1993. EPA deemed the PROGRAM administratively complete in a
letter to the Governor dated December 28, 1993. The PROGRAM submittal
includes a legal opinion from the Attorney General of Colorado 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, application and
permit forms, a transition plan, and a permit fee demonstration.
2. Regulations and Program Implementation
The Colorado PROGRAM, including the operating permit regulation
(part C of Regulation No. 3), substantially meets the requirements of
40 CFR 70.2 and 70.3 with respect to applicability; Secs. 70.4, 70.5,
and 70.6 with respect to permit content including operational
flexibility; Sec. 70.5 with respect to complete application forms and
criteria which define insignificant activities; Sec. 70.7 with respect
to public participation and minor permit modifications; and Sec. 70.11
with respect to requirements for enforcement authority.
Section II.E. of part C of Regulation 3 lists the insignificant
activities that sources do not have to include in their operating
permit application. This list includes emission thresholds for criteria
pollutants in nonattainment areas (less than one ton per year),
criteria pollutants in attainment areas (less than two tons per year);
lead (less than 100 pounds per year); non-criteria pollutants (less
than the de minimis levels determined by the method set forth in
Appendix A of Regulation 3); as well as other specific activities and
sources which are considered to be insignificant activities. Section
II.E. states that sources may not use any insignificant activity
exemptions from the list to avoid any applicable requirements.
Part 70 of the operating permits regulations requires prompt
reporting of deviations from the permit requirements. Section
70.6(a)(3)(iii)(B) 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 that this is a distinct reporting obligation under
Sec. 70.6(a)(3)(iii)(A). 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. Colorado's
PROGRAM, in section V.C.7.b of part C of Regulation 3, states that
``prompt'' will be defined in each individual permit, depending on the
type and degree of deviation likely to occur and the applicable
requirements; however, ``prompt'' reporting will be required at least
every six months, except as otherwise specified by the State in the
permit.
Colorado State law does not authorize variances from Clear Air Act
requirements. Additionally, the Attorney General's opinion that was
part of the PROGRAM submittal states that the State will not authorize
the granting of a variance from an applicable requirement or from the
terms of an operating permit.
Comments noting deficiencies in the Colorado PROGRAM were sent to
the State in a letter dated April 8, 1994. The deficiencies were
segregated into those that require corrective action prior to interim
PROGRAM approval, and those that require corrective action prior to
final PROGRAM approval. The State committed to address the deficiencies
that require corrective action prior to interim PROGRAM approval in a
letter dated May 12, 1994, and subsequently held a public hearing to
consider and finalize these changes on August 18, 1994. EPA has
reviewed these changes and has determined that they are adequate to
allow for interim approval. One issue noted in the April 8th letter
related to insignificant activities requires further corrective action
prior to full PROGRAM approval as follows: The State must revise its
administrative process in section II.D.5 of part A of Regulation 3, for
adding additional exemptions to the insignificant activities list, to
require approval by the EPA of any new exemptions before such
exemptions can be utilized by a source. An additional deficiency that
requires corrective action prior to full PROGRAM approval regarding the
implementation of section 112(r) of the Act is addressed in section 4.a
below. Refer to the technical support document accompanying this
rulemaking for a detailed explanation of each comment and the State's
corrective actions.
1994 Colorado Senate Bill 94-139, now codified at section 13-25-
126.5 of the Colorado Revised Statutes, contains an ``environmental
self-evaluation privilege'' which prevents the admission of voluntary
environmental audit reports as evidence in any civil, criminal or
administrative proceeding, with certain exceptions. It is not clear at
this time what effect, if any, this privilege might have on title V
enforcement actions. In addition, EPA is currently establishing a
national position regarding EPA approval of environmental programs in
States which adopt statutes that confer an evidentiary privilege for
environmental audit reports. The EPA regards Senate Bill 94-139 as
wholly external to the program submitted for approval under part 70,
and consequently proposes to take no action on this provision of State
law. If, during PROGRAM implementation, EPA determines that this
provision interferes with Colorado's enforcement responsibilities under
part 70, EPA will consider this grounds for withdrawing PROGRAM
approval in accordance with 40 CFR section 70.10(c).
3. Permit Fee Demonstration
The Colorado PROGRAM included an original fee structure that set
fees below the presumptive minimum set in part 70. Specific fee
provisions included $17.23 per ton fee for regulated air pollutants for
fiscal year 1994, to be increased on an annual basis to $22.17 in
fiscal year 1995, $27.01 in fiscal year 1996 and $28.30 in fiscal year
1997; an additional fee of $100 per ton for hazardous air pollutants
(HAPs), including ozone depleting substances, for fiscal year 1994 and
thereafter; a permit application processing fee of $50 per hour; and a
fee of $100 to accompany air pollution emission notices required of
new, modified and existing sources by the State which must be renewed
every five years (fees will not be charged on emissions exceeding 4,000
tons per year per pollutant at a source). Because Colorado's estimated
aggregate fee per ton (i.e. total revenues divided by annual tons of
emissions subject to fees) was below the presumptive minimum set in
part 70, it was necessary for the State to include a permit fee
demonstration in their PROGRAM submittal.
Legislation recently adopted by the Colorado Legislature (SB 217)
reduced the per ton fee for regulated air pollutants. After careful
review, the State has determined that these fees would support the
Colorado PROGRAM costs as required by 40 CFR part 70.9(a).
Subsequently, the State submitted a material change to their original
PROGRAM submittal on July 27, 1994, which consisted of a revised permit
fee demonstration and addressed how the State will adjust to the new
fees set in SB 217 and adequately fund the operation of the Colorado
PROGRAM. The revised permit fee demonstration also included a workload
analysis which estimated the annual cost of running the PROGRAM to be
$1.87 million for fiscal year 1994/1995; and a new fee structure that
consists of a $9.02 per ton fee for regulated air pollutants for fiscal
year 1994, to be increased on an annual basis to $10.87 in fiscal year
1995, $13.66 in fiscal year 1996 and $11.58 in fiscal year 1997; with
the additional HAP and permit application processing fees given above.
Upon review of the revised permit fee demonstration, the EPA noted
the following concern (which is not a disapproval issue at this time):
Although the Colorado Legislature gives the State the authority to
assess and collect annual permit fees in an amount sufficient to cover
all reasonable direct and indirect costs of the PROGRAM for a two year
period of time, the State must authorize an increase in the spending of
such fees for title V activities annually. If such an increase in
spending authority is not granted, and the State is not able to fund
all the costs of the PROGRAM, the 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.
Colorado 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 Colorado'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 Colorado to issue permits that assure compliance
with all section 112 requirements.
EPA is interpreting the above legal authority to mean that Colorado
is able to carry out all section 112 activities. However, the following
areas of concern have been identified in the Colorado PROGRAM: The
Colorado Air Quality Control Act (25-7-109.6(5)) states that
implementation and effectiveness of an accidental release prevention
program, required under section 112(r) of the Act, is contingent on the
receipt of federal funding. This condition is unacceptable since the
State cannot put a condition on a specific requirement mandated through
EPA rulemaking. Section 25-7-109.6(5) of the Colorado Air Quality
Control Act must be revised before full PROGRAM approval can be
granted. An additional concern lies in the definition of applicable
requirement in section I.B.9. of part A of Regulation 3 which excludes
the contents of any risk management plan, and in section V.C.17 of part
C of Regulation 3 which specifies that the contents of risk management
plans shall not be incorporated into operating permits. Although the
contents of risk management plans are not an applicable requirement at
this time that must be incorporated into operating permits, section
112(r) rulemaking is ongoing in an effort to define the requirements.
Changes to the PROGRAM may be necessary in the future to comply with
any new or supplemental rulemaking concerning section 112(r).
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.
b. Implementation of 112(g) upon program approval. As a condition
of approval of the part 70 PROGRAM, Colorado is required to implement
section 112(g) of the Act from the effective date of the part 70
PROGRAM. Imposition of case-by-case determinations of maximum
achievable control technology (MACT) or offsets under section 112(g)
will require the use of a mechanism for establishing federally
enforceable restrictions on a source-specific basis. The EPA is
proposing to approve Colorado's preconstruction permitting program
found in Regulation 3, part B under the authority of title V and part
70 solely for the purpose of implementing section 112(g) during the
transition period between title V approval and adoption of a State rule
implementing EPA's section 112(g) regulations. EPA believes this
approval is necessary so that Colorado has a mechanism in place to
establish federally enforceable restrictions for section 112(g)
purposes from the date of part 70 approval. Section 112(l) provides
statutory authority for approval for the use of State air programs to
implement section 112(g), and title V and section 112(g) provide
authority for this limited approval because of the direct linkage
between implementation of section 112(g) and title V. The scope of this
approval is narrowly limited to section 112(g), and does not confer or
imply approval for purposes of any other provision under the Act. If
Colorado does not wish to implement section 112(g) through its
preconstruction permit program and can demonstrate that an alternative
means of implementing section 112(g) exists, the EPA may, in the final
action approving Colorado's PROGRAM, approve the alternative instead.
To the extent Colorado does not have the authority to regulate HAPs
through existing State law, the State may disallow modifications during
the transition period.
This approval is for an interim period only, until such time as the
State is able to adopt regulations consistent with any regulations
promulgated by EPA to implement section 112(g). Accordingly, EPA is
proposing to limit the duration of this approval to a reasonable time
following promulgation of section 112(g) regulations so that Colorado,
acting expeditiously, will be able to adopt regulations consistent with
the section 112(g) regulations. The EPA is proposing here to limit the
duration of this approval to 12 months following promulgation by EPA of
section 112(g) regulations. Comment is solicited on whether 12 months
is an appropriate period considering Colorado's procedures for adoption
of federal regulations.
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 section 112 General Provisions Subpart A and 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, the 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. Colorado has informed EPA that it intends to accept
delegation of section 112 standards through a combination of case-by-
case rulemaking and incorporation by reference. This program applies to
both existing and future standards but is limited to sources covered by
the part 70 program.
The radionuclide national emission standard for HAPs (NESHAP) is a
section 112 regulation and therefore, also an applicable requirement
under the State PROGRAM. Sources which are currently defined as part 70
sources and emit radionuclides are subject to federal radionuclide
standards. Additionally, sources which are not currently part 70
sources may be defined as major sources under forthcoming federal
radionuclide regulations. The EPA will work with the State in the
development of its radionuclide program to ensure that permits are
issued in a timely manner.
d. Program for implementing title IV of the Act. Colorado's PROGRAM
contains adequate authority to issue permits which reflect the
requirements of Title IV of the Act, and commits to adopt the rules and
requirements promulgated by EPA to implement an acid rain program
through the title V permit.
B. Options for Approval/Disapproval and Implications
The EPA is proposing to grant interim approval to the operating
permits program submitted by the State of Colorado on November 5, 1993.
The State must make the following changes, as discussed above, to
receive full PROGRAM approval: (1) The State must revise its
administrative process in section II.D.5 of part A of Regulation 3, for
adding additional exemptions to the insignificant activities list, to
require approval by the EPA of any new exemptions before such
exemptions can be utilized by a source. (2) The State must revise the
Colorado Air Quality Control Act (25-7-109.6(5)) to remove the
condition that an accidental release prevention program will only be
implemented if federal funds are available. Evidence of these statutory
and regulatory revisions must be submitted to the EPA within 18 months
of the EPA's interim approval of the Colorado PROGRAM.
This interim approval, which may not be renewed, extends for a
period of up to two years. During the interim approval period, the
State is protected from sanctions for failure to have a program, and
EPA is not obligated to promulgate a Federal permits program in the
State. Permits issued under a program with interim approval have full
standing with respect to part 70, and the one year time period for
submittal of permit applications by subject sources begins upon interim
approval, as does the three year time period for processing the initial
permit applications.
The EPA is proposing to disapprove the operating permits program
submitted by Colorado if the specified changes are not made within 18
months of the effective date of final interim approval. If promulgated,
this disapproval would constitute a disapproval under section 502(d) of
the Act (see generally 57 FR 32253-54). As provided under section
502(d)(1) of the Act, Colorado would have up to 180 days from the date
of EPA's notification of disapproval to the Governor of Colorado to
revise and resubmit the PROGRAM. The EPA will apply sanctions to
Colorado if the Governor fails to submit a corrected PROGRAM within 18
months following EPA disapproval of the PROGRAM. If the State has not
come into compliance within 6 months after EPA applies the first
sanction, a second sanction is required. In addition, discretionary
sanctions may be applied any time during the 18-month period following
PROGRAM disapproval. If the State has not received full PROGRAM
approval within two years after final interim PROGRAM approval, the EPA
must promulgate, administer, and enforce a Federal permits program for
the State.
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, the 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 only
applies to sources covered by the part 70 program.
III. Administrative Requirements
A. Request for Public Comments
The EPA is requesting comments on all aspects of this proposed
rule. Copies of the State's submittal and other information relied upon
for the proposed interim approval are contained in a docket maintained
at the EPA Regional Office. The docket is an organized and complete
file of all the information submitted to, or otherwise considered by,
EPA in the development of this proposed rulemaking. The principal
purposes of the docket are:
(1) To allow interested parties a means to identify and locate
documents so that they can effectively participate in the rulemaking
process, and
(2) To serve as the record in case of judicial review. The EPA will
consider any comments received by November 14, 1994.
B. Executive Order 12866
The Office of Management and Budget has exempted this action from
Executive Order 12866 review.
C. Regulatory Flexibility Act
The EPA's actions under section 502 of the Act do not create any
new requirements, but simply address operating permits programs
submitted to satisfy the requirements of 40 CFR part 70. Because this
action does not impose any new requirements, it does not have a
significant impact on a substantial number of small entities.
List of Subjects in 40 CFR Part 70
Environmental protection, Administrative practice and procedure,
Air pollution control, Intergovernmental relations, Operating permits,
Reporting and recordkeeping requirements.
Authority: 42 U.S.C. 7401-76719.
Dated: September 30, 1994.
Jack W. McGraw,
Acting Regional Administrator.
[FR Doc. 94-25388 Filed 10-13-94; 8:45 am]
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