[Federal Register Volume 60, Number 219 (Tuesday, November 14, 1995)]
[Rules and Regulations]
[Pages 57188-57191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28067]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70
[IN001; FRL-5331-2]
Clean Air Act Final Interim Approval of Operating Permits
Program; Indiana
AGENCY: Environmental Protection Agency (USEPA).
ACTION: Final interim approval.
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SUMMARY: The USEPA is promulgating an interim approval of the operating
permits program submitted by Indiana for the purpose of complying with
Federal requirements which mandate that States develop, and submit to
USEPA, programs for issuing operating permits to all major stationary
sources, and to certain other sources.
EFFECTIVE DATE: The effective date of this action is December 14, 1995.
ADDRESSES: Copies of the State's submittal and other supporting
information used in developing the final interim approval are available
for inspection during normal business hours at the following location:
USEPA Region 5, 77 West Jackson Boulevard, AR-18J, Chicago, Illinois,
60604. Please contact Sam Portanova at (312) 886-3189 to arrange a time
if inspection of the submittal is desired.
FOR FURTHER INFORMATION CONTACT: Sam Portanova, AR-18J, 77 West Jackson
Boulevard, Chicago, Illinois, 60604, (312) 886-3189.
SUPPLEMENTARY INFORMATION:
I. Background and Purpose
As required under Title V of the Clean Air Act (``the Act'') as
amended (1990), USEPA has promulgated regulations which define the
minimum elements of an approvable State operating permits program and
the corresponding standards and procedures by which the USEPA will
approve, oversee, and withdraw approval of State operating permits
programs (see 57 FR 32250 (July 21, 1992)). These regulations are
codified at 40 Code of Federal Regulations (CFR) part 70. Title V
requires States to develop, and submit to USEPA, 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
USEPA by November 15, 1993, and that USEPA act to approve or disapprove
each program within 1 year after receiving the submittal. 40 CFR
70.4(e)(2), however, allows the Administrator to extend the review
period of a State's submittal if the State's submission is materially
altered during the 1-year review period. This additional review period
may not extend beyond 1 year following receipt of the revised
submission.
The USEPA'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, USEPA may grant the program interim
approval for a period of up to 2 years. If USEPA 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 May 22, 1995, USEPA proposed an interim approval of the
operating permits program for Indiana (see 60 FR 27064) and received
public comments on the proposal. In this document, USEPA is taking
final action to promulgate an interim approval of the operating permits
program for Indiana.
II. Final Action and Implications
A. Analysis of State Submission
The USEPA is promulgating an interim approval of the operating
permits program submitted by Indiana on August 10, 1994. Indiana's
program substantially meets the requirements of part 70; however,
certain issues must be addressed in the State's submittal before USEPA
can grant full approval.
For more detailed information on the analysis of the State's
submission, please refer to the May 22, 1995, proposed interim approval
of the Indiana Title V program (see 60 FR 27064) and the technical
support document (TSD) included with the docket of the proposed interim
approval.
1. Regulations and Program Implementation
a. Applicability. The Indiana program meets the requirements of 40
CFR 70.2 and 70.3 for applicability in 326 IAC 2-7-2. Please refer to
the proposed interim approval and the TSD included with the docket of
the proposed interim approval for more information regarding the
language in 326 IAC 2-7-2.
b. Permit Applications. A deficiency in the State's permit
application requirements exists concerning insignificant activities,
which are defined in 326 IAC 2-7-1(20). In the Indiana program, the
insignificant activity threshold level for sulfur dioxide (SO2) is
10 pounds per hour (lb/hr) or 50 pounds per day (lb/day) and the
insignificant activity threshold level for hazardous air pollutants
(HAP) is 4 tons per year (tpy) for one HAP or 10 tpy of any combination
of HAPs. USEPA
[[Page 57189]]
proposed interim approval for these threshold levels in the May 22,
1995, Federal Register.
USEPA is promulgating interim approval to the SO2 and HAP
insignificant activity levels and promulgating full approval to the
volatile organic compounds, particulate matter, carbon monoxide,
nitrogen oxides, and lead insignificant activity levels. The rationale
for the interim approval status is provided in the proposed interim
approval and the TSD included with the docket of the proposed interim
approval.
c. Permit issuance, renewal, reopenings and revisions. The Indiana
program meets the requirements of 40 CFR 70.7 and 70.8 for permit
issuance, renewal, reopenings, and public participation and the
requirements of 40 CFR 70.4(b)(12) for operational flexibility. Please
refer to the proposed interim approval and the TSD included with the
docket of the proposed interim approval for more information regarding
the language in 326 IAC 2-7-11 for administrative permit amendments.
In the May 22, 1995, notice, USEPA proposed interim approval with
respect to the State's threshold levels for group processing of permits
(326 IAC 2-7-12(c)). In that notice, USEPA stated that Indiana
program's threshold level for minor permit modification (MPM) group
processing eligibility was not as stringent as the part 70 threshold
level. To obtain full approval, USEPA stated that Indiana must
establish a group processing threshold consistent with 40 CFR
70.7(e)(3)(i), or demonstrate that an alternative threshold would
alleviate severe administrative burden and result in trivial
environmental impact. The May 22, 1995, notice stated that ``if EPA's
concerns are addressed by a change in the State's final regulations or
by a State demonstration before final action on this notice, then EPA
can fully approve the State's group processing threshold levels.''
In an August 30, 1995, letter to USEPA, Indiana submitted a
demonstration that an alternative threshold would alleviate severe
administrative burden and would result in trivial environmental impact.
In this letter, Indiana noted that its Title V regulation requires the
State to provide public participation for all MPMs, including group
processing MPMs. Since part 70 does not require public participation
for MPMs, the State requirement is more stringent and will require
public participation for many more permit modifications than the
Federal rule requires. Indiana's group processing threshold level will
allow the State to consolidate more of its MPM public notice and
comment periods. Although staff review of modifications as individuals
or as a group may not significantly differ, the administrative savings
incurred by the State to provide public notice of these permits on an
individual basis would be significant. Under its current permit
programs, the State processes approximately 115-125 permit exemptions
per year based on the stated group processing thresholds; and the State
estimates that a majority of these might have to undergo individual
processing under a part 70 threshold.
With regard to environmental impact, the State's letter also notes
that under its program, more modifications than required by part 70
would be subject to permitting authority review and public notice. The
level and result of permitting authority review should not be impacted
by individual or group processing. In fact, since group processing
actions must be completed within 180 days as opposed to 90 days, there
may be opportunity for greater review and consideration. In addition,
increased opportunity for public comment, whether as individual or
group modifications, could result in enhanced environmental benefits,
but at the very least will not directly result in adverse environmental
impacts. Based on these considerations, USEPA believes the State has
met the required justification for a different group processing
threshold and is promulgating full approval for the Indiana MPM group
processing threshold levels.
2. Provisions Implementing the Requirements of Other Titles of the Act
a. Authority and/or Commitments for Section 112 Implementation.
Indiana has demonstrated in its Title V program submittal adequate
legal authority to implement and enforce all section 112 requirements
through Title V permits. This legal authority is contained in Indiana's
enabling legislation and in regulatory provisions defining ``applicable
requirements'' and stating that the permit must incorporate all
applicable requirements. USEPA has determined that this legal authority
is sufficient to allow Indiana to issue permits that assure compliance
with all section 112 requirements.
The USEPA is accepting the above legal authority as an adequate
demonstration that Indiana is able to carry out all section 112
activities relative to Title V sources. For further rationale on this
interpretation, please refer to the proposed interim approval, the TSD
accompanying the proposed interim approval, and the April 13, 1993,
guidance memorandum titled ``Title V Program Approval Criteria for
section 112 activities,'' signed by John Seitz, Director of the Office
of Air Quality Planning and Standards.
b. Implementation of Section 112(g) Upon Program Approval. As a
condition of approval of the Title V program, Indiana is required to
implement section 112(g) of the Act. Indiana has promulgated a ``MACT
Rule'' in 326 IAC 2-1-3.3. The purpose of this regulation is to provide
Indiana the necessary mechanism to implement section 112(g).
According to the Federal Register interpretive notice published on
February 14, 1995 (60 FR 8333), the requirements of section 112(g) will
not become effective until after USEPA has promulgated a regulation
addressing that provision. The Federal Register notice sets forth in
detail the rationale for this interpretation. At the time of Indiana's
program submittal and USEPA's subsequent review period, USEPA had not
promulgated a federal regulation containing the specific requirements
of section 112(g).
The section 112(g) interpretive notice explains that USEPA is still
considering whether the effective date of section 112(g) should be
delayed beyond the date of promulgation of the Federal regulation so as
to allow States time to adopt regulations implementing the Federal
regulation, and that USEPA will provide for any such additional delay
in the final section 112(g) rulemaking. Unless and until USEPA provides
for such an additional postponement of section 112(g), Indiana must be
able to implement section 112(g) during the period between promulgation
of the Federal section 112(g) regulation and adoption of implementing
State regulations. 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.
For this reason, USEPA is promulgating approval of Indiana's MACT
regulation (326 IAC 2-1-3.3) under the authority of Title V and part 70
solely for the purpose of implementing section 112(g) during the
transition period between promulgation of the section 112(g) regulation
and adoption by Indiana of regulations implementing the provisions of
section 112(g). However, since the approval is for the single purpose
of providing a mechanism to implement section 112(g) during the
transition period, the approval itself will be without effect if USEPA
decides in the final section 112(g) regulation that sources are not
[[Page 57190]]
subject to the requirements of the regulation until State regulations
are adopted. The USEPA is limiting the duration of this proposal to 18
months following promulgation by USEPA of the section 112(g)
regulation. Once promulgated by USEPA, the 112(g) regulation will serve
as the mechanism for establishing federally enforceable case-by-case
MACT emission limits for HAPs. USEPA is interpreting Indiana's legal
authority and commitment (Enclosure H, page 33 of the Indiana program
submittal) to mean that, upon promulgation of the section 112(g)
regulation, the State will expeditiously adopt regulations consistent
with the provisions of 112(g).
Although section 112(l) generally provides authority for approval
of State air toxics programs, 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 section 110 or any other provision under
the Act.
c. Program for Delegation of Section 112 Standards as Promulgated.
The requirements for a Title V program approval, specified in 40 CFR
70.4(b), also encompass section 112(l)(5) requirements for approval of
a State program for delegation of section 112 standards as promulgated
by USEPA 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 USEPA is
promulgating approval, under section 112(l)(5) and 40 CFR 63.91, of
Indiana's program for receiving delegation of section 112 standards
that are unchanged from the Federal standards as promulgated. This
program approval applies to both existing and future standards, but is
limited to sources covered by the part 70 program.
Indiana has informed USEPA that it intends to accept delegation of
section 112 standards through rule adoption. The details of this
delegation mechanism will be set forth in a Memorandum of Agreement
between Indiana and USEPA expected to be completed prior to approval of
Indiana's section 112(l) program for delegations.
d. Limiting HAP Emissions Through a Federally Enforceable State
Operating Permit (FESOP) Program. On August 18, 1995, USEPA published a
Federal Register notice promulgating a direct-final approval of the
Indiana FESOP regulation which would establish federally enforceable
limits on sources' potential to emit. If USEPA does not receive any
comments on this notice by September 18, 1995, the approval will become
effective on October 17, 1995, and Indiana will have the ability to
place federally enforceable limits on HAPs in addition to criteria
pollutants through a FESOP permit. The federal enforceability of HAP
limits in a FESOP permit is addressed in the August 18, 1995, Federal
Register notice.
e. Title IV. Indiana's program contains adequate authority to issue
permits which reflect the requirements of Title IV and its implementing
regulations. 326 IAC 21-1-1 incorporates by reference 40 CFR part 72,
75, 76, 77, and 78. Indiana's program submittal contains a commitment
to revise its regulations as necessary to accommodate federal revisions
and additions to Title IV and the Acid Rain regulations once they are
promulgated.
B. Response to Public Comments
The USEPA received comments from two parties. The USEPA's responses
to these comments are summarized in this section.
1. Comment by Mobil Oil Company
Mobil Oil Company commented that it supports the proposed interim
approval of the Indiana Title V program. Mobil, however, urges USEPA to
expeditiously approve a federally enforceable state operating permit
(FESOP) program for the State of Indiana so that sources will have a
federally enforceable mechanism to limit potential to emit so as to
stay below the Title V threshold level.
USEPA agrees that a FESOP program may provide a useful mechanism
for reducing the permitting burden on sources that can limit potential
to emit to below the Title V threshold level. Indiana has submitted a
FESOP program to USEPA as a proposed revision to the State
implementation plan and USEPA has published a direct-final approval
notice for the Indiana FESOP program in the August 18, 1995, Federal
Register.
2. Comment by Eli Lilly and Company
Eli Lilly and Company (Lilly) commented that it supports the
proposed interim approval of the Indiana Title V program. Lilly,
however, commented on a definition that was not addressed in the
proposed interim approval. Lilly wants USEPA to clarify that the
definitions of ``Title I modification'' and ``case-by-case
determination of an emission limit or other standard,'' as used in 326
IAC 2-7, do not include minor new source review (NSR) requirements.
This is commonly known as the ``narrow definition of a Title I
modification.'' Such a definition would allow minor NSR modifications
to be processed through the minor permit modification (MPM) procedure
of 326 IAC 2-7-12 or the operational flexibility procedures of 326 IAC
2-7-20.
In an August 29, 1995, letter to USEPA, Indiana has stated that, it
developed the State Title V regulation to allow flexibility in this
definition. Indiana also stated that it did not indicate at any time
during the regulation development process that it would include minor
NSR modifications as ``Title I modifications.'' The August 29, 1995,
letter states that, since the use of the narrow definition of ``Title I
modification'' is not a USEPA interim approval issue and USEPA stated
in a June 20, 1995, letter that it plans to adopt the narrow definition
in upcoming supplemental rulemaking, Indiana will be employing the
narrow definition in the implementation of its Title V program.
Consistent with actions taken on other Title V programs, USEPA is
accepting Indiana's intention to use the narrow definition of ``Title I
modification'' and is not identifying this interpretation as an interim
approval issue in this notice.
C. Options for Approval/Disapproval and Implications
The USEPA is promulgating an interim approval to the operating
permits program submitted by Indiana on August 10, 1994. The State must
make the following changes to receive full approval: The State must
amend its insignificant activities levels for SO2 and HAPs to
levels which assure that large sources are included in Title V review.
Indiana's program is not fully approvable because of this deficiency.
The program, however, substantially meets the requirements of part 70
because Indiana's regulations and legislation comply with all other
part 70 requirements.
D. Federal Oversight and Sanctions
This interim approval, which may not be renewed, extends for a
period of up to 2 years from the effective date of this promulgation.
During the interim approval period, the State is protected from
sanctions for failure to have a program, and USEPA 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 1-year time period for submittal of permit applications by
subject sources begins upon interim approval, as does
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the 3-year time period for processing the initial permit applications.
Because the interim approval automatically expires 2 years after
promulgation of a final interim approval, the State may submit its
interim corrections at any time. However, the State may not submit its
corrections any later than 18 months after promulgation of final
interim approval. The USEPA will then have 6 months to promulgate a
final action.
Following final interim approval, if the State failed to submit a
complete corrective program for full approval by 6 months before
expiration of the interim approval, USEPA would start an 18-month clock
for the mandatory imposition of section 179(b) sanctions. Section
179(b) of the Act mandates the impositions of the following sanctions:
(1) 2 to 1 emission offsets for new construction in nonattainment areas
and (2) restriction on federal funding of highway projects.
If the State then failed to submit a corrective program that USEPA
found complete before the expiration of that 18-month period, USEPA
would be required to apply the emission offset sanction, which would
remain in effect until USEPA determined that the State had submitted a
complete corrective program. Moreover, if the Administrator found a
lack of good faith on the part of the State, both sanctions under
section 179(b) would apply after the expiration of the 18-month period
until the Administrator determined that the State had come into
compliance. In any case, if, 6 months after the application of the
first sanction, the State still had not submitted a corrective program
that USEPA found complete, the highway sanction would be required.
If, following final interim approval, USEPA were to disapprove the
State's complete corrective program, USEPA would be required to apply
the emission offset sanction on the date 18 months after the effective
date of the disapproval, unless, prior to that date, the State had
submitted a revised program and USEPA had determined that it corrected
the deficiencies that prompted the disapproval. Moreover, if the
Administrator found a lack of good faith on the part of the State, both
sanctions under section 179(b) would apply after the expiration of the
18-month period until the Administrator determined that the State had
come into compliance. In all cases, if, 6 months after USEPA applied
the first sanction, the State had not submitted a revised program that
USEPA had determined corrected the deficiencies that prompted
disapproval, the highway sanction would be required.
In addition, discretionary sanctions may be applied where warranted
any time after the end of an interim approval period if a State has not
timely submitted a complete corrective program or USEPA had disapproved
a submitted corrective program. Moreover, if USEPA has not granted full
approval to a State program by the expiration of an interim approval
USEPA must promulgate, administer and enforce a Federal permits program
for that State upon interim approval expiration.
III. Administrative Requirements
A. Executive Order 12866
The Office of Management and Budget has exempted this action from
Executive Order 12866 review.
B. Regulatory Flexibility Act
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA
must prepare a regulatory flexibility analysis assessing the impact of
any proposed or final regulation on small entities. 5 U.S.C. sections
603 and 604. Alternatively, USEPA may certify that the regulation 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.
Operating permits program approvals under section 502 of the Act do
not create any new requirements, but simply approve requirements that
the State is already imposing. Therefore, because the federal operating
permits program approval does not impose any new requirements, I
certify 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 regulatory flexibility
analysis would constitute federal inquiry into the economic
reasonableness of State action. The Act forbids USEPA to base its
actions concerning operating permits programs on such grounds. Union
Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42
U.S.C. 7410(a)(2).
C. Unfunded Mandates
Under Section 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, USEPA
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 tribunal governments in the aggregate, or to
the private sector, of $100 million or more. In such cases, under
Section 205, USEPA must select the most cost-effective and least
burdensome alternative that achieves the objectives of the rule and is
consistent with statutory requirements. Also in such cases, Section 203
requires USEPA to establish a plan for informing and advising any small
governments that may be significantly or uniquely impacted by the rule.
USEPA has determined that the final approval action promulgated
today does not include a Federal mandate that may result in estimated
costs of $100 million or more to either State, local, or tribal
governments in the aggregate, or to the private sector.
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.
Dated: October 27, 1995.
Valdas V. Adamkus,
Regional Administrator.
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. Appendix A to part 70 is amended by adding the entry for Indiana
in alphabetical order to read as follows:
Appendix A to Part 70--Approval Status of State and Local Operating
Permits Programs
* * * * *
Indiana
(a) The Indiana Department of Environmental Management:
submitted on August 10, 1994; interim approval effective on November
14, 1995; interim approval expires November 14, 1997.
(b) (Reserved)
* * * * *
[FR Doc. 95-28067 Filed 11-13-95; 8:45 am]
BILLING CODE 6560-50-P
