DRAFT - DOES NOT REPRESENT FINAL AGENCY POSITIONS
A-93-50
VI-A-5
PREAMBLE TO REVISED PART 51 AND Part 70
DRAFT
February 18, 1998
TABLE OF CONTENTS
I. Background . . . . . . . . . . . . . . . . . . . . . . . . .4
II. Summary of Changes For Which There Was Not Adverse Public
Comment . . . . . . . . . . . . . . . . . . . . . . . . . .7
III. Changes to Section 70.2. . . . . . . . . . . . . . . . . 10
A. Advance Approval. . . . . . . . . . . . . . . . . . . 10
B. Alternative Operating Scenarios . . . . . . . . . . . 19
C. Eligible Indian Tribe . . . . . . . . . . . . . . . . 21
D. Emissions Cap Permit. . . . . . . . . . . . . . . . . 21
E. Indian Tribe. . . . . . . . . . . . . . . . . . . . . 22
F. Major Source. . . . . . . . . . . . . . . . . . . . . 22
G. Permit Revision/Permit Modification . . . . . . . . . 62
H. Plantwide Applicability Limit . . . . . . . . . . . . 64
I. Potential to Emit . . . . . . . . . . . . . . . . . . 66
J. Regulated Air Pollutant . . . . . . . . . . . . . . . 69
K. Research and Development Activities . . . . . . . . . 70
L. Section 502(b)(10) Changes. . . . . . . . . . . . . . 70
M. State Review Program. . . . . . . . . . . . . . . . . 70
N. Title I Modification. . . . . . . . . . . . . . . . . 71
IV. Changes to Section 70.3 . . . . . . . . . . . . . . . . . 72
A. Part C and D Sources. . . . . . . . . . . . . . . . . 72
B. Section 112(r) Applicability. . . . . . . . . . . . . 74
V. Changes to Section 70.4. . . . . . . . . . . . . . . . . . 75
A. Authority to Issue Emissions Cap Permits and Advance NSR75
B. Trading Under Permitted Emissions Caps. . . . . . . . 78
C. Provisions for Section 502(b)(10) Changes . . . . . . 82
D. Off-Permit Changes. . . . . . . . . . . . . . . . . . 85
E. Changes Under Section 502(b)(10). . . . . . . . . . . 90
F. Time Period for Judicial Review . . . . . . . . . . . 93
G. Interim Approval Criteria . . . . . . . . . . . . . . 94
VI. Changes to Section 70.5 . . . . . . . . . . . . . . . . . 95
A. Insignificant Activities. . . . . . . . . . . . . . . 95
B. Certification Language. . . . . . . . . . . . . . . . 97
VII. Changes to Section 70.6. . . . . . . . . . . . . . . . . 99
A. Weekly Reporting of Alternative Scenarios . . . . . . 99
B. Emergency Defense . . . . . . . . . . . . . . . . . .100
XI. Program Transition. . . . . . . . . . . . . . . . . . . .114
A. Submission of Initial Programs. . . . . . . . . . . .114
B. Submissions of Program Revisions to Conform to the
Revised Part 70. . . . . . . . . . . . . . . . . . .116
XII. Tribal Programs. . . . . . . . . . . . . . . . . . . . .120
XIII. Administrative Requirements . . . . . . . . . . . . . .125
A. Docket. . . . . . . . . . . . . . . . . . . . . . . .125
B. Executive Order (E.O.) 12866. . . . . . . . . . . . .125
C. Regulatory Flexibility Act Compliance . . . . . . . .126
D. Paperwork Reduction Act . . . . . . . . . . . . . . .127
E. Unfunded Mandates Reform Act. . . . . . . . . . . . .129
F. Submission to Congress and the General Accounting Office130
[NOTE: Sections VIII., IX., and X. are not included in this
February 18, 1998 draft preamble.]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51 and 70
[FRL- ]
Operating Permits Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
------------------------------------------------------------
SUMMARY: The EPA is today promulgating new streamlined
procedures for revising stationary source operating permits
issued by State and local permitting authorities under title V of
the Clean Air Act (Act). These revisions to part 70 were
proposed in two notices published in the Federal Register on
August 29, 1994 and on August 31, 1995.
In addition, today's notice promulgates numerous other
changes to part 70 that were proposed in those two notices.
Among these are changes to: the definition of major source with
respect to research and development activities, support
facilities, and fugitive emissions; provisions related to
operational flexibility under emissions caps; the certification
of compliance that a responsible official of a permitted source
is required to submit; and the affirmative defense available for
violations of permit terms during an emergency. Today's notice
also promulgates revised procedural requirements for "minor" new
source review (NSR) permitting under title I of the Act to
provide additional flexibility to States in providing public
review for minor NSR actions.
DATES: The regulatory amendments announced herein take effect on
[60 days from the date of publication], 1997.
ADDRESSES:
Docket: Supporting information used in developing the
regulatory revisions to part 70 are contained in Docket No.
A-93-50. This docket is available for public inspection and
copying between 8:30 a.m. and 3:30 p.m. Monday through Friday. A
reasonable fee may be charged for copying. The address of the
EPA Air Docket is: room M-1500, Waterside Mall, 401 M Street SW,
Washington, DC 20460.
FOR FURTHER INFORMATION CONTACT: Ray Vogel (919/541-3153,
vogel.ray@epamail.epa.gov) or Roger Powell (919/541-5331,
powell.roger@epamail.epa.gov), mail drop 12, United States
Environmental Protection Agency, Office of Air Quality Planning
and Standards, Information Transfer and Program Integration
Division, Research Triangle Park, North Carolina 27711.
SUPPLEMENTARY INFORMATION:
Today's proposal reflects the principles articulated in the
President's and the Vice President's March 16, 1995 report,
"Reinventing Environmental Regulation." That report establishes
goals for partnerships between EPA and State and local agencies
in development of environmental regulations. These goals are:
minimizing costs, providing flexibility in implementing programs,
tailoring solutions to the problem, and shifting responsibilities
to State and local agencies. The Agency believes that the
proposal in today's notice meets the goals of the report.
Table of Contents
The contents of today's preamble are in the following
format:
I. Background
A. Operating Permits Regulations
B. Proposed Permit Revision System
C. Other Proposed Revisions in Today's Notice
D. Environmental Benefits
E. Structure of Preamble
II. Summary of Changes For Which There Was Not Adverse Public
Comment
III. Changes to Section 70.2
IV. Changes to Section 70.3
V. Changes to Section 70.4
VI. Changes to Section 70.5(a)
VII. Changes to Section 70.6
VIII. Changes to Section 70.7
A. Structure of The Revised Permit Revision System
B. Notice Of Application Completeness
C. Expedited Permit Revisions
D. Minor Permit Revisions
E. Significant Permit Revisions
F. Merging Programs
G. Permit Shield
H. Incorporation of MACT Standards
I. Public Review
IX. Changes to Section 70.8
X. Changes to Part 51
XI. Program Transition
XII. Tribal Programs
XIII. Administrative Requirements
A. Docket
B. Executive Order (E.O.) 12866
C. Regulatory Flexibility Act Compliance
D. Paperwork Reduction Act
E. Unfunded Mandates Reform Act
F. Submission to Congress and the General Accounting Office
I. Background
A. Operating Permits Regulations
Title V requires that EPA develop regulations which set
minimum standards for State operating permits programs. Those
regulations, codified in part 70 of chapter I of title 40 of the
Code of Federal Regulations, were originally promulgated on
July 21, 1992 (57 FR 32250). On August 29, 1994, EPA proposed a
number of revisions to the part 70 regulations as a result of
negotiations with litigants who petitioned for review of part 70
after its promulgation (59 FR 44460). The August 1994 proposal
primarily included new procedures for revising permits. In
response to comments on the 1994 proposal, on August 31, 1995,
EPA proposed further revisions to part 70 including a proposal
for a simpler permit revision approach designed to build upon
existing State permitting programs (60 FR 45530).
Title V also requires that States submit their operating
permit programs for EPA approval and that EPA promulgate and
administer a Federal operating permits program for States that
have not obtained EPA approval of a program by November 15, 1995.
On November 15, 1997, EPA began administering Federal operating
permits programs in Indian country, except where a part 70
program was approved. The EPA's regulations for the Federal
operating permits program are codified at part 71, which was
promulgated on July 1, 1996 (61 FR 34202). In large part the
part 71 regulations are modeled on the original part 70. The EPA
will also promulgate in a future rulemaking action a phase II of
the part 71 regulations, which will consist of regulatory changes
that will make part 71 consistent with part 70 as revised by
today's rulemaking.
B. Permit Revision System
The August 1994 notice proposed to revise 70.7 to
establish a four-track system for revising operating permits.
Comments received at the October 19, 1994 public hearing and
comments submitted to the docket indicate that the proposed four-track system was widely perceived as too complicated,
prescriptive, and disruptive to existing State programs. In
response to those concerns, EPA sought further input from
representatives of State and local permitting agencies, industry,
and environmental groups to learn more directly about their
implementation concerns. The EPA received many thoughtful ideas
from these groups about streamlining the process for permit
revisions. After considering comments received on the August
1995 proposal, EPA is today promulgating final revisions to
part 70 based largely on the August 1995 proposal for permit
revisions.
C. Other Revisions in Today's Notice
Today's notice also promulgates additional part 70 revisions
proposed in the August 1994 and August 1995 notices. In part,
these revisions involve provisions in the current part 70
regarding certification by a responsible official, the
affirmative defense for violations of permit terms during an
emergency, and the definition of title I modification. Today's
notice also revises the public review requirements of title I
applicable to minor NSR permits.
Finally, in today's notice EPA is clarifying that research
and development (R&D) activities located with a major source
under sections 112, 302(j), or part D of title I of the Act, need
not be considered part of that major source or required to obtain
a permit, unless the R&D activities together constitute a major
source.
A number of revisions to the definitions in 70.2 are
included in today's notice to be consistent with the promulgated
revisions.
D. Environmental Benefits
Implementation of today's action will help achieve the
environmental benefits that Congress expected from an operating
permits program. The revisions tailor public and EPA review to
the environmental significance of the changes being made. This
review should improve compliance with the Act and its
implementing regulations by sources undertaking permit revisions
with potentially substantial environmental consequences, such as
those which avoid major source requirements by offsetting
emissions increases at new or modified units with emissions
decreases at existing units. At the same time, the streamlined
permit revision system assures that most permit actions, which
are much less likely to have a major environmental impact, are
revised expeditiously to avoid unnecessary procedural delays and
associated costs. Yet, the system will still assure in all cases
that the source, the public, and governmental agencies are aware
of all of a source's obligations under the Act and regulations
promulgated thereunder, which will improve compliance.
E. Structure of Preamble
This notice sets forth the changes that have been made to
part 70 as a result of the August 1994 and August 1995 proposal
notices. Sections III. through IX. discuss changes to 70.2
through 70.8 where the change is not being made as proposed due
to public comment, or where the change is being made as proposed
and there was significant adverse public comment to the proposed
change. Similarly, section X. discusses proposed revisions to 40
CFR part 51. For these changes, the preamble summarizes the
proposal, summarizes the comments, discusses the proposal and
comments, and explains the final change. Section II of this
preamble lists, without discussion, the changes that are being
made as proposed where there was no significant public comment.
Responses to public comments are provided in greater detail in a
response to comment document which is in the docket for today's
action.
In this preamble, as in part 70, the word "State" includes
any local, city, county, or tribal air pollution control agency,
or any other entity, that is implementing an EPA approved part 70
operating permits program.
II. Summary of Changes For Which There Was Not Adverse Public
Comment
A number of regulatory revisions to part 70 that were
proposed in the August 1994 and August 1995 proposals were not
the subject of substantive public comment and are being
promulgated in today's action as proposed. These revisions are,
therefore, not being discussed in this preamble. For clarity,
however, these revisions are listed herein.
Definitions are added for "Major NSR" and "Minor NSR." The
definitions of "Permit modification" is being deleted. The
definition of "Applicable requirement" is being revised to
include requirements limiting emissions for purposes of offsets
and to specify that section 608 and 609 requirements of title VI
are applicable requirements. The definition of "Administrator"
is being revised to add "her." The definition of R&D activities
is revised to clarify restrictions on separate major source
treatment and to expand eligibility to more sources. The
definition of "Responsible official" is revised to be consistent
with the definition of designated official under the Acid Rain
program.
Under the definition of "Major source," a clarification is
added that for areas defined in paragraph (3) of the definition
with lower major source cutoffs (e.g., serious, severe, or
extreme ozone nonattainment areas), fugitive emissions are to be
counted in determining major source status for those sources
listed in paragraph (2) of the definition. Also, a change is
made to category (viii) to change the size of covered municipal
incinerators from 250 tons of refuse per day to 50 tons.
Sections 70.3(a)(2) and (3) are being revised to clarify
that an area source is the same as a non-major stationary source.
Sections 70.4(b)(11)(iii) and 70.7(a)(2) are revised to
change the period for acting on early reductions under section
112(i)(5) of the Act from 9 months to 12 months. Section 70.4(h)
is revised to add a provision that EPA can continue to issue
phase II acid rain permits when a part 70 program is approved.
Section 70.4(i)(1) is added to provide a timeframe for permitting
authorities to submit program revisions to EPA in response to
revisions to part 70 or a finding by the Administrator that a
program revision is necessary. Section 70.4(j) is added to
specify what version of part 70 will be used in reviewing initial
program submissions. This assumes some initial programs may be
submitted after today's revisions to part 70, which may be true
for Indian Tribes.
Section 70.5(a)(1)(ii) is revised to remove the 12-month
time period for submitting permit revisions except for new stand-alone sources subject to part 70. Section 70.5(a)(1)(iv) is
revised to provide flexibility for submittal of acid rain permit
applications. Section 70.5(a)(2) is revised to add the provision
that an application may be deemed complete if it contains
information necessary to allow processing to begin. Section
70.5(c)(8) is revised to require the permit to identify units
eligible for emissions trading.
Section 70.6(a)(1)(iv) is added to require permit conditions
in accordance with regulations promulgated under section 112(r)
of the Act. Section 70.6(a)(3)(iii)(B) is revised to add
provisions for defining "prompt" with respect to reporting
deviations from the permit and defining "upset conditions."
Clarifying language is added to 70.6(a)(4) with respect to acid
rain SO2 allowances. The wording of 70.6(a)(8) is changed for
purposes of clarity with respect to emissions trading. Section
70.6(c)(1) is revised to be more specific with respect to
compliance assurance. Section 70.6(d)(3) is added to provide for
notifying the public of sources covered under general permits.
Section 70.6(f)(3)(i) is revised to restrict provisions of
section 112(r)(9) of the Act from the permit shield.
Section 70.7(a)(7) is added to specify when new applicable
requirements that are promulgated during permit issuance or
renewal should be included in the permit.
Section 70.8(a)(1) is revised to conform to the new permit
revision system the provisions for submittal of permit revision
applications, proposed permit revisions, and revised permits to
EPA. A provision is added to 70.8(b)(2) to ensure that
affected States are notified of permit revisions at or before the
time the public is notified. The provisions for EPA review in
70.8(c), (c)(1), (d)(3), (d)(4), and (e) are modified to
account for the new permit revision system. Section 70.8(d)(1)
is revised to add a provision that the public be notified of the
beginning and end of EPA's review period; this is for purposes of
knowing when the public's 60-day petition period begins.
Section 70.9(c) is revised to clarify that EPA may require
periodic updates to a permitting authority's permit fee
demonstration.
Section 70.10(a) is modified to clarify the application of
sanctions and operation of a Federal operating permits program.
A provision is added to 70.11(a)(3)(i) to indicate that
States may include mental state as an element of proof for civil
violations for penalties over $10,000.
III. Changes to Section 70.2
A. Advance Approval
1. Summary of Advance NSR Proposal
The EPA, in August 1994, proposed to allow use of the
concept of alternative scenarios to provide advance approval to
construct and operate new or modified units subject to NSR and
section 112(g) (referred to as "advance NSR"). The concept of
advance NSR is that the permitting agency decides the applicable
NSR requirements before an anticipated project or class of
projects is constructed or modified, and then includes that
project's requirements in the part 70 permit for the facility.
As a result, the project is "pre-approved" by the permitting
authority. This pre-approval avoids the need for a separate NSR
permit and a part 70 permit revision prior to the project being
constructed or operated. The NSR permit is unnecessary because
preconstruction review and approval has already occurred for the
anticipated project or class of projects, and the NSR permit
terms are already established (in the part 70 permit). A part 70
permit revision is unnecessary since the part 70 permit already
contains the NSR construction and operation requirements for the
project.
The 1994 proposal to treat advance NSR as an alternative
scenario under part 70 did not propose to materially alter the
underlying NSR State implementation plan (SIP) requirements. The
extent to which advance NSR approval is available, or indeed,
whether it is available at all, is governed by each State minor
NSR program. Since the structures of State NSR programs vary
widely, the degree to which advance NSR is available in a
particular program (if at all) also varies widely. For example,
a State that required a contemporaneous case-by-case review of
each minor NSR action for its ambient impact or for a control
technology determination would likely have limited opportunities
for advance NSR. However, States whose NSR programs apply a
given control technology to a category of changes or who can make
control technology determinations which remain valid for some
time after permit issuance are likely to have opportunities for
advance NSR. For example, a flexible permit for a semiconductor
facility in Oregon grants a minor NSR preapproval for a class of
new and modified VOC emitting activities within certain
"stationary sources" (as defined by Oregon) at the facility. The
permit assures that the preapproved changes comply with the State
minor NSR regulations by including requirements that preapproved
units in certain source categories must employ certain control
equipment, and requirements that the facility stay below a
national ambient air quality standard (NAAQS)-protective cap.
The State of Oregon determined that the preapprovals as set forth
in the part 70 permit satisfied the minor NSR requirements, thus
allowing the changes to be made without the need for further
minor NSR approval or part 70 permit revisions.
The 1994 proposal did not address the extent to which
advance NSR would be available in State NSR programs. It simply
provided that, where advance NSR is available, the alternative
operating scenario provisions of 70.6(a)(9) offer a mechanism
for implementing it through part 70 permits. A permitting
authority considering implementing advance NSR must still
consider the extent to which its NSR rules allow the use of
approaches which forecast specific NSR requirements in advance.
Advance NSR demands an ability to predict the construction and
operational details of the future project or class of projects
with enough certainty to allow the permitting authority to fix
relevant NSR requirements in the part 70 permit, including
compliance monitoring terms. A permitting authority must also
consider whether including advance NSR as an alternative
operating scenario in a part 70 permit would satisfy its own
procedures for drafting, providing for review of, and issuing NSR
permits for the changes which are being preapproved.
In August 1995, EPA further clarified its advance NSR
proposal by proposing to add a definition of advance NSR to
70.2, and by explaining that, in EPA's view, a change subject
to an advance approval scenario would not be a change under
section 502(b)(10) of the Act. Rather, it would constitute a
switch to an alternative operating scenario under 70.6(a)(9).
As the preamble noted, this interpretation would have two
advantages. First, it would allow the use of advance NSR for
title I modifications, and avoid the limitation that changes made
under section 502(b)(10) cannot be title I modifications.
Second, and more important, the 7-day advance notification under
section 502(b)(10) which attaches to each change made under that
section would not apply to changes under the advance NSR
approval. Consequently, where the NSR program allows for advance
approval, and the permitting authority approves an alternative
scenario containing advance approval, the part 70 permit could
allow a source to make the approved change without a part 70
permit revision.
2. Summary of Advance NSR Comments
A large number of industry commenters supported the addition
of the definition of advance NSR. However, several commenters
raised concerns about the approach. An environmental commenter
believed that advance NSR should be allowed only for specifically
identified new units whose impacts have already been evaluated.
The commenter was concerned that, without this restriction,
adverse environmental consequences could result.
A State commenter was concerned that the advance NSR
provisions would preclude the State's ability to decide that a
separate construction permit is still necessary, i.e., to allow
for preconstruction review of the proposed project. The
commenter drew a distinction between: (1) preauthorizing in the
part 70 permit certain minor NSR changes by including permit
conditions that ensure that the preauthorized changes meet minor
NSR, and (2) anticipating in a part 70 permit the terms that
would result from a separate minor NSR process. In this latter
case, the State still completes a separate minor NSR case-by-case
approval, but the part 70 permit does not need a revision because
it anticipated and already contains the operating terms and
conditions that result from the minor NSR process. The commenter
was concerned that if EPA intends to require States to provide
advance approval in the first situation, the State could lose its
ability to conduct preconstruction review. In addition, two
industry commenters were concerned about possible confusion
between advance NSR and plantwide applicability limits (PALs).
3. Discussion of Advance NSR
The EPA disagrees with the comment that advance NSR should
be allowed only for specifically identified new units, or that
adverse environmental consequences could result unless advance
approval is limited to such units. The EPA notes that any
advance approval must still meet all applicable requirements,
including the NAAQS-protective requirements of the SIP and any
control technology requirements (e.g., "minor source (best
available control technology (BACT)") including case-by-case
requirements where applicable. However, EPA believes that
advance approvals that meet applicable requirements can apply not
only to specifically identified new units, but can also apply to
new units identified as part of a class (e.g., storage tanks
meeting certain criteria) to the extent that applicable air
pollution rules are written so as to regulate such units as a
class. For example, the Federal new source performance standards
(NSPS), national emission standards for hazardous air pollutants
(NESHAP), maximum achievable control technology (MACT) standards,
and most SIP limits apply to certain source categories (though
parts of some of these standards, such as monitoring, are source
specific and determined on a case-by-case basis). By the same
token, NSR requirements may allow NSR permit terms to apply
categorically, such that each time a unit in the category is
added, the relevant NSR requirements would apply to that unit in
a predictable way that could be built in to the permit in
advance.
The EPA notes that, if the change triggers a new applicable
requirement other than NSR, (e.g., NSPS), that requirement would
also need to be included in the permit, which would require a
permit revision. However, as discussed below, an advance
approval may also be written to cover applicable requirements
other than NSR. Finally, the Agency emphasizes that the
permitting authority may establish additional permit terms as
needed to ensure that changes under an advance approval comply
with the Act and the SIP (e.g., a NAAQS-protective cap, or a
requirement to screen for ambient impact violations). Such an
approach is demonstrated by the Intel permit in Oregon.
The EPA also disagrees with the comment that advance NSR
would preclude a State's ability to require a construction permit
or to allow for preconstruction review. As an initial matter
States are not required to provide for advance NSR in SIP's or
part 70 programs. Moreover, as this is not a program
requirement, any State establishing such a program would have
flexibility in deciding what types of changes required
preconstruction review and a preconstruction permit.
In the first situation mentioned by this commenter, where a
source can avoid review at the time of the change because the
part 70 permit allows changes which are preauthorized, EPA does
not see this as a problem since this is one of the objectives of
advance NSR. The State has not lost its ability to conduct
preconstruction review. Rather, it has conducted preconstruction
review in advance, and has included the resulting terms in the
part 70 permit in advance of the change.
In the State commenter's second situation, where the part 70
permit anticipates the terms that would result from an NSR
process and the part 70 permit need not be revised, EPA notes
that the source must still await an affirmative approval under
the State's NSR program before it can construct or modify the
unit. Thus, this is not strictly advance approval. Although it
avoids the need for a part 70 permit revision, the source must
still await case-by-case NSR authorization, which will likely
generate new permit terms. If the State rules require such case-by-case approval, then an advance approval would likely not be
workable, and the State need not provide it. If the case-by-case
review under NSR creates new terms or conditions, these would
need to be incorporated into the part 70 permit through a part 70
permit revision and would thus not be an advance approval. The
State has the ability to decide whether a construction permit is
necessary. However, if the State determines that the advance
approval can render a construction permit unnecessary for some
changes by fully anticipating the minor NSR terms in the part 70
permit, EPA sees little benefit to withholding advance approval
of such changes.
To further address the State commenter's concern that the
proposal could be read to override a State's ability to require
preconstruction approval, EPA notes that a State's ability to
grant advance NSR approval is limited by the requirements of the
Act and the applicable SIP. Beyond that, it is properly an NSR
issue to be decided by the State. Whether to allow for advance
approval of minor NSR requirements in the first instance is a
decision within the State's discretion under its minor NSR
program, and what sort of conditions to place on specific permits
containing advance approval provisions is also within the State's
discretion. As discussed below, alternative operating scenarios
(including advance approvals) under 70.6(a)(9) are subject to
approval by the permitting authority. Consequently, part 70 does
not require any permitting authority to approve an alternative
scenario proposed by a source, if in the judgment of the
permitting authority, the scenario: (1) does not comply with
applicable requirements, including those of the NSR program; (2)
is not enforceable as a practical matter; or (3) is not
reasonably anticipated.
Furthermore, nothing in today's rulemaking requires a State
to revise its NSR program to provide for advance approval.
Although EPA believes the advance approval concept has many
benefits, as demonstrated in permits issued by States that have
already provided for it, the Agency acknowledges that the
availability of advance NSR under any particular NSR program is
best determined by the permitting authority. The EPA defers to
States to determine whether their NSR programs allow for advance
approval of certain projects and what conditions and restrictions
apply (e.g., pollutants covered, duration of advance approval,
types of changes eligible, etc.). Where the State NSR program
provides for such an approach, today's part 70 revisions provide
for that approach to be implemented through part 70's alternative
operating scenario provisions.
As for comments about confusion between advance NSR and
PALs, EPA today is providing further clarification of the meaning
of the two terms. The EPA notes that these are two tools used in
designing flexible permits, but differ in their basic purpose and
structure. In an advance NSR approval, the State forecasts the
NSR or other applicable requirements that would apply to a
particular project (or class of projects), and then develops
part 70 permit terms to comply with NSR and other applicable
requirements. In contrast, a PAL is a limit taken to avoid
triggering NSR, specifically major NSR, once the PAL is
established. Compliance with the PAL avoids triggering major
NSR; it does not conduct the NSR in advance. As a result, a PAL
by itself would not avoid the need to obtain a minor NSR permit
if a change is made that is subject to minor NSR, nor would it
avoid the need to revise a part 70 permit to add additional
applicable requirements (e.g., NSPS). To avoid minor NSR and
part 70 permit revisions, a source would need to use a PAL in
combination with advance NSR approval and other advance approvals
as appropriate to meet the source's flexibility needs.
The EPA also wishes to further clarify the definition of
advance NSR as it pertains to major NSR under parts C and D of
the Act. The proposed definition of advance NSR appeared to
treat major and minor NSR equally regarding the availability of
advance approvals. The basic part 70 requirement states that if
an advance approval can be structured to meet applicable
requirements in advance, it should be eligible for incorporation
into a part 70 permit as an alternative operating scenario.
However, while the Agency has significant experience with
structuring advance minor NSR approvals that meet all applicable
minor NSR requirements, the Agency has no experience with such an
approach for major NSR. Furthermore, the Agency believes that
many of the requirements of the major NSR program (e.g.,
contemporaneous BACT or lowest achievable emissions rate (LAER)
determination, air quality analysis, etc.) are project-specific
and time-sensitive, and are thus not consistent with the concept
of advance approval. Therefore, EPA believes that advance
approval for projects subject to major NSR is unworkable. (Note:
EPA is considering regulatory language to reflect this policy in
the final part 70 revisions.)
Finally, while the 1994 and 1995 proposals focus on advance
NSR approvals, the Agency believes that States may provide
advance approval for other applicable requirements. While NSR
programs typically require minor NSR permits to include terms and
conditions to assure compliance with all applicable Federal and
State requirements, a part 70 permit that provides advance
approval of just the NSR-driven requirements would fail to
accommodate in advance other applicable requirements, such as
NSPS or SIP requirements. Similarly a change could be made that
is exempt from minor NSR, but still triggers some other
applicable requirement. There are two options for addressing
such situations under today's revisions: (1) the permit could be
revised to incorporate the non-NSR applicable requirements (many
of which could be eligible for streamlined incorporation through
the notice-only revision process described in section VIII.C.3.
of this preamble); or (2) an advance approval could be developed
for the non-NSR applicable requirements. Determining permit
terms for these applicable requirements is often straightforward
and can, for many types of applicable requirements, be done in
advance. As a result, EPA expects that advance approval should
be available for some non-NSR applicable requirements.
Therefore, EPA is changing the proposed term "Advance NSR" to
"Advance Approval" and is revising this definition to accommodate
other applicable requirements.
B. Alternative Operating Scenarios
The EPA proposed in August 1995 to clarify the use of
alternative operating scenarios by adding to 70.2 a definition
of the term "alternative operating scenarios." Although
alternative operating scenarios were allowed under 70.6, the
original part 70 did not explicitly define this term. The
proposed definition stated that alternative operating scenarios
are part 70 permit terms that assure compliance with different
modes of source operation for which different applicable
requirements apply and for which the source is designed to
accommodate. Commenters generally supported adding this
definition. However, several industry commenters were concerned
about two aspects of the proposed definition. First, four
industry commenters objected to the inclusion of the phrase
"designed to accommodate." They argued that this term is not
defined in part 70 and could be interpreted in a way that overly
restricts the availability of alternative operating scenarios.
Two of these commenters also argued that if alternative operating
scenarios were limited only to those changes which the source is
currently designed to accommodate, advance approval of future new
units and modifications would not be allowed as alternative
scenarios since the units a facility is designed to accommodate
include only those units currently installed, not new units or
modifications not considered in the design.
The EPA agrees that the usage of the phrase "designed to
accommodate," absent a definition of the term, is unclear. More
importantly, EPA believes that the phrase restricts the
availability of advance approvals as a subset of alternative
operating scenarios, since it could be read to exclude advance
approval of new units or modifications not considered in the
facility's original design. The EPA originally felt that
inclusion of the "designed to accommodate" phrase would properly
restrict alternative operating scenarios to those changes which
did not require case-by-case review and approval by permitting
authorities, since approval of the original project would have
also approved any change which could be accommodated within that
project's design, without the need for addition approval by the
permitting authority. However, after further consideration of
the proper scope of advance approvals discussed above, EPA
believes that certain changes which the source is not designed to
accommodate may still be approved in advance by the permitting
authority and authorized as alternative operating scenarios. The
Agency believes that new units or modifications should be
eligible for advance approval as alternative operating scenarios
where the State NSR program allows it and where the permitting
authority approves the alternative scenario(s) as such. For
these reasons, EPA is deleting the phrase "designed to
accommodate" from the definition of alternative operating
scenarios and adding language clarifying that alternative
scenarios may include advance approvals.
Commenters were also concerned about the phrase "for which a
different applicable requirement applies," on the grounds that,
if alternative operating scenarios were limited only to those for
which a "different" applicable requirement applies, some changes
that should be allowed would be excluded. Examples include a
change from a scenario with an applicable requirement to a
scenario where that requirement is not applicable, or a change
under an advance approval where all the current requirements
still apply, but a new one applies as well. To address the
concerns with this phrase, EPA is making a minor change to
clarify that the purpose of an alternative operating scenario is
to allow reasonably anticipated changes at a source which change
the set of applicable requirements at a source. Such changes
could include the following: (1) scenario B adds a requirement
to the requirements under scenario A, while the requirements
under A remain applicable; (2) scenario B removes a requirement
from the requirements under scenario A; or (3) scenario B
replaces one or more of the requirements of scenario A. To
reflect this purpose, EPA is changing the definition to read
"terms or conditions in a part 70 permit which assure that
different modes of operation comply with the applicable
requirements relevant to each mode of operation."
C. Eligible Indian Tribe
This topic is discussed in section XI. of this preamble.
D. Emissions Cap Permit
In August 1995, to promote greater certainty in implementing
caps under section 502(b)(10), EPA proposed to include a
definition of the term "emissions cap permit." This term would
be used in the proposed 70.4(b)(3)(xiv), which, together with
70.4(b)(12)(i), would define part 70 program requirements for
the issuance of permits containing emissions caps. A number of
commenters expressed confusion about the proposed definition of
emissions cap permit. Specifically, commenters were confused
about whether this term could be used interchangeably with the
term "PAL" and, if not, what the distinction between these terms
would be. Commenters were also confused about the link between
this definition and the requirement in 70.4(b)(12) for States
to issue permits that allow trading under emissions caps. Two
additional industry commenters felt that the proposed definition
was unclear and could unnecessarily limit the types of caps that
could be constructed by prohibiting multiple caps within a single
facility.
After considering the comments, and after evaluating other
actions that EPA is taking today regarding emissions cap
provisions, EPA has decided not to promulgate a definition of
emissions cap permit. For reasons discussed in section V.A. of
this preamble, EPA has decided not to promulgate the proposed
70.4(b)(3)(xiv), which would have required that States
demonstrate the authority to issue emissions cap permits and
permits containing advance NSR. Because this proposed provision
was the only provision that would have referenced the term
emissions cap permit, the definition is no longer necessary.
Therefore, primarily because the definition is not needed, and
also in light of the confusion surrounding its use, EPA believes
that it would be most appropriate to leave this term out of the
part 70 regulations. In lieu of a regulatory definition, EPA
intends to clarify the types and uses of emissions caps elsewhere
in today's preamble, and in future policies and/or guidance
documents promoting the design of flexible permits.
E. Indian Tribe
This topic is discussed in section XI. of this preamble.
F. Major Source
1. Support Facilities
a. Summary of Proposal on Support Facilities
The EPA proposed in August 1994 to clarify the definition of
major source (for the portion of the part 70 definition
addressing major source under parts C and D of title I of the
Act, i.e., the major NSR provisions) with respect to when to
include the emissions of support facilities when determining if a
source is major. The part C and D major source definition
provides that when facilities are contiguous or adjacent, are
under common control, and are classified in the same 2-digit SIC
group, they are aggregated as part of the same major source.
Furthermore, consistent with the original part 70 proposal
preamble, with longstanding NSR policy, and with the NSR
regulations promulgated on August 7, 1980 (45 FR 52695), and
further clarified on November 28, 1989 (54 FR 48870), facilities
may be aggregated, even if they have different SIC codes, if they
are "support facilities" that are integrally related with the
primary activity at the site.
The EPA proposed to add regulatory language to the part 70
definition of major source codifying for title V purposes EPA's
longstanding interpretations regarding this subject.
Specifically, the August 1994 proposal would amend the part 70
definition of major source to make clear that any stationary
source that supports another source must be considered a support
facility and part of the same source regardless of the 2-digit
SIC code for that support facility. Furthermore, the proposal
stated that a facility would be considered a support facility if
greater than 50 percent of its output is dedicated to the
activity it supports.
b. Summary of Comments on Support Facility
Several industry commenters expressed opposition to
including the support facility concept in part 70 major source
determinations, arguing that this action would be contrary to
Congressional intent, inappropriately link dissimilar sources,
and add sources to the part 70 program. These commenters
suggested that the language and legislative history of the major
source definition in section 501(2) of the Act prohibit EPA from
aggregating a support facility with a primary source that has a
different SIC code as part of the same major source. They argued
that EPA should define major source solely according to what
would be aggregated under a single two-digit SIC code.
Several industry commenters also argued that the proposed
regulatory language would cause confusion and would be difficult
to implement. In particular, several industry commenters
expressed confusion about the requirement that a facility be
considered a support facility if 50 percent of its output is
dedicated to the facility which it supports. They argued that
terms like "support," "output," and "dedicated" are not defined
and are difficult to implement. One commenter also argued that
the level of support at some sources typically varies from year
to year, making the 50 percent test difficult to implement.
Three State and local agency commenters also commented on
the proposed regulatory language for support facilities. They
generally supported the clarification of the definition of major
source offered by the proposal, noting that the proposed
definition is consistent with longstanding NSR policy, as stated
in the August 7, 1980 rulemaking. However, one local agency
commenter noted that the definition should not unnecessarily
restrict the authority of permitting authorities to make major
source determinations given that permitting authorities have the
most direct knowledge of source operations.
c. Discussion of Support Facility
The EPA believes that portion of the part 70 major source
definition dealing with the term as defined in title I and
section 302 of the Act should not be based on a strict SIC test
that disregards support relationships. The Agency disagrees with
commenters who suggested that the language and legislative
history of the major source definition in section 501(2) prohibit
EPA from including a support facility with a different SIC code
as part of a major source. Rather, EPA believes that the
approach used in NSR in defining major source, an approach which
utilizes the SIC code as the central organizing principle for
determining the scope of a stationary source but also includes
use of the support facility test, is appropriate for purposes of
Title V.
It is important to recognize that the pertinent language of
the statute is silent on the topic of how, if at all, SIC codes
should be used for collocation purposes. Indeed, section 501(2)
takes a broad approach to the types of collocated sources that
may be aggregated for purposes of title V major source
determinations. This language clearly can support a variety of
approaches to aggregating sources according to industrial
groupings. If any direction can be taken from the statute
itself, it is simply that Congress intended to broadly include
collocated sources in major source determinations, a purpose that
is quite consistent with a support facility test.
In explaining its proposed decision to adopt the support
facility test in the preamble to the proposed original part 70
promulgation [56 FR 21724, May 10, 1991], EPA noted that the
House Report's explanation of identical collocation language in
section 182(c) of the Act (regarding serious ozone nonattainment
areas) sheds light on how the title V definition of major source
should be interpreted. The portion of the House Report cited by
EPA provides:
The definition of "major source" here and elsewhere in the
bill uses the term "group of sources located within a
contiguous area and under common control." The Committee
understands this to mean a group of sources with a common
industrial grouping, i.e., the same two-digit SIC code. It
is the approach followed today by EPA as a result of the
Alabama Power litigation. It avoids the possibility that
dissimilar sources, like a power plant and an adjacent coal
mine, will be considered as the same "source" because of
common ownership. (56 FR 21724 (May 10, 1991) (citing House
Report at 236-37).
The EPA concluded that "[t]he legislative history reference
to Alabama Power and EPA's current approach[] suggest that
aggregation by SIC code should be done in a manner consistent
with established NSR procedures" (id.). As noted, these
established NSR procedures generally rely on SIC codes but also
provide for grouping of support facilities with the facility they
support, even where the support facilities and the primary
activity have different SIC codes.
Application of the support facility test is consistent with
the broad approach to collocation issues described by
section 501(2). Nothing in the statute precludes the Agency from
adopting a common-sense industrial grouping approach for title V
as it has for NSR. Similarly, nothing precludes the Agency from
grouping facilities with different two-digit SIC codes (in
circumstances such as those in which the support facility test is
applied) where a failure to group such facilities would
artificially divide into separate "sources" facilities that
comprise a single entity relative to economic, functional, and
air-quality perspectives.
While certain commenters argued that the House Report
language cited above rejects the support facility test, EPA
believes that the language read in context indicates that this
statement from the House Report was directed not against the
support facility test, but in support of EPA's general
application of the SIC code rule. In fact, the example in the
legislative history of the power plant and coal mine appear
anomalous in light of the passage's general support for EPA's
approach to aggregation of sources. While EPA's collocation
rules generally do not provide for the aggregation of emissions
from sources with different SIC codes, EPA's historic approach to
collocation under the NSR and Prevention of Significant
Deterioration (PSD) programs has been that a strip mine and an
adjacent power plant controlled by the same entity should be
treated as a single stationary source. Indeed, EPA made this
precise finding in a 1989 rulemaking, a finding which industry
failed to challenge.
The EPA has thus concluded that application of the
established NSR approach, including its collocation provisions,
is generally quite consistent with the legislative history cited
by commenters. The EPA submits that an aggregation policy that
addresses support facilities is consistent with the broad
approach taken by Congress in the language of the statute and in
the legislative history, both of which demonstrate a clear
intention that EPA follow its existing policies. To the extent
that the House Report reference to a collocated strip mine and
power plant could be read as contrary to EPA position in today's
part 70 revisions, EPA does not regard the isolated comment as
sufficiently clear and convincing under general rules of
construction to overcome the statutory language and structure and
the Agency's consistent and longstanding position.
The EPA also does not agree that codifying the support
facility language would add sources to the part 70 program that
were not intended by Congress to be included. Because the
support facility language is consistent with longstanding NSR
policy and practice, it would bring sources into part 70 that
would already be classified as major under NSR. (though some of
these sources may not needed a major NSR permit because they were
built before States adopted their NSR rules, and were thus
"grandfathered"). This is consistent with section 501 of the
Act, which states that a major source for title V purposes
includes any source that is a "major stationary source" as
defined in section 302 or part D of title I. Furthermore, it
ensures that implementation of title V and of the NSR program are
consistent. The EPA finds no reason to group sources under
part 70 differently from how they are grouped under NSR, nor have
any commenters presented convincing reasons why EPA should, in
part 70, depart from its longstanding position under NSR.
Although EPA is including the support facility test in the
part 70 major source definition, EPA acknowledges comments that
the proposed regulatory language may be confusing in certain
respects. Therefore, as explained below, EPA is making three
minor changes to the proposed regulatory language. These
changes, together with this preamble discussion, are intended to
clarify the application of the support facility approach. These
clarifications pertain to the use of the support facility test in
making major source determinations under NSR, and are also
intended to ensure that the use of the support facility test in
major source determinations for part 70 is consistent with use of
the support facility test in the NSR program.
First, EPA has concluded that it is not appropriate to
codify the proposed language which states that a stationary
source is considered a support facility if at least 50 percent of
its output is dedicated to the primary activity at the site.
While a 50 percent test for support is an appropriate presumption
that is consistent with EPA practice for NSR major source
determinations, EPA believes that support facility relationships
should always be established in light of the particular
circumstances of the sources being evaluated. The EPA is
concerned, as are some State commenters, that establishing a
rigid 50 percent test in part 70 would preclude permitting
authorities from using their own judgement as to the most
appropriate major source determination, and could in some cases
conflict with past NSR major source determinations by permitting
authorities. In addition, EPA agrees with comments that a rigid
50 percent cutoff fixed in regulations may be difficult to
implement in some cases (e.g., where the level of support
exceeds 50 percent in some years but not others.) Therefore, to
maintain consistency with past major source determinations, to
alleviate potential implementation difficulties, and to preserve
permitting authority discretion to make the most appropriate
judgments, EPA is not codifying the presumptive 50 percent test
for support in part 70. Instead, part 70, like NSR, gives the
permitting authority discretion to determine when a support
activity should be designated as a support facility (and thus
aggregated with the primary activity) in making major source
determinations under title I and section 302 of the Act,
consistent with EPA policies addressing such determinations.
While the Agency, as noted above, is deleting the proposed
regulatory 50 percent cutoff for determining support, EPA expects
permitting authorities to follow certain basic criteria in making
support facility determinations for part 70, just as they have
done for NSR. These basic criteria are: (1) the degree to which
the support activity supplies material inputs to the primary
activity (i.e., percent output), and (2) the degree to which the
support activity provides services to the primary activity (i.e.,
percent output). Where either of these is 50 percent or greater,
EPA generally expects permitting authorities to conclude that a
support facility exists, and expects these activities to be
aggregated with the primary activity (if the activities are
otherwise adjacent/contiguous and under common control.) In
addition, where a support activity provides materials or services
to two or more primary activities, permitting authorities
generally should aggregate the support activity with the primary
activity receiving the most support. Similarly, if 50 percent or
more of the output from the candidate support activity goes off-site, the support activity may be considered a separate
stationary source, not a support facility.
While the application of these basic criteria is
straightforward in most cases, permitting authorities also have
discretion to consider additional factors as necessary to make
support facility determinations. Support facility determinations
can depend upon a number of financial, functional, and
contractual or other legal factors, which include, but are not
limited to: (1) the degree to which the support activity
receives materials or services from the primary activity (which
may indicate a mutually beneficial arrangement between the
primary and secondary activities); (2) the degree to which the
primary activity exerts control over the support activity's
operations; (3) the nature of any contractual arrangements
between the facilities; and (4) the reasons for the presence of
the support activity on the same site as the primary activity
(e.g., whether the support facility would exist at that site in
the absence of the primary activity). Where such criteria
indicate a support relationship, permitting authorities may
conclude that a support activity contributing more or less than
50 percent of its output may be classified as a support facility
and aggregated with the facility it supports (provided the
support activity is also adjacent/contiguous and under common
control).
The second change to the proposed support facility language
pertains to the relationship between the support facility concept
and the two other factors which must be considered in making
major source determinations: (1) whether sources are "located on
one or more contiguous or adjacent properties," and (2) whether
they are "under common control of the same person (or persons
under common control)." Part 70 provides, in the second sentence
of the major source definition, that facilities need not be
aggregated unless they are adjacent or contiguous and are under
common control. The proposal would have also required that a
facility be adjacent or contiguous and under common control
before being classified as a support facility. The EPA believes
that this repetition of the adjacent/contiguous and common
control criteria is redundant and potentially confusing. While
it is true that support activities are not aggregated with their
primary activities unless both sets of activities are also
adjacent/contiguous and under common control, EPA believes that
the first sentence of the major source definition clearly
reflects this fact, and the additional language is unnecessary.
Finally, the Agency notes that the revised part 70
definition of major source now provides that a support facility
is a facility which "conveys, stores, or otherwise assists in the
production of the principal product." This language originally
appeared in the preamble to the August 7, 1980 PSD regulations
and EPA believes that this language is an appropriate
clarification to add to the part 70 regulatory language for
support facilities.
2. HAP Source Applicability Issues
The EPA also proposed to clarify the major source definition
with respect to two issues in determining part 70 applicability
for sources of HAPs. The first of these issues is whether a
group of sources which are contiguous and under common control
must consider the two-digit SIC codes of each facility in
determining whether the facilities must be aggregated for
purposes of determining if they are a major source for HAP
emissions. The second issue relates to whether fugitive
emissions of HAPs must be counted in making major source
determinations.
The EPA proposed, in August 1994, to revise part 70 to
conform with section 112(a) of the Act and the implementing
regulations in 40 CFR part 63 (see 63.2, definition of major
source.) The proposal would clarify that, in determining part 70
applicability for HAP sources, major source is defined as any
stationary source or group of stationary sources that emits or
has the potential to emit above a threshold level of HAP
emissions regardless of SIC code. This proposed clarification
was based on the need to make the part 70 major source definition
consistent with the part 63 major source definition, and reflects
the title V definition of major source in section 501 of the Act,
which includes all major sources under section 112.
A large number of commenters objected to the proposed
clarification on the grounds that the part 63 major source
definition contradicts longstanding source aggregation policy and
legislative history of the Act because it does not rely on SIC
code in making major source determinations. The EPA disagrees,
noting that the part 63 major source definition was upheld in
National Mining Association (NMA) vs. EPA, 59 F.3d 1351 (D.C.
Cir. 1995). The court, in denying a petition for review of
part 63 on this issue, held that EPA's section 112 definition of
major source, which does not consider source categories or two-digit SIC codes, was a reasonable interpretation of the statute.
In addition, a smaller number of commenters opposed the
proposed clarification on the grounds that there is no reason why
the part 63 and part 70 major source definitions should be
identical in their treatment of HAP sources. The EPA disagrees
with this argument as well. Although EPA agrees that this aspect
of the part 70 major source definition departs from longstanding
practice under NSR, it does so to track the separate treatment of
HAPs set forth by Congress in the 1990 Amendments.
Section 501(2) requires that the part 70 major source definition
include section 112 major sources, while section 112 aggregates
facilities for major source purposes based exclusively on
contiguity and common control (without regard to source category
or SIC code). Moreover, as noted in the August 1994 proposal
preamble, EPA believes that the implementation of section 112
will be enhanced by providing this clarification because it
ensures that all major sources as defined in part 63 must apply
for a part 70 permit. Therefore, EPA is promulgating this change
to 70.2 as proposed. However, as noted elsewhere in this
preamble, EPA is providing for separate treatment for R&D
activities in determining whether a source is major for part 70
purposes.
Regarding the second issue, fugitive emissions of HAPs, EPA
proposed in August 1994 to clarify that HAP fugitive emissions be
included in the determination of major sources of section 112
pollutants. The EPA explained in the proposal preamble that the
original part 70 required that HAP fugitive emissions must be
included, but the Agency also proposed clarifying regulatory
language on this point.
Several industry commenters argued that requiring inclusion
of fugitive emissions for a HAP source category would require an
affirmative determination by the Administrator under
section 302(j) of the Act that fugitives must be counted for that
source category. As explained in the August 1994 proposal
preamble, EPA believes that the section 302(j) rulemaking
requirement does not apply in the context of sources that are
major under section 112 because the section 112 major source
definition is distinct from the section 302(j) major stationary
source definition used for parts C and D of title I of the Act.
As with the HAP source aggregation issue, this issue was the
subject of litigation in the context of the part 63 regulations
implementing section 112. In NMA vs. EPA, the court held that
section 112(a)(1) can be read to expressly provide that all
emissions are to be counted in determining whether a source is
major. Noting that section 302(j) requires the Administrator's
determination "except as otherwise expressly provided in the Act"
the Court concluded that section 112(a)(1) satisfies this
exception clause, and therefore, fugitive emissions may be
counted for section 112 sources without a section 302(j)
rulemaking.
As noted above, for legal and policy reasons, EPA believes
that the part 70 definition of major source as it applies to HAP
sources should be consistent with the part 63 definition of major
source. Therefore, because the part 63 definition requires
consideration of fugitives, the part 70 definition will continue
to require this also. Furthermore, as proposed, clarifying
language for this provision is added to the definition of major
source in 70.2.
3. Listed Source Categories for Fugitive Emissions.
The EPA also proposed to change the major source definition
with respect to the list of source categories whose sources must
count fugitive emissions in making major source determinations
under section 302 of the Act. In the August 1994 notice, EPA
proposed to change paragraph (2)(xxvii) of the section 302-based
definition of major source, which refers to source categories
regulated under section 111 or 112 of the Act which are not
specifically listed in paragraphs (2)(i)-(xxvi). The original
part 70 regulations required any source regulated by a
section 111 or 112 standard to count fugitive emissions in making
major source determinations under section 302. Although no date
was given, the implicit date was the promulgation date, July 21,
1992. However, a petitioner challenged these regulations on
procedural grounds, asserting that EPA may not require sources in
these categories to count fugitive emissions when determining
major source applicability until the Administrator makes an
affirmative determination by rule under section 302(j). Since no
such determination has been made for source categories regulated
as of August 7, 1980, the August 1994 notice contained proposed
language requiring only sources in categories regulated before
August 7, 1980 to count fugitive emissions.
The August 1995 notice further refined this proposed
language to avoid the need to revise the date contained in
paragraph (2)(xxvii) of the part 70 major source definition each
time EPA makes an affirmative determination under section 302(j)
in the future. Rather than including a specific date, the
proposed language would require fugitives to be counted for
sources in any source category for which the Administrator has
made an affirmative determination under section 302(j) of the
Act. This change would not by itself require fugitives to be
counted for source categories regulated by section 111 or 112
standards after August 7, 1980. Rather, it would provide that if
and when a 302(j) determination occurs for such a category,
fugitive emissions would need to be counted in determining
part 70 major source status under paragraph (2) of the major
source definition.
Three commenters representing State and local permitting
authorities opposed the August 1994 proposal to insert the
August 7, 1980 date into the major source definition. They
argued that sources in the NSPS and NESHAP categories, including
those regulated after August 7, 1980, are the more significant
sources of air pollution and should be regulated under title V.
One commenter also noted that the original part 70 required
inclusion of source categories regulated since August 1980, and
to exclude these now could lead to serious shortfalls in part 70
fee revenue since States used the original part 70 in setting fee
levels. The commenters indicated that if EPA makes the proposed
change, the Agency should undertake 302(j) rulemakings for the
additional categories.
In the August 1995 notice, EPA did indicate that a proposed
rulemaking to revise NSR regulations implementing parts C and D
of title I of the Act would be published in the near future which
would solicit comment on amending the listed source categories
for which fugitive emissions must be counted when determining
whether a source is major. However, EPA's recently proposed
revisions to the NSR regulations (61 FR 38249), published on
July 23, 1996, did not include a proposal to amend the list of
source categories. The EPA does not believe that today's
rulemaking is now the appropriate place to conduct the necessary
302(j) rulemakings and has not yet proposed any such action.
However, the Agency is still considering how best to conduct
302(j) rulemakings. Where appropriate, EPA intends to propose
such rulemaking(s) as soon as practicable following today's
part 70 revisions. Until such time as these rulemakings are
conducted, EPA considers source categories regulated by section
111 or 112 standards after August 7, 1980 to be "unlisted source
categories," and sources in these categories would not be
required by EPA to count fugitive emissions in major source
determinations under section 302 of the Act.
The EPA is sensitive to the concern that this change to the
part 70 regulations could eventually result in a fee shortfall
for some State programs. The EPA recognizes that States may have
relied on the original part 70 language in determining fees. The
EPA responds by noting that States are free to adopt (or, in this
case, retain) part 70 programs with more stringent applicability
provisions than EPA, including provisions requiring the counting
of fugitives for source categories not listed by EPA. By today's
action, EPA does not intend to encourage States to de-list any
fugitive emissions source categories contained in their current
part 70 programs, especially in light of the Agency's intent to
undertake appropriate regulatory revisions to update the list.
In addition, EPA notes that in the absence of more stringent
minimum applicability provisions, States have the ability to
revise fee schedules as necessary to assure adequate revenue.
Commenters did not object to the approach proposed in August
1995 that would eliminate the language defining source categories
in paragraph (2)(xxvii) by a specific date, and that would
instead define them by whether they had been listed by the
Administrator in a 302(j) rulemaking. However, two industry
commenters suggested that a better approach would be to include
the list of categories defined by paragraph (2)(xxvii) directly
in part 70 and update it through each subsequent 302(j)
rulemaking. The EPA is considering the merits of this approach,
and will decide whether to list 302(j) source categories in the
preamble versus the regulations in the upcoming 302(j)
rulemaking(s).
The EPA also proposed in August 1995 regulatory language
that deletes from paragraph (2)(xxvii) the phrase "but only with
respect to pollutants regulated for that source category." This
phrase, contained in part 70 as promulgated in July 1992,
required the consideration of fugitive emissions for listed
section 111 and 112 source categories only for the pollutants
regulated by the relevant section 111 or 112 standard. Thus if,
for example, an NSPS regulates particulate matter, but not VOC,
emissions for a source category, a source in that category,
pursuant to the "but only..." phrase, would not have to consider
fugitive VOC emissions in making a section 302 major source
determination for VOC. The EPA proposed to delete this phrase
because it is inconsistent with longstanding NSR policy on this
issue and because the Agency did not follow the correct
procedural steps when incorporating this phrase into the original
part 70.
Five industry commenters opposed the deletion of the phrase
"but only with respect to pollutants regulated for that source
category" from the major source definition. They argued that
this deletion would be an inappropriate expansion of the sources
that must consider fugitive emissions when determining major
source status. Two commenters argued further that placing the
focus only on regulated air pollutants is appropriate. They felt
that the fact that EPA has not issued a section 111 or 112
standard governing a particular pollutant implies that such a
pollutant does not pose a significant threat to public health and
that its fugitive emissions should therefore not be counted in
major source determinations under section 302 of the Act. The
EPA also disagrees with the comment that the requirements of
sections 502(b)(5)(A) and 504(a) of the Act are met if the permit
contains all then-applicable requirements at issuance or renewal,
and the permitting authority has ample authority to ensure that
it does. The requirements of 502(b)(5)(A) cited by the commenter
require that the permitting authority have authority to issue
permits and assure compliance with "each applicable standard,
regulation or requirement," which broadly read, means that each
time a change is made to which an applicable requirement applies,
the permit must be revised to assure compliance with that
applicable requirement, unless the permit already provides for
compliance with that applicable requirement. In the Agency's
view, the best way to assure compliance with each applicable
standard, regulation, or requirement of the Act, as section
502(b)(5)(A) requires, is to require that the permit be revised
each time a change triggers an applicable requirement, except
where the permit already complies with the applicable requirement
by providing for advance approval of the change without a permit
revision.
The EPA does not now see a legal or policy basis to retain
the current regulatory language, which represents a significant
departure from longstanding policy and legal interpretation of a
section 302(j) rulemaking under NSR. For the purposes of the NSR
regulations (40 CFR parts 51 and 52) EPA has determined, pursuant
to 302(j), that all fugitive emissions from sources within any
listed source category should be counted in major source
determinations, without limiting the emissions counted to only
those pollutants regulated by a section 111 or 112 standard for a
particular source category. Furthermore, the Act itself contains
no language restricting consideration of fugitives solely to
pollutants regulated under section 111 or 112. Section 302(j) of
the Act requires consideration of fugitive emissions of any air
pollutant as determined by rule by the Administrator. Finally,
section 501 of the Act defines major source for title V purposes
to include "major stationary sources" as defined in section 302.
This provision suggests that the part 70 major source definition
should be consistent with, rather than depart from, EPA's
previous determinations of when fugitives are to be counted in
making section 302 major source determinations. Therefore, EPA
is revising this provision in part 70 to be consistent with
parallel language in parts 51 and 52.
Moreover, EPA sees no policy basis to treat fugitive
emissions differently for NSR and title V purposes under its
longstanding two-step interpretation of the section 302(j)
rulemaking requirement. As discussed in the August 1995 proposal
at 60 FR 45547, under that first step EPA would propose to list a
source category if emissions from that category have a potential
for significant air quality deterioration, and would make a final
listing unless commenters demonstrated that the social and
economic costs of regulation would be unreasonable in comparison
to the benefits. On this basis, EPA found for NSR purposes on
August 7, 1980 that all source categories regulated under section
111 or 112 as of that date met the test for final listing. The
EPA sees no reason why it should reach any different conclusion
for title V purposes as to sources listed under NSR. This is so
regardless of whether a given major source is actually regulated
under NSR as a result of construction or modification or is
simply operating unchanged in an NSR-listed source category. For
the latter group of sources, which are nonetheless subject to
applicable requirements (e.g., RACT or other SIP emission
limits), EPA does not expect that commenters would be able to
show that the costs of compliance with part 70 would outweigh the
benefits.
Finally, EPA notes that the larger question of applicability
of part 70 to sources which would be major under NSR but not
major under part 70 (for example, because fugitive emissions were
counted for NSR, but not for part 70) is answered independently
of the part 70 major source definition. Even if the "but
only..." language were retained, major NSR sources would still
have to obtain part 70 permits. As described in section III.D.2.
of this preamble, any source required to have a permit under
parts C and D of title I must obtain a part 70 permit, pursuant
to section 502(a) of the Act.
4. Unlisted Sources of Fugitive Emissions
In interpreting the application of the original part 70
definition of major source to unlisted sources of fugitive
emissions (i.e., sources not in the fugitive emissions categories
listed by the Administrator pursuant to section 302(j) and
discussed above), EPA adopted an interpretation consistent with
its approach under NSR. Thus, the Agency initially interpreted
its major source definition as requiring that adjacent, commonly
controlled ("collocated") sources must be combined under certain
circumstances for purposes of making major source determinations.
(See Section III.F.1. Summary of Proposal on Support Facilities).
Under this interpretation, the collocation provisions apply to
sources regardless of whether the source has been listed by rule
under section 302(j) of the Act. Further, EPA interpreted the
collocation rule as requiring fugitive emissions from unlisted
sources to be considered in major source applicability
determinations to the extent an unlisted source is collocated
with a listed source and the primary activity of the operation as
a whole falls within a listed source category.
The NMA and American Forest and Paper Association petitioned
for review of part 70 in part because of the Agency's
interpretation of these collocation provisions. The petitioners
asserted that the Agency's interpretation of its collocation
provisions would have the effect of subjecting unlisted sources
of fugitive emissions to the requirements of title V without
undertaking a section 302(j) rulemaking.
The proper interpretation of the rulemaking requirement in
section 302(j) was addressed by EPA in 1989 in the context of
determining whether surface coal mines should be added to the
section 302(j) list of sources. (54 FR 48870, November 28,
1989). In the final rule, EPA determined that the section 302(j)
rulemaking provision did not provide a basis for making an
exception to its collocation rules under the NSR program. Citing
Alabama Power, the Agency explained that while section 302(j)
requires EPA to conduct a rulemaking to include fugitive
emissions in applicable emissions threshold calculations, it is
irrelevant in defining the scope of the term "source" and in
applying substantive NSR requirements (id. at 48881). The EPA
recognized that its established collocation procedures could have
the effect of subjecting an unlisted source of fugitive emissions
to substantive NSR requirements, but found no reason "to depart
from its longstanding use of the SIC code and other aspects of
the definition of 'source'" (id.). In the NSR context, EPA
clearly considered and rejected the position that a section
302(j) rulemaking was a necessary predicate to application of
collocation procedures.
As noted above, EPA has found no convincing reason to depart
from its longstanding approach under NSR in defining major source
for purposes of title V. The EPA accordingly affirms is original
interpretation of the collocation procedures as applied to
unlisted sources of fugitive emissions.
The EPA's consideration of the title V collocation
provisions is explained in detail in a June 2, 1995 guidance
document entitled, "EPA Reconsideration of Application of
Collocation Rules to Unlisted Sources of Fugitive Emissions for
Purposes of Title V Permitting." The EPA would like to clarify
that unlisted sources of fugitive emissions which become subject
to part 70 as a result of this final rulemaking will have 12
months from the effective date of this rule to file a part 70
permit application. As always, however, once sources become
subject to part 70 permitting requirements, permitting
authorities can request that applications be submitted prior to
the 12-month deadline.
5. Research and Development Facilities
In August 1995, EPA proposed to allow States to separate R&D
activities from other sources at the same site (i.e.,
"collocated" sources) when determining whether the collocated
source is a major source for part 70 permitting purposes. This
separate treatment applied only to R&D activities located with
other sources, such as manufacturing facilities, rather than at
"stand-alone" R&D activities. (Stand-alone R&D activities are
sources where the primary activity is R&D and other sources at
the site exist solely to support the R&D activity.) The proposal
required such separately treated R&D activities to obtain permits
if they would be a major source or a nonmajor source that is
otherwise required to obtain a part 70 permit. Since most
separately treated R&D activities would be nonmajor sources not
otherwise required to obtain part 70 permits, the practical
outcome of the proposal would have been to exempt most R&D
activities from part 70 permitting requirements. Today's
revisions to part 70 retain this separate major source treatment
for R&D activities.
The August 1995 proposal defined "R&D activities" to include
R&D and laboratory facilities conducting research and development
into new processes and products. Under the proposed definition,
an R&D activity could not manufacture products for sale or
exchange except in a de minimis manner. The proposal solicited
comment on whether the definition of R&D activity should include
pilot plants and laboratories not engaged in R&D and on whether
EPA should define de minimis within the R&D definition. In
addition, the proposal solicited comment on whether EPA should
allow States to treat stand-alone R&D activities separately from
their support facilities, such as boilers, during major source
determinations.
The revised part 70 retains separate treatment for R&D
activities but several revisions have been made to the
definitions of "major source" and "R&D activities." (These
changes are discussed in detail below.) This preamble also
explains that individual States have substantial flexibility to
implement these provisions and that today's revisions to part 70
allow them: (1) To define what constitutes de minimis within the
definition of research and development activities; (2) to
determine if pilot plants and R&D activities at educational
institutions can be treated separately; and (3) to develop and
implement State-specific procedures for calculating potential to
emit (PTE) for R&D activities. In addition, the revised part 70
does not allow non-R&D laboratories to be treated in the same way
as R&D activities, R&D activities to be exempt from PTE
calculation requirements, or support facilities of stand-alone
R&D facilities to be treated separately from the R&D activities.
(These issues are also discussed in detail below.)
Separate Treatment Under Section 302 and Part D of Title I.
The source aggregation procedures required in the proposed
definitions of major source for the purposes of section 302 and
Part D of title I of the Act (for criteria pollutants and other
non-HAP pollutants) were consistent with source aggregation
procedures used traditionally in the PSD and NSR programs (parts
51 and 52). The proposal discussed separate treatment for R&D
activities in the context of these traditional source aggregation
procedures. Traditionally, a stationary source located on
contiguous or adjacent property and under common control with
another source would be aggregated with the other source if both
sources are in the same 2-digit SIC code. If in different 2-digit SIC codes, the sources would still be aggregated if one
source is a support facility for the other source.
The EPA explained in the preamble for its August 1995
proposal that R&D activities could be treated as a separate
source for part 70 permitting purposes if the R&D activity is not
functionally integrated with the other collocated sources. The
preamble explained that separate treatment could occur for R&D
activities under traditional procedures for source grouping, but
that several changes to the regulations were necessary for
separate treatment to occur more frequently.
To group R&D activities separately, consistent with
longstanding NSR policy, EPA proposed changes to the part 70
definition of major source to allow States to treat R&D
activities as if they belong to a separate 2-digit SIC code.
This was necessary because the SIC code manual treats R&D
activities located with other sources, in some cases, as
belonging to the same 4-digit code and, in other cases, as
belonging to a separate 2-digit code. The EPA believes, however,
that typical R&D activities are not functionally integrated with
collocated industrial facilities, even when they could be
assigned the same 4-digit code.
In addition, consistent with longstanding NSR policy, EPA
stated in the preamble that it presumed R&D activities are not
normally support facilities for collocated industrial facilities.
As the preamble stated, R&D activities provide conceptual, rather
than material, support to collocated industrial activities. The
preamble explained that conceptual support provides ideas or
information that is potentially useful for a commercial
production process, while material support provides real products
or raw materials to a commercial industrial process. To limit
separate treatment for R&D activities that provide substantial
material support to other collocated industrial processes, EPA
stated that activities that resemble R&D but "contribute to the
product produced or services rendered by the collocated sources
in more than a de minimis manner" should be treated as support
facilities and considered part of the collocated source.
Most commenters supported EPA's proposal to allow separate
major source treatment for R&D activities located with other
sources, such as industrial facilities. Commenters agreed with
EPA that R&D activities do not normally support commercial
production in a material manner. The majority of commenters
stated that the policy reasons for allowing this type of
treatment are compelling: emissions of R&D activities are
unpredictable but low, emissions are difficult and costly to
estimate, and few applicable requirements typically apply.
In view of the support by commenters and of the Agency's
continuing conviction that R&D activities are unique in providing
conceptual support to other activities, the revised part 70
allows R&D activities to be treated separately from other types
of collocated sources. The EPA believes this position is
warranted for the reasons explained in the August 1995 proposal.
Separate Treatment Under Section 112. In its August 1995
notice, EPA proposed to let States consider R&D activities
separate from other collocated industrial sources during major
source determinations under section 112, provided the R&D
activities did "not contribute to the products produced or
service rendered by the collocated sources in more than a de
minimis manner." In the preamble, EPA justified separate
treatment for R&D activities for section 112 major source
purposes on the grounds that the statutory language of section
112(a)(1), which refers to "any stationary source or group or
stationary sources," leaves EPA discretion to separate out
discrete groups of stationary sources that are located together
only for administrative convenience, rather than because they
contribute to other activities at the site. Thus, the proposal
allowed separate treatment for R&D activities during section 112
major source determinations after an administrative convenience
test, rather than a support facility test.
Commenters generally supported the proposal, as they did for
purposes of section 302 and part D of title I. In addition,
commenters asked that EPA delete the de minimis language in the
section 112 major source definition, stating that it is redundant
with similar language in the definition of R&D activity.
In response to comments, EPA has retained its proposal to
allow separate major source treatment for nonmajor R&D activities
during major source determinations under section 112. The Agency
also agrees with commenters that the R&D activities definition
should contain all necessary restrictions on separate treatment.
Accordingly, EPA is deleting the language it used to impose the
administrative convenience test, for the purposes of section 112,
in proposed paragraph (1)(i)(B) of the major source definition
and, instead, has added equivalent language to the definition of
R&D activities.
Except for R&D activities, the final part 70 definition is
consistent with part 63 in that all HAP sources are grouped
together at a site. In its August 1995 proposal, EPA stated that
parallel revisions would also be made to part 63 to allow R&D
activities to be treated separately for MACT applicability
purposes. The Agency has reconsidered that statement. In light
of the decision in NMA vs. EPA, 59 F.3d 1351 (D.C. Cir. 1995),
the Agency now believes that revisions to part 63 would not
further the goals and objectives of the part 63 program. In NMA,
the court agreed that the Agency was not bound to a common
definition of major source in the title V and section 112
programs. At the time of that decision, part 70 required States
to group together sources in the same 2-digit SIC code if the
sources were adjacent or contiguous and under common control.
This requirement applied to all major source determinations under
part 70, including those for section 112 purposes. The part 63
general provisions, however, required the grouping of all sources
at a site, regardless of SIC code.
The petitioners in NMA argued that the major source
definitions for part 70 and part 63 should be identical with
respect to section 112. They also contended that the part 70
definition was the proper interpretation of the Act, and that
part 63 should be revised to track part 70. The Court rejected
those arguments and upheld EPA's position that for MACT standards
Congress intended the term "major source" to include entire plant
sites, without subdivision into SIC codes. The court also said
that the part 70 and part 63 major source definitions could be
different if EPA believed different definitions would further the
goals and objectives of each program.
The EPA believes that its policy allowing different
treatment for R&D activities in the part 70 and part 63 programs
is appropriate because it furthers the goals and objectives of
each program. The goal of section 112 is to impose strict
regulatory air pollution control requirements on major sources of
HAP to achieve the maximum degree of reduction in emissions that
EPA deems achievable. These control requirements, MACT
standards, as well as the major source definition used for these
purposes, are established by rulemaking under part 63. The
degree to which HAP emissions will be reduced depends, in part,
on the number of sources that will be major sources under
part 63. Therefore, disaggregating R&D activities from other
sources at a site for purposes of part 63 could conceivably
result in fewer major sources of HAP being subject to MACT
standards. Consequently, the Agency is reluctant to allow
separation of R&D activities from other sources when determining
whether a group of sources is a major source of HAP under
part 63. On the other hand, the objective of title V is to issue
permits that ensure compliance with existing air pollution
control requirements, such as MACT. The EPA believes subjecting
R&D activities to title V permitting would do little to ensure
compliance with control requirements because EPA is not aware of
any existing substantive control requirements, such as MACT
standards, that apply to R&D activities. Although all
rulemakings necessary to establish MACT standards have not been
completed at this time, several final rulemakings establishing
MACT standards for source categories that might have R&D
activities collocated with them have specifically exempted R&D
activities from the standard. In addition, making the source
aggregation procedures for R&D activities in the part 70 program
the same of all major source determinations, whether for the
purposes of section 112, section 302, or part D of title I,
ensures that R&D activities are grouped consistently under
part 70 regardless of the type of air pollutants being
considered.
Since EPA requires R&D activities that are major sources
under part 70 to obtain part 70 permits, EPA believes the revised
part 70 is consistent with the requirement of section 502(2)(a)
of the Act for all major sources to obtain operating permits.
However, because major source is now defined differently under
part 63 and part 70 for R&D activities, EPA acknowledges the
potential for States to be confused. The confusion arises from
the concern that a site with both R&D and manufacturing
activities could be major for HAP under part 63 solely when
emissions from the R&D activities are included, while the same
group of sources would not be major for HAP under part 70 when
the R&D emissions are not included. The effect of such a
situation would be that a source that is subject to a MACT
standard for major sources under part 63 would not be a major
source under part 70, and thus, not required to obtain a part 70
permit. For two reasons, EPA believes that the number of sites
where such a situation could occur will be limited. First, the
definitions of major source in part 63 and in part 70 with
respect to section 112 are different solely in how they group R&D
activities with other collocated sources. They group all other
sources, as well as stand-alone R&D activities, identically.
Second, the Agency is not aware of any sources that actually
would be major when counting HAP emissions from R&D activities
but nonmajor when HAP emissions from R&D activities are not
counted. The Agency believes that if such sites exist, any
detrimental effects on compliance assurance will be limited.
Part 70 permits are not the only tools available to assure
compliance with MACT standards. For example, under the Act, MACT
standards may impose compliance assurance requirements, such as
monitoring, recordkeeping, and reporting requirements, and these
requirements are enforceable by EPA and the States independent of
part 70 permits.
Definition of R&D Activity. The August 1995 proposed
definition covered two types of R&D activities: (1) testing
activities, and (2) research or laboratory facility activities.
"Testing activities" meant the testing of more efficient
production processes or methods for preventing or reducing
adverse environmental impacts, provided no products were produced
for sale or exchange. "Research or laboratory facility
activities" meant activities whose primary purpose was research
and development into new processes and products. The proposed
definition required those activities to be supervised by
technically trained personnel and not engaged in "the manufacture
of products for sale or exchange for commercial profit, except in
a de minimis manner." (Emphasis added). The "research or
laboratory facilities" part of the proposed definition paralleled
similar language in the definition of "research or laboratory
facility" of section 112(c)(7) of the Act.
Extensive comment was received on the proposed definition of
R&D activities. Commenters pointed out various contradictions or
inconsistencies. They also suggested adding activities to the
definition, and asked that the definition be simplified or
clarified in several areas. Two State agencies were concerned
that the definition could allow manufacturing facilities
minimally engaged in R&D to exempt some of their production from
major source determinations. Other commenters were concerned
that the proposed definition seemed not to apply to: (1) Testing
of new production processes and products or testing resulting in
de minimis production of products; and (2) R&D for improving
existing processes and products or for theoretical (basic)
research.
The EPA agrees with commenters who pointed out
inconsistencies between the testing and research or laboratory
facilities parts of the proposed definition. In response, EPA
has deleted the part of the definition referring to testing
activities. That part of the proposed definition would have
allowed testing activities not related to the primary purpose of
research and development, such as quality assurance or quality
control testing conducted during the normal course of
manufacturing, to be eligible for separate major source
treatment. Under the revised part 70, R&D activities must have
as their primary purpose either theoretical research or research
and development into new or improved processes and products.
This revision does not eliminate all testing activities from
eligibility for separate treatment, as testing conducted in the
course of research and development could potentially meet the
definition of R&D activities.
The Agency also agrees that the definition of R&D activities
should include theoretical research and research and development
on existing, as well as new, processes and products.
Consequently, EPA is adding theoretical research and research and
development to improve existing processes and products to the
definition.
In response to comments, the final definition of R&D
activities contains all language necessary to limit the
circumstances under which R&D activities may qualify for separate
major source treatment. The proposal imposed several limitations
on separate treatment for R&D activities within the definition of
major source: a support activity test, for section 302 and
part D major source purposes; and an administrative convenience
test, for section 112 major source purposes. In the proposal,
these limitations were found in different sections of the
definition of major source and were written with different
wording. Today's part 70 revisions impose these limitations by
using the same language in the definition of R&D activities.
This language requires that R&D activities not contribute to the
commercial production activities of collocated sources to more
than a de minimis extent. The EPA believes that placing all
eligibility limitations within the R&D activities definition will
clarify part 70 and ease its implementation. Also, using the
same language to impose the administrative convenience and
support facility tests results in consistent source aggregation,
whether HAP or criteria pollutants are being considered.
The final definition also retains the proposed requirement
that R&D activities, by themselves, not engage in commercial
production to more than a de minimis extent. Several commenters
pointed out that, regardless of whether an activity supports a
collocated source or not, commercial products may be manufactured
"incidentally" during research and development and that the final
definition should allow such production without limit. The EPA
believes, however, that incidental commercial production should
be limited and that an activity is no longer "primarily engaged
in R&D" if it produces more than de minimis levels of commercial
production.
The Definition of De Minimis. The proposal did not define
what level of commercial production was de minimis; however, EPA
solicited comment on whether it should define the term and, if
so, what criteria would be appropriate.
The majority of commenters asked that the final regulations
allow the States to define de minimis and that EPA remain silent.
Several commenters pointed out that States have experience in
making these determinations and that they are able to set common-sense criteria tailored to their own programs, taking into
account the mix of sources that exists in the State. In
addition, they pointed out that national criteria are likely to
disrupt State programs that already have established criteria.
Other commenters asked EPA to define de minimis to minimize
debate over its meaning.
The EPA agrees with comments suggesting that part 70 not
define de minimis. Rather, part 70 allows States to interpret
its meaning. The Agency believes this policy provides each State
the flexibility to interpret this term based on the circumstances
within that State.
However, each State should establish objective criteria to
determine de minimis commercial production thresholds for R&D
activities. The EPA believes criteria are needed to measure both
the amount of support an R&D activity provides to other
collocated sources and to measure the amount of commercial
production generated solely by the R&D activity. States may use
various criteria to achieve this purpose. For example, to
measure the amount of commercial production from the R&D activity
itself, the criteria may limit the percentage of time during
which an R&D activity performs manufacturing activities or set
dollar, volume, weight, or other values. To measure the level of
support provided to other collocated sources, the criteria may
include limits on the total percentage of products from a site
that are produced by the R&D activity. For example, such
percentages may be calculated based on dollar, volume, weight, or
other values.
R&D Activities at Educational Facilities. Several
commenters expressed concern that the proposal would not allow
disaggregation of R&D activities from collocated educational
institutions, such as universities. They believe that R&D
activities at universities are similar to R&D activities at
manufacturing plants in terms of predictability of operations,
and should be treated similarly.
In the August 1995 proposal, EPA did not discuss whether R&D
activities at educational institutions would meet the R&D
definition. In fact, the proposal presented several obstacles to
such an interpretation. For one, the proposed definition of R&D
activity covered research and development into new, but not
existing, processes and products. For another, the definition
did not cover theoretical research. Both of these activities
typically occur at university R&D facilities. In addition, the
proposed major source definition under paragraph (1)(i)(B), which
imposed an administrative convenience test for section 112
purposes, was interpreted by commenters as being an obstacle to
separate treatment for R&D at universities. The administrative
convenience test stated that R&D activities need not be
aggregated with other sources unless the R&D activities
"contribute to the product produced or services rendered by the
collocated sources in a more than de minimis manner." (Emphasis
added.) This language appeared to be an obstacle because
universities provide a service (education) to which R&D at
universities may be considered to contribute in more than a de
minimis manner. Thus, a literal reading of the proposed
definition would have excluded R&D at educational institutions.
In view of these comments, EPA has developed final revisions
to part 70 that it believes are amenable to an interpretation
that allows States to treat R&D activities separately from the
educational institutions at which they are located. The revised
definition includes activities that typically occur at university
R&D facilities, such as basic research, and research and
development of new or existing products and processes. Also, the
"services rendered" language of proposed paragraph (1)(i)(B) has
been revised and moved to the definition of R&D activity (for
reasons explained in previous sections). States may interpret
this revision to allow nonmajor R&D activities to be treated
separately from collocated educational institutions. At the same
time, EPA believes that the definition of R&D activities is broad
enough to allow States to group university R&D facilities
together with collocated educational institutions for major
source purposes under part 70.
Treatment of Pilot Plants. The August 1995 proposal stated
that "[p]ilot plants often present instances of activities that
are conducted on a trial basis, but which are nevertheless
dedicated to producing a product for commerce to more than a de
minimis extent, and so would not be considered R&D."
Pharmaceutical and chemical companies commenting on the
proposal asked that EPA reconsider this statement, pointing out
that some pilot plants would qualify under the proposed
definition of R&D activity. They also urged EPA to allow States
to determine whether pilot plants meet the definition.
The EPA has reconsidered the statement it made in the
proposal concerning pilot plants. The Agency agrees that States
should be allowed to decide if a particular pilot plant is an R&D
activity. Thus, under the revised part 70, a pilot plant may be
considered R&D if a State determines it meets the definition of
R&D activity. Each State may make this determination case-by-case. This clarification is appropriate because the term "pilot
plant" means different things to different industries and
different States. For example, some pilot plants, as integral
parts of large R&D facilities, test new products or production
processes during the development phase of research and
development. On the other hand, as commenters pointed out, in
some industries a pilot plant is a small-scale manufacturing
plant constructed for the purpose of producing the first goods
for a new or test market. As a general rule, the former example
could qualify because it is primarily engaged in R&D, while the
latter could not, because it is primarily engaged in
manufacturing. In the former example, the decision as to whether
the pilot plant is primarily engaged in R&D may depend on whether
it produces commercial products in more than a de minimis manner.
The facts of a particular case will typically govern the
decision.
Treatment of Non-R&D Laboratories. The proposal only
allowed laboratories that were part of an R&D activity, and
therefore "primarily engaged in research and development," to be
treated separately from other collocated sources during major
source determinations. The EPA solicited comment on whether the
definition of R&D activities should include laboratories not
engaged in R&D. In addition, the Agency asked for comment on
specific categories of laboratories that are not predictable in
operation and not functionally integrated with on-site industrial
activities.
Many industry commenters supported extending separate major
source treatment for all laboratories, although they acknowledged
that the operation of certain types of laboratories can be
predictable. These commenters also asked that States, rather
than EPA, be allowed to make case-by-case decisions as to which
non-R&D laboratories would receive separate treatment. State
commenters were split on this issue, with some supporting and
some opposing separate treatment for non-R&D laboratories. State
commenters opposing separate treatment argued that the activities
of industrial or commercial laboratories are often predictable.
Another State commenter suggested that a decision on this point
could not be made without more data on predictability, functional
integration, or environmental impacts for various types of
laboratories. The State commenter requested that EPA perform
further study before deciding whether to include sources other
than R&D activities. Other commenters requested separate
treatment for teaching laboratories and medical/health
laboratories not engaged in R&D. These commenters argued that
teaching and medical/health laboratories are not functionally
integrated with on-site industrial activities and are
unpredictable in operation and emissions.
Commenters did not provide enough evidence for EPA to
conclude that all or even certain types of non-R&D laboratories
are appropriate for separate treatment. For activities where R&D
is the primary activity, EPA can clearly say that laboratories
that support the R&D activity would be included under the R&D
definition. However, laboratories that support many non-R&D
activities, in EPA's view, tend to be functionally integrated
with those activities and more predictable than not in their
operations and emissions. Consequently, those non-R&D
laboratories should not be disaggregated from the activities that
they support. For example, several commenters asked that quality
assurance/quality control laboratories be treated the same way as
R&D activities. The EPA believes that such treatment would be
inappropriate, because these laboratories are often dedicated
components of a manufacturing source. As such, they should be
treated as part of that source.
The revised part 70 will also not allow separate treatment
for teaching laboratories at educational institutions. In the
Agency's view, these laboratories are engaged in the primary
activity of education, rather than research and development. As
a result, EPA believes they are functionally integrated with the
university and that their operations and emissions are
predictable. Thus, EPA believes they are dissimilar to R&D
activities, and should not be treated similarly.
The EPA also disagrees with comments that all analytical or
medical research laboratories should be included in the
definition of R&D activity. For the reasons stated previously,
where laboratories are functionally integrated with other
sources, EPA believes they should be part of those sources.
Conversely, where laboratories are primarily engaged in
theoretical research or R&D into new or existing processes or
products, and meet the other requirements of the final
definition, the laboratories could be considered R&D activities.
In response to commenters' concerns that laboratories should
be treated in a less rigorous way in part 70 permitting, EPA
notes that its guidance, the "White Paper for Streamlined
Development of Part 70 Permit Applications" (July 10, 1995),
summarizes how laboratories may be treated in a streamlined
manner in permit applications and permits. Although not
exempting laboratories from permitting altogether, this guidance
allows most laboratory activities to be treated as trivial or
insignificant activities. This means, for most laboratories,
that permit applications are not required to contain extensive
emissions inventories and permits may contain streamlined
compliance certification and monitoring requirements.
In summary, part 70 has not been revised to explicitly allow
disaggregation of non-R&D laboratories; however, States may
determine if any particular laboratories qualify for
disaggregation under the definition of R&D activities.
Calculation of Potential to Emit. The proposal asked for
comment on whether EPA should provide a de minimis exemption from
the requirement to calculate PTE for R&D activities, including
stand-alone R&D activities and R&D activities collocated with
other sources. Comment was also requested on cost-effective
means of calculating PTE for R&D activities. Comments by
industry representatives suggested that EPA exempt R&D activities
from PTE calculation altogether. They pointed out that, since
R&D operations and emissions are highly variable and
noncontinuous, calculation of PTE would be expensive and the
results highly speculative. Representatives of various types of
laboratories asked for a similar exemption. One commenter
representing an organization of State permitting agencies thought
such an exemption was inappropriate because it would make the
determination of whether an R&D activity is a major source an
impossible task, since there would be no basis for making the
determination. Several commenters asked that States, rather than
EPA, take the lead in developing simple procedures for
calculating PTE at R&D activities. Only one commenter offered an
example of how PTE could be calculated cost-effectively (although
no data on cost effectiveness was presented), suggesting that it
be based on an annual projected emission inventory.
The Agency is not persuaded by commenters that an exemption
to PTE calculations is appropriate. While calculation of PTE for
R&D activities may be difficult, it is still possible, and has
been successfully done in a number of cases. If EPA were to
create a national exemption from PTE calculation for R&D
activities, States would be unable to require PTE calculations
even where the calculations are possible and the States believe
the calculations are necessary. Therefore, EPA believes the best
policy is not to allow a de minimis exemption from calculating
PTE for R&D activities, while allowing State permitting
authorities the discretion to develop and implement State-specific, streamlined methods for determining PTE for R&D
activities.
Treatment of Stand-alone R&D Activities. The August 1995
proposal solicited comment on allowing stand-alone R&D activities
to be treated separately from their support facilities, when
those support facilities would independently be major sources.
Many commenters supported such a position. They argued this was
appropriate because: (1) support facilities are collocated with
R&D activities mainly for administrative convenience; and (2)
this additional flexibility would be a further refinement of the
overall goal of separating out R&D activities during major source
determinations. However, one State agency argued that this
policy would potentially erode the concept of a source as the sum
of its functionally-integrated parts.
The Agency agrees with the State commenter that the
integrity of a source must be preserved. To separate a source
from its support activities would undermine the traditional
concept of a source as the sum of its functionally-integrated
parts. The EPA believes that such support facilities are not
generally collocated with R&D activities merely for
administrative convenience, but rather for material necessity,
and that they are functionally integrated with the R&D
activities. The EPA does not agree that separation of support
facilities would be a further refinement of its policy for R&D
activities, since the policy for R&D activities is based on the
theory that R&D activities are not functionally integrated with
other collocated non-R&D sources and are located with these other
sources merely for administrative convenience. Consequently, the
revised part 70 does not allow the support facilities of stand-alone R&D activities to be treated separately from R&D activities
during major source determinations.
G. Permit Revision/Permit Modification
The EPA proposed in the August 1994 notice to change the
definition of "permit revision" and to remove the definition of
"permit modification" from part 70 to make the terminology
consistent with the revised permit revision procedures proposed
in the August 1994 notice. In the August 1995 notice, EPA again
proposed to revise the permit revision system, but did not
propose specific corresponding changes to the definitions of
permit revision or permit modification. Commenters suggested
that these terms be clarified.
The EPA has evaluated the two definitions in light of the
permit revision procedures being promulgated today. The EPA
believes that permit modification no longer has meaning distinct
from permit revision and is therefore deleting it from part 70.
The term "permit revision" is being further clarified to
encompass the changes to a permit that could be made under any of
the permit revision tracks set forth in 70.7. This includes
situations where a permit revision is required pursuant to
70.7(d)(1) as well as those which can be initiated by the
source or permitting authority pursuant to the administrative
permit amendment provisions of 70.7(e)(1).
The EPA expects that the majority of permit revisions will
be those which are required as a result of changes at a source.
The basic statement as to when permit revisions are required is
found in 70.7(d). It states that a change requires a permit
revision if it: (1) could not be operated without violating an
existing permit term; or (2) renders the source subject to an
applicable requirement to which the source has not been
previously subject. This requirement follows naturally from the
discussion of off-permit changes, contained in section V.D. of
this preamble, which states that, in the Agency's view the best
way to assure compliance with each applicable standard,
regulation, or requirement of the Act, as section 502(b)(5)(A)
requires, is to require that the permit be revised each time a
change triggers an applicable requirement.
Nonetheless, as originally noted in the 1994 proposal
(59 FR 44464), and clarified in 1995 (60 FR 45533), the
definition of permit revision should not be read so broadly as to
encompass all changes at a facility that have applicable
requirements governing them. In many cases, changes can be made
which, despite the fact that they involve emissions units subject
to applicable Act requirements, can be operated without a permit
revision. For example, generally applicable requirements (e.g.,
opacity limits) can be treated generally in part 70 permits such
that emissions units may be added or modified without triggering
either of the requirements in 70.7(d)(1). Similarly, as
discussed in section III.A. of this preamble, advance approvals
may be designed such that the change already complies with the
applicable requirement(s), and so does not trigger 70.7(d)(1).
H. Plantwide Applicability Limit
The EPA proposed in August 1995 to add to 70.2 a
definition of the term "plantwide applicability limit (PAL)."
This term was referenced within the definition of the term
"emissions cap permit," which noted that such a permit includes a
PAL and/or an advance NSR condition. The PAL definition
indicated that a PAL was a federally-enforceable limit
established to limit a source's PTE to a level at or below which
a particular requirement would not apply.
While commenters were generally supportive of the concept of
applicability limits, they raised a number of concerns about the
proposed definition of PAL. For example, two industry commenters
suggested that applicability limits in part 70 permits need not
always be plantwide; limits that only cover a portion of a plant
should be available as well. Two additional industry commenters
were unclear about the relationship between a PAL as defined in
part 70 and the PAL concept recently developed for use in the
major NSR program, and raised concerns that, if future NSR
regulations address PALs, there could be inconsistencies between
the NSR and part 70 approaches to PALs, including whether PALs
are mandatory program elements. In addition, a State commenter
was concerned about the use of the term "potential emissions" in
the PAL definition. The commenter noted that limitations on PTE
are intended to limit actual emissions, not merely to limit PTE
irrespective of what is actually emitted.
After considering these comments, and in light of two
additional factors, EPA has decided not to promulgate a
definition of the term PAL in today's regulatory changes. The
first additional factor EPA considered is the Agency's proposal
to significantly revise the PSD and NSR regulations in parts 51
and 52 (July 23, 1996, 61 FR 38249). Among other things, this
proposal would add a definition of the term PAL, and would
include provisions for the use of PALs to determine whether a
major modification has occurred at an existing NSR major source.
Although NSR permits containing major NSR PALs have been issued
under current EPA regulations, EPA proposed to clarify a number
of relevant issues regarding the establishment and adjustment of
PALs. To harmonize the implementation of NSR and operating
permit programs, and to minimize confusion, EPA believes that the
definition of the term PAL should be consistent in both programs.
Therefore, EPA believes it should defer to the definition of PAL
that will be promulgated in the final NSR reform regulations.
The analysis of comments on the proposed NSR regulations will
provide an appropriate forum for considering the full range of
issues related to PAL implementation, including issues raised by
some part 70 commenters such as: the voluntary versus mandatory
nature of PALs on the part of sources and States; the use of
"potential emissions" terminology; and the options for
applicability limits that do not cover the whole plant. Should a
definition of PAL be needed in part 70, EPA will codify a
definition consistent with that finalized in the NSR regulations
in that rulemaking.
A second factor that EPA considered in deciding not to
promulgate a definition of PAL is the Agency's decision not to
mandate emissions cap permits that include PALs and advance NSR
as a minimum element of State part 70 programs. As discussed in
section V.A. of this preamble, EPA is not finalizing proposed
70.4(b)(3)(xiv) requiring State authority to issue emissions
cap permits. In addition, requiring PALs for part 70 would be
inconsistent with the proposed NSR changes, which would maintain
the current NSR policy that PALs are optional on the part of
sources and States. The deletion of the cap requirement as
embodied in the proposed 70.4(b)(3)(xiv) renders a regulatory
definition of emissions cap permit unnecessary. Since the term
PAL was defined in the part 70 proposal for use in the definition
of emissions cap permit, it is likewise no longer necessary for
this purpose.
The EPA notes that its decision not to adopt a definition of
PAL today does not in any way limit the availability of PALs at
part 70 sources. Under current NSR rules and policy, PALs are
presently an option available to sources and States on a
voluntary basis, and several PALs have been developed under
existing NSR SIP's. Any PAL developed at a part 70 source could
be established in the source's part 70 permit, or could be
established as an NSR permit term, in which case it would be a
part 70 applicable requirement like any other NSR permit term.
The EPA also notes that its decision to use the term PAL that
mirrors the major source NSR program does not in any way restrict
the opportunities to use other types of caps to provide flexible
approaches to determining applicability or compliance for other
applicable requirements.
I. Potential to Emit
The EPA proposed in August 1994 to revise the definition of
"potential to emit" in response to petitioners' comments that
federally-enforceable potential to emit limits are enforceable
not only by the Administrator, as stated in the original part 70,
but also by citizens. However, in an unrelated development, in
Clean Air Implementation Project (CAIP) vs. EPA, (D.C. Cir.
June 28, 1996), the court vacated and remanded to the Agency the
part 70 definition of potential to emit in response to industry
challenges to the Federal enforceability requirement. The EPA,
in its memorandum, "Extension of January 25, 1995 Potential to
Emit Transition Policy (August 27, 1996)," stated that the term
"federally enforceable" in 70.2 should now be read to mean
"federally enforceable or legally and practicably enforceable by
a State or local air pollution control agency" pending completion
of new rulemaking on the federal enforceability issue.
A number of industry commenters addressed the issue of
whether EPA should require limits on potential to emit to be
federally enforceable, noting the inconsistency between the
court's ruling in CAIP vs. EPA and the proposed and current
part 70 definitions of potential to emit. As noted, the court
has now vacated this definition, relying on its earlier decision
in NMA vs. EPA regarding the definition of potential to emit
under section 112. In the NMA decision, the court framed the
issue as whether limits on potential to emit were "effective,"
and found that EPA had failed to justify the relationship between
the Federal enforceability requirement and effective limits on
potential to emit. The court did not have occasion to address
the "maximum capacity to emit" concept, EPA's longstanding
policies that limits on potential to emit must be both legally
and practically enforceable, or any other aspect of the
definition of potential to emit. Therefore, EPA is today
revising the definition in response to the court's vacatur, for
the purpose of reserving judgment on the Federal enforceability
requirement challenged by petitioners, pending a separate
rulemaking in which EPA would reconsider the definition of
potential to emit in part 70 and related rules, to address the
issue of Federal enforceability and the related issue of criteria
for effectiveness of limitations on potential to emit. To
accommodate EPA's reservation of judgment on the Federal
enforceability issue, the definition will be restructured
somewhat, but will not otherwise change substantively. Thus,
pending completion of a separate rulemaking, the definition of
potential to emit finalized in today's rulemaking still should be
read consistently with the August 27, 1996 memorandum noted above
to mean limitations "federally enforceable or legally and
practicably enforceable by a State or local air pollution control
agency."
Nonetheless, EPA wishes to clarify today that the decision
whether to require Federal enforceability is independent of the
issue of whether limits enforceable by the Administrator are also
enforceable by citizens under the Act. As noted, it is
clarification of this latter point that comprised the substance
of the August 1994 proposal. Commenters generally objected to
adding language that could restrict the types of limits that
could serve to limit potential to emit, and objected to revising
the definition of potential to emit while it was the subject of
litigation. However, they did not speak directly to the issue of
whether federally-enforceable limits are also enforceable by
citizens. Therefore, EPA today is proceeding to clarify, by way
of today's rulemaking and preamble, its position stated in the
August 1994 proposal that limits which are enforceable by the
Administrator are enforceable by citizens under section 304 of
the Act. This clarification is made without prejudice to any
upcoming rulemaking on Federal enforceability.
J. Regulated Air Pollutant
The August 1995 notice proposed a change to the definition
of "regulated air pollutant" to respond to concerns raised during
the development of EPA rules implementing accidental release
prevention requirements under section 112(r) of the Act
(40 CFR part 68). The proposed change would revise the
definition to delete a pollutant's listing pursuant to
section 112(r) as a criterion for that pollutant being considered
a regulated air pollutant. Although some 112(r) pollutants would
still be regulated pollutants for other reasons, a pollutant
would no longer be defined as a regulated air pollutant solely
because it is listed under 112(r). As noted in the August 1995
preamble, this action would benefit part 70 implementation by
removing from part 70 program requirements (e.g., the requirement
to describe emissions in permit applications) a number of
section 112(r) pollutants which are generally not subject to air
quality management programs.
Many commenters were generally supportive of EPA's proposal,
noting that requiring estimates of 112(r) emissions in
determining part 70 applicability would be unreasonably
burdensome. However, commenters did raise concerns about whether
the proposed language clearly reflects EPA's intent. They noted
that the proposed language still generally includes any
section 112 pollutant, and would be read to include 112(r)
pollutants unless some additional language is added to provide a
specific exemption for 112(r)-only pollutants. The EPA agrees
and has added language to more clearly reflect its intent. In
addition, one commenter noted that paragraph (3) of the
definition of "regulated pollutant (for presumptive fee
calculation)," which specifically exempts 112(r)-only pollutants
from regulated pollutants that must be considered in fee
calculations, is unnecessary if 112(r) pollutants are no longer
regulated air pollutants to begin with. The EPA agrees, and has
deleted paragraph (3) from that definition.
K. Research and Development Activities
See section III.F.5. of this preamble for a discussion of
the definition of research and development activities.
L. Section 502(b)(10) Changes
The EPA proposed, in August 1994, to delete provisions in
70.4(b)(12)(i) which allow the source to unilaterally make a
specific type of change, known as a "section 502(b)(10) change."
Under the original part 70, this type of change could contravene
an express permit term as long as the change would not violate
applicable requirements, and would not contravene federally-enforceable monitoring, recordkeeping, reporting, or compliance
requirements. Such changes could be made without a permit
revision if the change was not a title I modification and did not
exceed the emissions allowable under the permit. For reasons
explained in section V.C. of this preamble, EPA is deleting the
provisions in 70.4 allowing such changes. As a result, the
definition in section 70.2 is no longer necessary and is
deleted.
M. State Review Program
The August 1995 notice proposed a definition of "State
review program" for purposes of implementing the proposed system
for part 70 permit revisions. The proposed system divided
changes into two classes; those that were subject to State review
programs and those that were not. Commenters requested
clarification of this term in light of the August 1995 proposal.
However, the permit revision system being promulgated today
(discussed in section VIII.A. of this preamble) has been
restructured for clarity. The restructured part 70 no longer
relies on the term "State review program." Therefore, this term
is being deleted from part 70.
N. Title I Modification
The EPA proposed in August 1994 to include a definition of
the term "title I modification" in response to the confusion and
controversy surrounding its implementation. This term is used in
the original part 70 primarily in establishing what changes were
eligible for each of the three permit revision procedures. As
indicated in the original part 70, title I modifications were not
eligible for the minor permit modification or administrative
amendment procedures, and would thus be significant permit
revisions. This term is also used in the Act in section
502(b)(10) and was in the original part 70 to exclude title I
modifications from off-permit treatment, which allows certain
changes without a permit revision.
The 1994 proposal stated that EPA believed that title I
modifications included changes subject to State minor NSR
programs approved under section 110(a)(2) of the Act. The EPA
received a large number of comments from industry and States
strongly opposing this interpretation. The EPA considered these
comments in detail, and concluded that title I modification as it
appears in section 502(b)(10) and in the original part 70 should
be read to exclude changes subject to minor NSR. The rationale
for this proposal is described in detail in the August 1995
proposal notice.
Comments on the 1995 proposed interpretation of title I
modification were generally favorable. One environmental group
incorporated by reference its earlier comments on the August 1994
proposal which supported EPA's original interpretation that
title I modifications include minor NSR. However, this commenter
did not raise any new issues regarding the position EPA took in
its August 1995 proposal. Therefore, EPA stands by the proposal
and rationale as set forth in the August 1995 notice.
Furthermore, EPA notes that the revised permit revision
system being promulgated today greatly diminishes the importance
of the term title I modification. Whereas the term is used in
the original part 70 to govern which changes are eligible for
streamlined permit revision procedures, EPA notes that the
availability of today's new streamlined revision procedures do
not depend on whether the change is a title I modification.
Similarly, EPA is deleting the off-permit procedures, which had
relied upon the meaning of title I modification. The remaining
reference to the term in part 70 states that changes made
pursuant to section 502(b)(10) cannot be title I modifications.
Although the meaning of title I modification is now of greatly
reduced significance in part 70, EPA sees no reason not to
promulgate the definition as proposed in August 1995.
Noting that current part 70 does not contain a definition of
title I modification, EPA wishes to today reiterate its position
on the interpretation of this term for current part 70 programs
until such time as they are revised pursuant to today's
revisions. As Stated on November 7, 1995, EPA believes that the
interpretation of the current part 70 rule is consistent with
that in the August 1995 proposal, i.e., that title I
modifications do not include minor NSR changes.
IV. Changes to Section 70.3
A. Part C and D Sources
In the August 1994 notice, EPA proposed to add a new
paragraph to 70.3(a) to conform to section 502(a) of the Act,
which lists the types of sources required to obtain a part 70
permit. This list includes "any other source required to have a
permit under parts C and D of title I." Parts C and D of title I
constitute the major NSR permitting programs. Three State and
two industry commenters felt that the proposed change was
unnecessary because major sources are already subject to part 70
because of existing 70.3(a)(1). They felt that the additional
language could add confusion. In particular, they were concerned
that there is the possibility of confusing minor source NSR
(though not in parts C or D) with part C or D NSR such that large
numbers of those sources might unintentionally be brought into
the part 70 permitting program.
The EPA wishes to clarify that the proposed change was not
meant to refer to minor NSR sources, but only to sources that
parts C and D of title I would require to have a permit.
However, EPA notes that certain sources that might in some
respects be viewed as non-major are still sources "required to
have a permit under parts C or D of title I." The EPA is aware
of at least two ways that an NSR source which is not brought into
part 70 by the major source size cutoffs in 70.3(a)(1) could
still be subject to proposed 70.3(a)(4) 70 because it receives
a part C or D permit: (1) a source was subject to major source
NSR permitting when constructed or modified, but has since
reduced its emissions to non-major levels though it remains
subject to its NSR permit; or (2) a source is major for NSR but
otherwise viewed as nonmajor for part 70 under a part 70 policy
decision (e.g., the changed part 70 applicability criterion with
respect to considering only "PM-10," rather than "particulate
matter" in determining "major source" status). The proposed
change would apply to the minor sources described above, and may
apply to other circumstances of which the Agency is not yet
aware.
Considering the comments, EPA maintains that the proposed
change, with the above clarification, best implements
section 502(a) of the Act. The EPA believes that section 502(a)
offers no basis to exclude such sources from part 70. Moreover,
EPA believes that the proposed change will improve NSR and
part 70 implementation, and will make the interface between NSR
and part 70 more straightforward. Therefore 70.3(a)(4) is
being finalized as proposed.
B. Section 112(r) Applicability
The EPA proposed in August 1994 to provide that, where a
source would be classified as major solely because of its
emissions of 112(r)-only pollutants, that source would not be
subject to the stipulation that all major sources must obtain
part 70 permits. This provision is needed to conform to section
112(r)(7)(F) of the Act. All the commenters on this issue
supported EPA's proposal to add this provision. However, EPA
notes that the proposed language for 70.3(a)(1) could be read
to exempt sources that are major for any 112(r) pollutant, even
those regulated elsewhere in the Act (e.g., HAPs listed in
section 112(b)). The EPA intended for this exception to apply
only to those pollutants listed solely pursuant to 112(r).
Therefore, EPA is finalizing proposed language with the
clarification that this applicability exception applies to
112(r)-only permits. The EPA believes that this change, together
with the other 112(r) changes and clarifications in today's
part 70 revisions, clarify the 112(r)/part 70 interface with
respect to applicability, permit application, and permit content
requirements.
V. Changes to Section 70.4
A. Authority to Issue Emissions Cap Permits and Advance NSR
The EPA proposed in August 1995 to specifically require, as
a minimum program element, that a State demonstrate (through a
legal opinion) authority to issue permits containing emissions
caps and advance NSR conditions consistent with all applicable
requirements. Two provisions, 70.4(b)(3)(xiv) and
70.4(b)(12)(i), together describe the part 70 program
requirements that permitting authorities must meet with respect
to caps and advance NSR. Proposed 70.4(b)(12)(i), discussed in
detail in the next section of this preamble required that
permitting authorities provide caps, and also addressed the
permit content and procedural requirements for trading under
these caps. Proposed 70.4(b)(3)(xiv), on the other hand,
required the additional authority to issue emissions cap permits
which include advance NSR and/or PALs. Thus, 70.4(b)(12)(i)
required caps but also required the permit to assure compliance
with all applicable requirements, while the proposed
70.4(b)(3)(xiv) could be read to require permitting authorities
to employ caps either to assure compliance with or to avoid
triggering of applicable requirements.
Several industry commenters expressed general support for
mandatory caps and advance NSR. However, few commenters provided
specific comments on the language of the proposed
70.4(b)(3)(xiv), which embodied the specific mandate that
States demonstrate authority to issue emissions cap permits that
include PALs and/or advance NSR. Two industry commenters did
support making PALs mandatory because it would promote the use of
PALs.
One State agency representative was concerned that mandatory
caps would seriously impact State minor NSR programs, many of
which do not presently provide for PALs or advance NSR. This
commenter also was concerned that a cap might result in less
emissions reductions than would occur under current minor NSR
programs. The commenter urged that emissions caps be left as an
option to States. Another State commenter argued that trading
under emissions caps should only be mandated where the State has
a rule authorizing such an approach. An environmental group
representative also opposed mandatory caps, contending that the
cap concepts are relatively untried. The commenter suggested
that States be allowed to test caps to determine which situations
merit them, rather than have caps required by EPA. The commenter
also argued that developing cap permits is more resource-intensive, and a cap mandate from EPA could stretch State
resources. Several additional commenters were confused by the
cap provisions and were unclear, among other things, about what
sort of caps States were required to provide.
As noted below, EPA stands by its position in the original
part 70 regulations and restated in the preamble to the August
1994 proposal, that trading under emissions caps is an
appropriate, and even preferable, means of implementing section
502(b)(10) of the Act. After considering the comments, however,
EPA has decided that the proposed 70.4(b)(3)(xiv) is
inappropriate for two reasons. First, EPA is concerned that, as
proposed, this provision could have been read to require caps and
advance NSR even where the caps and advance NSR are inconsistent
with applicable requirements, including the procedural
requirements of the applicable SIP. Although there was some
confusion about exactly what this provision would have required,
EPA never intended it to require permitting authorities to issue
emissions cap permits that were inconsistent with applicable
requirements. However, some commenters apparently read the
proposal to supersede applicable requirements, or to require the
States to change them. The Agency believes that reading section
502(b)(10) in this manner would be inappropriate. In any event,
this was not EPA's intent, and the Agency wishes to clarify that
the permitting authority has considerable discretion to determine
whether its regulations allow provisions such as advance NSR or
PALs in any particular case. Second, consistent with this
position, EPA believes that the proposed language is now
redundant with other provisions in 70.4(b)(3), e.g.,
70.4(b)(3)(i) and 70.4(b)(3)(v). For these reasons, the
Agency is deleting the proposed provision.
The remaining components of EPA's approach to emissions cap
permits and section 502(b)(10) are discussed in the next section
of this preamble. Although EPA is not codifying the proposed
70.4(b)(3)(xiv), the Agency wishes to clarify here that it
still strongly supports the advance approval and PAL/cap concepts
embodied in the proposal for emissions cap permits, if they are
consistent with applicable requirements and State program needs.
The EPA agrees with the large number of commenters who stated
that cap and advance NSR approaches could improve operational
flexibility by reducing the number of NSR permits and part 70
permit revisions, which should save significant time and
resources for sources and permitting authorities. For this
reason, EPA encourages States to evaluate the present
availability of advance NSR, PALs, and other types of caps, to
consider ways to integrate these concepts into part 70 programs
and/or SIP's. The Agency is adhering to the principle, however,
that the States are best suited to determine whether caps or
advance NSR are appropriate in their situations and EPA accepts
that some States may choose not to provide these approaches or
may choose to provide flexibility through other means.
B. Trading Under Permitted Emissions Caps
In the preamble to the August 1994 proposal, EPA stated that
sources should be able to establish an emissions cap and to
comply with that cap through trading, as an appropriate means of
implementing section 502(b)(10) of the Act. Both the August 1994
and August 1995 notices proposed to modify the current part 70
requirements for trading under emissions caps to clarify the cap
provision in 70.4(b)(12) and address State and industry
concerns.
A number of commenters generally supported EPA's efforts to
promote the use of emissions caps and to provide for their
incorporation into part 70 permits. Several industry commenters
expressed general support for mandatory caps and one felt that
mandatory caps are clearly required by Statute. In contrast, a
number of State commenters urged EPA to clarify that applicable
requirements continue to apply under any cap established under
section 502(b)(10).
The EPA agrees with comments by State agencies that
emissions caps must still meet all applicable requirements, and
the Agency hereby clarifies that section 502(b)(10) does not
mandate broad emissions caps that would conflict with or
supersede applicable requirements. As stated in 70.4(b)(12),
the permitting authority must include terms and conditions in
each part 70 permit that assure compliance with all applicable
requirements. Thus, where the permitting authority determines
that a source's emissions cap proposal does not assure compliance
with all applicable requirements, the permitting authority must
include additional provisions as necessary to do so. For
example, were a source to propose a cap for the purpose of
allowing preapproval of minor NSR without case-by-case review,
but the permitting authority has determined that it cannot or
should not waive case-by-case review under its SIP, the
permitting authority would be obligated to disapprove the
proposed preapproval conditions. The 70.4(b)(12) requirement
should not be read to require the permitting authority to issue
such a cap proposal. While the permittee may always propose a
cap in the part 70 permit that it believes will meet applicable
requirements, the permitting authority has the final authority to
determine whether the cap meets that purpose and whether the
permit includes the necessary applicable requirements.
To avoid the situation where the cap proposed by the source
with the intent of satisfying an applicable requirement fails to
meet the expectations of the permitting authority, EPA encourages
sources to communicate early with permitting authorities when
developing emissions caps so that the source can clearly
understand State policies on the use of caps to meet applicable
requirements, and can develop applications for caps that meet the
source's needs while still assuring compliance with all
applicable requirements. In addition, even if caps and minor NSR
preapprovals are consistent with State program requirements, the
permitting authority must still assure that a proposed emissions
cap is enforceable as a practical matter, and must reject any cap
proposal that it determines is not practically enforceable.
Therefore, it is essential that sources and permitting
authorities communicate clearly regarding the enforceability of
caps as they are developed.
The EPA wishes to further clarify, in response to comments,
that caps by themselves do not necessarily avoid all permit
revisions, since changes under a cap may still trigger other
applicable requirements (e.g., a cap designed to avoid major NSR
will not necessarily protect a source from the need to comply
with minor NSR or section 112 requirements), which in turn will
trigger the need for a permit revision. Sources and permitting
authorities seeking to design flexible permits must consider the
source's particular set of applicable requirements, including
requirements that will apply to changes anticipated under the
cap, and assess which of several flexibility approaches (e.g.,
emissions caps, emissions averaging, applicability limits,
advance approvals, etc.) provide the most appropriate degree of
flexibility. Sources with complicated sets of applicable
requirements may find that several caps and/or advance approvals
addressing different emission unit-applicable requirement
combinations afford the source the greatest flexibility. For
example, the previously discussed permit for an Intel
semiconductor facility in Oregon includes, among other things, a
major NSR applicability limit (similar to a PAL), a combination
cap/preapproval for minor NSR, and a bubble-type limit for RACT
at certain emissions units.
In August 1995, EPA also proposed to allow a one-time
advance notification of a facility's anticipated changes under a
cap during the term of the permit to comply with the 7-day
notification requirement of section 502(b)(10). A number of
industry commenters supported this proposal. They contended that
a 7-day advance notification prior to each change under the cap
did little to increase the assurance that the source was
complying with the cap, but added significant reporting burdens,
which according to some commenters, would render the cap
unworkable, especially for companies that make many frequent
changes. While EPA is sympathetic to any burden imposed by the
notice, the Agency has determined that section 502(b)(10) cannot
be read to allow a waiver of the 7-day advance notification for
individual changes under a cap, and that providing for one-time
only notification would constitute such a waiver. Where trading
occurs under an emissions cap established pursuant to section
502(b)(10), the Act requires a 7-day advance notification for
each change under that cap. Consequently, the proposed language
allowing one-time notification is not included in today's part 70
revisions.
However, as stated in the August 1995 preamble, EPA believes
section 502(b)(10) was not intended to restrict any flexibility
already available under the regulations governing applicable
requirements. Thus, permits need not rely on section 502(b)(10),
and the 7-day notification period does not apply where the
underlying applicable requirements lawfully provide a different
notification time frame (including no notification).
For example, if a State has granted a cap for the purposes
of allowing certain minor NSR preapprovals, the State may have
determined that, under its minor NSR regulations (as they may be
revised to meet today's changes to part 51), no advance
notification is necessary for such preapproved changes under the
cap. However, section 502(b)(10) could be read to require 7-day
advance notification for all changes under this cap. As noted,
EPA believes that where the permitting authority issues a permit
authorizing trading under a permitted emissions cap that is
governed by an applicable requirement which does not require
7-day advance notification, then the section 502(b)(10)
requirement for 7-day advance notification does not apply. In
this case, the time period is governed by the minor NSR
regulations, not by section 502(b)(10).
Flexibility in operating permits can be provided through
emissions caps, advance approvals, and other flexible approaches
that allow changes without a permit revision, while assuring
compliance with applicable requirements. The appropriate
flexibility tools for a given source/applicable requirement
situation are dictated by the source's flexibility needs and by
the details of each applicable requirement facing the source.
Determining appropriate flexibility approaches requires both a
general awareness of the available flexibility options and a
specific knowledge of which options are available under the
relevant applicable requirements. The EPA is aware that many
State programs are working to develop flexible permits, and the
Agency supports and encourages these efforts. Several Agency
efforts are underway to clarify and promote flexible permit
development, and EPA intends to issue policy and guidance
providing more detailed information about designing flexible
permits. However, in many instances caps and advance approvals
are not appropriate or necessary, such as where facilities do not
make frequent or significant changes. Instead of a permit with
caps and advance approvals, these facilities may be better off
relying on the flexibility inherent in applicable requirements,
alternative operating scenarios, or the streamlining offered by
today's changes to the permit revision system.
C. Provisions for Section 502(b)(10) Changes
In August 1994, EPA proposed to delete the provision
allowing section 502(b)(10) changes ( 70.2 and 70.4(b)(12)(i)),
which, under the original part 70, allowed contravention of
permit terms not necessary for compliance with applicable
requirements, if the change contravening the permit term were not
a title I modification and did not exceed emissions allowed under
the permit, provided that a 7-day notice was given. State
litigants raised implementation concerns with this provision,
citing the difficulty of knowing which compliance term was or was
not a section 502(b)(10) change, and the fact that the source
could often make the decision without review by the permitting
authority. In response to these concerns, EPA proposed to delete
the provision, and require that changes which would have been
section 502(b)(10) changes will now need permit revisions,
including permit revisions more streamlined than section
502(b)(10)'s 7-day advance notification procedures, if the change
would conflict with the existing permit or trigger a newly
applicable requirement not provided for in the permit.
Several State commenters supported the proposed deletion,
although one recommended that EPA allow changes without a part 70
permit revision if the changes are exempt from review under a
State's NSR program. Many industry commenters opposed the
deletion of the definition of section 502(b)(10) changes and the
deletion of 70.4(b)(12)(i) on the grounds that the Act clearly
provides for such changes under section 502(b)(10). Several
commenters objected on the grounds that the section 502(b)(10)
change provision allows a source the opportunity to "clean up" a
permit which was initially laden with terms that the permittee
found to be unworkable or unnecessary. Some commenters suggested
that without this provision, a company would need a permit
revision to "switch brands of paint." Some commenters believe
that when a company changes its operations without triggering
some new requirement, its permit may contain terms that restrict
flexibility by requiring operation of a monitor or other
apparatus that the company is no longer required to operate.
They believe that sources should be able to change permit terms
in such situations under section 502(b)(10), since it would
require a 7-day notice alerting the State that the term was no
longer being followed, and allow removal of the term from the
permit without a permit revision.
For the following reasons, EPA is today deleting the
provision allowing section 502(b)(10) changes that contravene
express permit terms without requiring a permit revision. First,
while section 502(b)(10) does allow some changes without a permit
revision, other provisions of the Act clearly require that a
company operate only in compliance with its permit. For example,
section 502(a) reads, "After the effective date of any permit
program approved or promulgated under this title, it shall be
unlawful for any person to violate any requirement of a permit
issued under this title" (emphasis added). Permits must, in
turn, assure compliance with all applicable requirements under
the Act and the SIP (Sections 502(b)(5)(A), 504(a), and
505(b)(1)). In EPA's view, these statutory requirements are best
met if an issued permit is complied with in whole and without
exception, including all permit terms and conditions and
applicable requirements. The EPA does not believe that an
interpretation of section 502(b)(10) allowing violation of
express permit terms is consistent with other requirements of the
Act. The Agency believes that the proper way to remove permit
terms which the company believes it is no longer required to meet
is through a permit revision.
In response to concerns about the burden and delay of a
permit revision, today's part 70 revisions provide several
streamlined ways to revise a permit. If the changes are in fact
"details" unrelated to federally-enforceable compliance terms,
(i.e., they would have qualified as section 502(b)(10) changes
under the original part 70), they should be eligible for the de
minimis permit revision process. Similarly, if the change
affects the compliance monitoring contained in the permit, the
change is most appropriately handled through the applicable
permit revision track, not through section 502(b)(10).
Second, important objectives of title V are to improve and
assure compliance with relevant applicable requirements. Any
provisions ensuring operational flexibility must be consistent
with these objectives. Consequently, the Agency believes that
section 502(b)(10) must be read consistently with other
provisions of the Act so that it does not conflict with
requirements to assure compliance with the permit and its
applicable requirements. Thus, the Agency disagrees with
commenters who say that section 502(b)(10) must allow a company
unilaterally to decide that it will not comply with its permit.
In addition, EPA believes that to allow contravention of permit
terms after a permit has undergone review by the permitting
authority, the public, affected States, and EPA would render
these review processes irrelevant. Instead, EPA believes part 70
should, as today's action does, protect the ability of the
public, affected States, and EPA to review permit revisions,
where such review is appropriate, and to allow permit revisions
without review where the review would add little value.
Although EPA is deleting the definition of section
502(b)(10) changes and the provisions allowing for such changes
as originally defined in part 70, the Agency maintains that
section 502(b)(10) authorizes certain types of changes without
permit revisions. These changes are discussed in section V.E. of
this preamble. To avoid confusion, EPA is no longer using the
term "section 502(b)(10) changes" because it may continue to be
associated with the narrow definition used in the original
part 70.
D. Off-Permit Changes
In the August 1995 notice, EPA proposed to delete
70.4(b)(14) and (15). Section 70.4(b)(14) provided that a
State could allow a source to make a change without a permit
revision, if the change was not addressed or prohibited by the
existing permit, and if the change was not one of those listed in
70.4(b)(15), i.e., a requirement under title IV or modification
under title I of the Act. Changes made pursuant to 70.4(b)(14)
were called "off-permit" changes, because the permit was not
revised until it was renewed, instead of at the time the change
was made. Thus, the requirements to which the change was subject
remained off of the permit, or off-permit, until renewal.
Section 70.4(b)(15) provided that any source making an off-permit
change must submit a notice at the time of the change that
described the change, the change in emissions or pollutants, and
the applicable requirements that would apply. Off-permit changes
were not eligible for the permit shield.
The preamble to the August 1995 notice stated that the need
for off-permit provisions would be greatly reduced by provisions
of the proposed revisions which allow for rapid incorporation of
changes that have undergone State review programs, and also by
the provisions of the "notice-and-go" process. The preamble
stated EPA's belief that the proposed elimination of off-permit
provision would ensure that the permit is a contemporaneous and
comprehensive summary of all applicable requirements, which is
consistent with the statutory purpose of title V and favored by
most permitting agencies.
Comments by permitting agencies were generally in favor of
the proposal to eliminate the off-permit provisions, because most
State and local regulatory agencies have traditionally viewed
permits as allowing only those activities that are expressly
stated in the permit, and as disallowing activities that are not
expressly stated in the permit without a permit revision.
Industry commenters favored retaining the off-permit provisions,
although many of them agreed that the need for an off-permit
provision should be greatly reduced if the proposed streamlined
permit revision processes are adopted. Several commenters
favored retaining off-permit provisions for changes that are
expressly exempt from a State's minor NSR program, since changes
exempt from NSR are not relied on by the SIP for attainment or
maintenance of ambient standards. In these commenters' view, the
main purpose of title V is to assure compliance with the SIP.
Therefore, allowing changes that are exempt from the SIP's NSR
program to remain off-permit is appropriate for the purposes of
title V.
One industry commenter articulated several arguments that
the commenter believes compel EPA to retain the off-permit
provisions. The commenter contends that title V requires only
that a permit agency "have adequate authority" in its legislation
to "issue permits and assure compliance by all sources required
to have a permit under this title with each applicable standard,
regulation or requirement under this Act" (section 502(b)(5)(A)).
The commenter also noted that section 504(a) of the Act requires
that each permit "issued" under title V must have enforceable
emission limitations and standards, etc. to assure compliance
with applicable requirements. The commenter believes that both
of these sections are met if a part 70 permit at the time of
initial issuance or renewal contains all then-applicable
requirements, and the permitting agency has ample authority to
ensure that it does. The commenter believes neither section
requires that part 70 permits be continuously revised. In
addition, the commenter contends that sections 502(b)(9) and
502(b)(10) of the Act both reflect a "strong Congressional intent
for certainty and repose" during the part 70 permit term, unless
there are strong reasons for a permit revision. The commenter
also believes that concerns by regulatory agencies about the
effect of off-permit changes are misplaced, and asserts that
operating permits issued under State law, and State-only terms in
part 70 permits are not constrained by part 70.
In response to comments that off-permit provisions should be
retained for changes exempt from State minor NSR programs, the
Agency disagrees, on the grounds that title V requires permits
that "assure compliance with applicable requirements of this Act,
including the requirements of the applicable implementation plan"
(section 504(a)). Consequently, the Agency believes that a
part 70 permit must assure compliance with not just the SIP, but
with all applicable requirements. If changes that are exempt
from a State's minor NSR program are subject to applicable
requirements such as NSPS or MACT standards, or to the provisions
of State programs under sections 112(g) or 112(l), as some of
them are, the Agency believes the permit must assure compliance
with these requirements as well as it would assure compliance
with requirements that are subject to NSR. Thus, the Agency
disagrees that exemption from State minor NSR programs is an
adequate rationale for retaining off-permit provisions.
The EPA also disagrees with the comment that the
requirements of sections 502(b)(5)(A) and 504(a) of the Act are
met if the permit contains all then-applicable requirements at
issuance or renewal, and the permitting authority has ample
authority to ensure that it does. The requirements of
502(b)(5)(A) cited by the commenter require that the permitting
authority have authority to issue permits and assure compliance
with "each applicable standard, regulation or requirement," which
means, as the Agency reads it, that each time a change is made to
which an applicable requirement applies, the permit must be
revised to "assure compliance with that applicable requirement on
an ongoing basis, unless the permit already provides for
compliance with that applicable requirement.
In the Agency's view, the best way to assure compliance with
each applicable standard, regulation, or requirement of the Act,
as section 502(b)(5)(A) requires, is to require that the permit
be revised each time a change triggers an applicable requirement,
except where the permit already complies with the applicable
requirement by containing the terms implementing the requirement
or terms providing for advance approval of the change without a
permit revision. If the Agency were to follow the commenter's
suggestions, then it would not require States to revise permits
at all during the term of the permit, except for reopening the
permit to satisfy the requirements of section 502(b)(9), i.e.,
that the permit be reopened to add newly-promulgated
requirements. The EPA does not read the ongoing obligation to
assure compliance with each standard, regulation, or requirement
when applicable to permit such a result. On the contrary, the
Agency believes that a principal objective of title V is to
assure compliance with all applicable requirements of the Act,
not only those recognized at the time of issuance or renewal, but
also those that apply to changes made during the term of the
permit. Although this approach results in the loss of some
flexibility to permittees, eliminating the off-permit provisions
gains substantial environment benefits since companies must
certify compliance annually with applicable requirements that
previously were off-permit. Consequently, a company must certify
compliance with requirements to which it becomes subject up to 4
years earlier than it would have under the off-permit provisions.
Regarding the comment that sections 502(b)(9) and 502(b)(10)
of the Act reflect a Congressional intent to avoid permit
revisions, the Agency agrees that Congress intended that part 70
programs should, and in the case of section 502(b)(10) in limited
circumstances must, provide ways to avoid permit revisions
altogether. However, these provisions must be read consistently
with the requirements that title V must assure compliance with
all applicable requirements of the Act. The EPA believes that
eliminating the off-permit provisions is the best way to
reconcile these requirements.
Finally, the Agency emphasizes that elimination of the off-permit provisions affects only those changes made by the
permittee that trigger newly applicable requirements. These
changes, which were previously off-permit, must now undergo the
relevant permit revision procedures of 70.7(d), (e), (f), or
(g). In contrast, deletion of the off-permit provisions does not
affect applicable requirements that are adopted during the term
of the permit, since these are subject to the reopening
provisions under 70.7(j) under today's part 70 revisions.
Consistent with section 502(b)(9), applicable requirements
promulgated after issuance of the permit must undergo the permit
reopening procedures of 70.7(j)(2) if 3 or more years remain on
the term of the permit. If less than 3 years remain on the
permit, States may reopen the permit to incorporate newly-promulgated requirements, but are not required by part 70 to do
so.
E. Changes Under Section 502(b)(10)
The previously discussed changes to 70.4 have altered
provisions that bear on the Agency's interpretation of section
502(b)(10). As noted in section V.A. of this preamble, section
502(b)(10) of the Act should not be read to require States to
change applicable requirements to allow advance NSR or emissions
caps that replace current requirements. In addition, as noted in
section V.B. of this preamble, EPA believes that emissions cap
requirements provide an appropriate means of implementing section
502(b)(10), but should not be required where such caps would
conflict with applicable requirements. In preamble section V.C.,
EPA states that the provision for sources to make unilateral
changes that contravene part 70 permit terms is an inappropriate
means for implementing section 502(b)(10) consistently with other
provisions of the Act. Finally, as explained in section V.D.
above, EPA does not believe that the current off-permit
provisions are consistent with all title V requirements, and the
Agency is therefore deleting them as proposed.
Section 502(b)(10) must be read consistently with title V's
requirement to assure compliance with all applicable
requirements, as contained in such provisions as 502(b)(5)(A) and
504(a). The Agency believes that a consistent reading of the Act
and proper implementation of all its requirements would not be
achieved by any of the readings discussed above, or by any other
overly broad reading of section 502(b)(10). The EPA believes
that section 502(b)(10) is properly implemented through the
following provisions of 70.4(b)(12).
First, 70.4(b)(12)(i) provides for permitting authority to
include in a permit terms for trading under an emissions cap,
upon request by a permittee, provided the conditions of the
paragraph are met. Permit terms and conditions allowing changes
that lead to emissions increases and decreases pursuant to
trading under the emissions cap implement section 502(b)(10) in
EPA's view, so long as the conditions of 70.4(b)(12)(i) are met
to assure compliance with other requirements of the Act. Second,
70.4(b)(12)(ii) provides for changes that trade emissions
increases and decreases under the implementation plan, where such
emissions trades are provided for under the implementation plan,
so long as the conditions of the paragraph are met.
Finally, 70.4(b)(12) allows changes within a permitted
facility without requiring a permit revision, if the changes are
not modifications under any provision of title I of the Act, the
changes do not exceed the emissions allowable under the permit,
and the remaining requirements of 70.4(b)(12) are met. For the
reasons discussed above, one such requirement is that any changes
allowed pursuant to 70.4(b)(12) shall not contravene or
otherwise violate terms or conditions of the permit or any
applicable requirement. This requirement has been added to the
regulatory language to reflect this intent.
The EPA believes that the flexibility afforded by title V is
met not only through the above interpretation of 502(b)(10), but
also through the streamlined permit revision system being
established in today's rulemaking. The permit revision system
provides that, in many cases, changes that meet the criteria in
section 502(b)(10) (i.e., changes that are not title I
modifications and do not increase emissions allowable under the
permit), but that nonetheless trigger new applicable requirements
and require permit revisions, may be processed through procedures
more streamlined than those included in section 502(b)(10). In
short, the streamlined permit revisions process may require no
revision or delay in many instances where changes under section
502(b)(10) otherwise would have required 7-day advance
notification prior to the proposed changes.
Finally, EPA believes that the flexibility afforded by
title V extends to alternative operating scenarios, including
advance approvals. This approach offers an excellent means to
assure that the Act's objectives to assure compliance with
applicable requirements and to minimize delay associated with
permit revisions are achieved consistently. Therefore, EPA
believes that the interpretation of section 502(b)(10) taken
today, together with the streamlined permit revision system, and
expanded opportunities for alternative operating scenarios,
adequately provides for operational flexibility, yet remains
consistent with the other requirements of title V.
F. Time Period for Judicial Review
In the August 1994 notice, EPA proposed to require States to
extend the maximum length of the time period for filing petitions
for judicial review after a permit action. The original part 70
in 70.4(b)(3)(xii) specifies a time period of 90 days, or such
shorter time as the State shall designate. Several petitioners
noted that some existing State or local statutes provide for
longer periods and argued that it was inappropriate for the
Federal government to require States to shorten these statutes.
The EPA agreed and proposed to extend the maximum time period to
125 days, which the Agency believed would not require any State
or local agency to revise its statutes of limitation.
Ten industry commenters opposed this proposal. One argued
that 90 days is ample time for filing since potential petitioners
will generally know immediately upon permit issuance whether they
plan to petition or not. This commenter and others noted that
this time period should be balanced against the need for
finality. They feel that 125 days is too long in light of the
position that the sources' potential liability during this time
will effectively prevent them from securing financing, making
contractual commitments, and actually operating any change (even
one that was made via an otherwise streamlined process).
Finally, one commenter argued that the period should be shortened
to 60 days to be consistent with section 307 of the Act, which
governs EPA promulgation of rules and standards.
The EPA acknowledged in its proposal the need to ensure
finality of permit actions, noting that this was the basis of the
90-day limit in the original part 70. However, EPA does not
believe that extending the maximum time period to 125 days
significantly undermines this finality. Part 70 does not
preclude States from adopting shorter periods for review.
Furthermore, the Agency is not aware of any State or local
permitting authority who has lengthened or plans to lengthen its
statute of limitations as a result of this change to the part 70
regulations. The EPA stands by its position of minimizing
disruption to existing State statutes and is finalizing the
change as proposed.
The EPA noted in the 1994 proposal, and notes today, that
the maximum period of 125 days for judicial review under part 70
would not preclude States from adopting shorter periods.
However, EPA wishes to clarify that it also believes that the
judicial review time period has an implicit minimum length as
well. In developing the part 70 regulations, EPA elected not to
include an explicit requirement for the minimum length for
judicial review period. However, EPA notes that some opportunity
for judicial review must be provided according to
section 502(b)(6) of the Act. If an extremely short time period
is adopted, it would not constitute a valid opportunity for
judicial review, and EPA could not approve the State program.
Therefore, EPA wishes to discourage States from adopting judicial
review time periods which are unreasonably short.
G. Interim Approval Criteria
Section 70.4(d)(3) contains the criteria EPA uses to
determine if a program is eligible for interim approval. Two
revisions were proposed in August 1994 for that section. The
revision to paragraph (d)(3)(ii), promulgated on June 20, 1996
(61 FR 31443), allowed EPA to grant interim approval to programs
that did not include minor NSR changes as applicable
requirements.
The other proposed change, to paragraph (d)(3)(iv), would
have allowed EPA to grant interim approval to programs that
allowed minor NSR changes to be classified as minor permit
revisions and thereby be exempted from public review. Minor NSR
changes could not be classified as minor permit revisions because
they were interpreted to be title I modifications. The criteria
for what may be classified as a minor permit revision excludes
title I modifications. Since that proposal, EPA has adopted the
position that title I modifications do not include minor NSR
changes thus allowing them to be classified as minor permit
revisions and making the proposed change to paragraph (d)(3)(iv)
unnecessary. That change, therefore, will not be adopted.
VI. Changes to Section 70.5
A. Insignificant Activities
In August 1994, EPA proposed to add a sentence to 70.5(c)
to clarify its existing policy for counting the emissions of
insignificant activities and emissions levels in major source
determinations. This sentence specified that "no emissions from
an activity or emissions unit at a source may be discounted when
determining major source status."
Five commenters submitted comments on this provision (2
regulatory agencies and 3 industry representatives). The
regulatory agencies stated that they believed that the sentence
would require all fugitive emissions and all emissions of section
112(r) substances to count toward major source status in conflict
with the definition of major source and the applicability
provisions of the current part 70. Industry commenters also
stated that the proposal would interfere with the current
definition of major source because the definition does not
require insignificant activities to be included in major source
determinations.
In response to commenters, EPA would like to clarify that
proposed 70.5(c) would not have affected how fugitive
emissions, section 112(r) pollutants, or other types of emissions
would be treated in major source determinations under part 70.
This proposed provision was intended to clarify that emissions or
emissions units designation as "insignificant" should not be
categorically excluded from major source applicability
determinations. The determination of major source status is
separate from, and occurs prior to, the determination of how
activities or emissions are addressed in the permit application
in 70.5. The EPA believes that, while proposed 70.5(c) may
have been worded too broadly or imprecisely, it is clear from the
context of the provision that emissions designated as
"insignificant" are only "exempt" from certain application
content requirements. The lack of specific reference in the
definition of major source to "insignificant" emissions does not
mean that all such emissions should be either excluded or
included in major source determinations. Moreover, the final
definition of major source specifically addresses how fugitive
emissions and section 112(r) emissions are counted in major
source determinations. The EPA proposed this language because it
came to EPA's attention that many industrial representatives and
a few States were misreading the provisions of 70.5(c)
concerning insignificant activities to affect major source
determinations, and there was potential for resulting program
deficiencies which could affect EPA's approval of State permit
program submittals.
The EPA continues to believe that emissions should not be
excluded from major source applicability determinations solely on
the basis that they are deemed "insignificant" under the
provisions of 70.5(c) and that part 70 should include language
to clarify this point. Accordingly, today's revisions retain
this provision with minor wording changes to clarify its original
intent.
B. Certification Language
In its August 1995 notice, EPA proposed to revise the
language of 70.5(d) that requires the responsible official to
certify the truth, accuracy, and completeness of each part 70
application form, report, or compliance certification. This
proposal was intended to address issues raised by several State
and local governments in their petitions for review of part 70 as
to what certification language would be appropriate for the
responsible official to use to make this certification. The
governmental petitioners were concerned that EPA was requiring
certification language different from that required by the
National Pollutant Discharge Elimination System (NPDES) under the
Clean Water Act, since they read the original part 70
certification language as potentially establishing a less
rigorous standard for the inquiries on which certifications were
to be based. Beyond that, they noted that the meaning of the
NPDES language of 40 CFR 122.22(d) had been well established over
the years of its use, and that the meaning of the different
part 70 language would not be clear until it had been decided by
the courts. After careful review, EPA proposed certification
language similar to that found in the acid rain regulations
promulgated under title IV of the Act at 40 CFR 72.21(b)(2),
which EPA explained was modeled on the NPDES language.
State and industry commenters objected in general to the
proposed revisions to the certification language, they opined
that the original part 70 language was adequate to assure
responsible officials conduct thorough inquiries before signing
the certification, and they believed revisions to the original
part 70 language would be disruptive to States and create
confusion that would interfere with the implementation of
title V. Several other commenters believed that the proposed
language was significantly more stringent than the NPDES
language, that part 70 should track NPDES more closely, and they
suggested revisions to part 70 to make it more consistent with
NPDES. Whether commenters thought the original part 70 language
should be retained, unchanged, or revised to be more consistent
with NPDES, they were opposed to the proposal language requiring
the responsible official to "personally examine" and be "familiar
with," the statements and information submitted in the document
and its attachments.
Part 70 has been revised to make the certification language
of 70.5(d) more closely track the NPDES certification language
of 40 CFR 122.22(d). Although the certification language used by
the acid rain program is appropriate for those purposes, EPA
believes the more appropriate language for part 70 purposes is
the language used in the NPDES program. The EPA believes the
NPDES and title V programs are similar in terms of complexity of
information that must be included in forms and reports, and thus
the NPDES program provides a better model for sources to certify
the truth, accuracy, and completeness of forms and reports.
Since title V is such a broad program that applies to each
emissions unit at major sources, EPA agrees with commenters that
the phrases "personally examine" and "be familiar with" in the
proposed part 70 certification language would have required
responsible officials, who are relatively high-level managers
under the definition of "responsible official" in part 70, to
certify a potentially large amount of detailed information. The
EPA agrees with commenters that this would have been beyond the
normal scope of their knowledge and responsibilities. The
revised part 70 allows responsible officials to base their
certifications on the opinions of technical staff who may be
subject matter experts in the areas for which information is
being collected and reported. In addition, EPA believes the
revised part 70 requires the responsible official signing the
certification to take reasonable steps to ensure that what he or
she signs is true, accurate, and complete, not whether it
provides a sufficient basis for a court to decide a question of
law in the official's favor. The EPA believes differences in
language between the proposed part 70 and NPDES certification
language would have implied differences in meaning, and thus,
today's revisions will result in the part 70 language being
interpreted more consistently with the similar NPDES language.
VII. Changes to Section 70.6
A. Weekly Reporting of Alternative Scenarios
The original part 70 required sources, contemporaneous with
making a change from one alternative operating scenario to
another, to record the operating scenario to which it is
switching in a log at the permitted facility. As a point of
clarification, alternative operating scenarios are the various
methods of operation, configurations, etc., that are contained
in, and allowed by, the permit. The permit must include
monitoring provisions adequate to demonstrate compliance with
each scenario.
The EPA proposed to revise 70.6(a)(9)(i) in August 1994 to
require sources to send the permitting authority a weekly notice
of any changes in operating scenarios. In addition, the proposal
provided that no weekly notice was required if monitoring records
could be used to determine the operating scenario (because the
different operating scenarios would utilize distinctly different
monitoring which would be indicative of the specific operating
scenario). Industry commenters voiced opposition to the proposed
requirements for notification of changes in operating scenarios
as burdensome and unnecessary.
The EPA agrees with commenters that the weekly notice would
be too burdensome. Thus, the revisions to part 70 do not require
State permitting programs to require sources to provide weekly
notification to permitting authorities of changes in operating
scenarios. Part 70 does retain the requirement that sources
maintain an onsite log of changes in operating scenarios.
However, the provisions of 70.6(a)(6)(v) do provide that
permitting authorities may request any information (which could
include information concerning changes in operating scenarios) in
writing from any source when the permitting authority believes
such information will help them to determine compliance with the
permit.
B. Emergency Defense
1. Background
The August 1995 notice solicited comment on the emergency
defense provided in 70.6(g) that set forth the terms of an
affirmative defense that States could include in part 70 permits
at their discretion. The defense applied to violations of
technology-based emissions limits that are unavoidably caused by
"any situation arising from sudden and reasonably unforeseeable
events beyond the control of the source, including acts of
God...." Section 70.6(g) did not cover start-ups, shut-downs,
and preventative maintenance conditions. The petitioners in CAIP
v. EPA sharply disagreed about the breadth of the defense and
whether such a defense was appropriate. In the August 1995
notice, EPA solicited comment on numerous aspects of the defense,
including (1) whether the defense should be available solely for
emission limits established in the part 70 permit; (2) whether
EPA should allow a start-up, shutdown, malfunction (SSM) defense
for emission limits established in the part 70 permit; (3)
whether part 70 should allow States to grant sources temporary
authorization to make a change without a permit revision, as
needed to protect public health or welfare in emergencies; and
(4) the advantages and disadvantages of a uniform definition of
upset or emergency across the water and air permitting programs.
Each of these topics is discussed below.
2. Emergency Defense for Part 70-Only Permit Terms
a. Summary of the Proposal on Emergency Defense
In the August 1995 notice, at 70.6(g)(2), EPA proposed to
narrow the applicability of the emergency defense to emissions
limitations established in the first instance by the part 70
permit. The preamble noted that the NSPS and MACT general
provisions and most SIP's do not provide an emergency defense,
per se. The Agency was concerned about whether an emergency
defense applicable to such limits would slow the development of
technology or make enforcement slower and less sure. The EPA was
also concerned about the effect of a generic emergency defense on
State-established emission limits and State enforcement goals.
Finally, EPA was concerned about overlaying an emergency defense
for standards where a conscious decision not to provide one had
been made in the standard setting process (e.g., where a longer
averaging time for determining compliance was established in a
standard as a means of providing for startups, shutdowns, and/or
malfunctions).
The Agency solicited comment on whether to limit the
availability of the emergency defense to part 70-only provisions,
while noting it was still an open question as to whether part 70
can and should provide an emergency defense at all. The notice
identified several types of emission limits that would be
developed for the first time in part 70 permits and noted that
some of those limits met the proposed definition of technology-based limits, i.e., the stringency of the limits are based on
determinations of what is technologically feasible, considering
relevant factors.
b. Summary of Comments on Emergency Defense
One environmental group commented that the overlay of an
emergency defense in a part 70 permit provision would be an
unlawful modification of the applicable requirement, that the
defense was not necessary, and at most it should be limited to
terms that are found only in (i.e., established by) part 70
permits.
On the other hand, numerous industry commenters strongly
asserted that the defense should broadly apply to health-based
standards as well as technology-based standards and to standards
created in a Federal or State rule, as well as to requirements
established solely in the part 70 permit. They contended that a
defense should be available when sources rely on technology to
comply with standards under the Act because it is unfair to
penalize a source when technology fails due to circumstances
beyond the control of the source. A commenter asserted that
because the emergency defense was discretionary, there is no need
for concern that the defense would decrease the stringency of
previously established standards or would have an adverse affect
on technology forcing or enforcement strategies. Commenters
offered several reasons why reliance on prosecutorial discretion
is insufficient protection for industry in emergency situations.
First, there is no guarantee that EPA or the State would choose
to exercise this discretion in an emergency. Second, there
remains the possibility of citizen suit. Third, many existing
standards were developed prior to the 1990 Amendments, which
increased EPA's penalty authority for violations and increased
the visibility of violations by requiring increased monitoring,
recordkeeping, and reporting. One commenter asserted that an
upset defense is legally required for all technology-based
limits. Finally, a commenter suggested that the emergency
defense should be mandatory, not discretionary.
c. Discussion of Emergency Defense
Defense not retained for Federal standards. Although EPA
has carefully weighed concerns from industry commenters regarding
the emergency defense, EPA believes that the emergency defense
should not be extended to federally-promulgated requirements. In
general, EPA believes that its authority under title V to provide
for affirmative defenses for violations of permit terms is
limited. The statutory language of title V does not authorize
establishing exemptions from requirements established pursuant to
other Act provisions. (As noted in prior Federal Register notice
discussions on this topic, EPA believes general authority exists
to establish provisions (such as an affirmative defense)
addressing the limits of technological controls in the title V
permitting program if EPA failed to consider these concerns when
developing the underlying requirement.) However, where the
rulemaking establishing a limit does consider the limits of
technological controls, there is at best a questionable basis in
law, and no compelling basis in policy, for providing additional
or different provisions under title V, even if the defense is
available at the discretion of the State. Accordingly, the
August 1995 notice indicated that there was little or no basis
for providing a SSM defense in part 70, since EPA believes it has
considered the failure of technology in setting the major
technology-based standards under the Act (NSPS and MACT), or at a
minimum, has given commenters on those standards an opportunity
to show that provisions to account for technology failures should
be incorporated into those standards. For this reason and
because the emergency defense in 70.6(g) overlaps with the
protection of the SSM defenses and exemptions in existing
federally-promulgated standards, EPA believes that no further
defense should be extended through the permit for Federal
technology-based standards. The EPA believes that with respect
to Federal technology-based standards, sources should have a
level playing field in which sources that are subject to NSPS and
MACT standards may avail themselves of the same defense
regardless of the source's location, an objective that is
undercut by providing States discretion to adopt an additional
defense. As to Federal health-based standards, EPA does not
believe it has the authority to provide a defense for such
standards, as is explained below.
Defense retained for certain SIP limits. The EPA believes
that the emergency defense should be retained for certain State
limits. Some SIP's do not contain provisions that provide
sources relief from violations during SSM conditions. In
addition, some SIP provisions are narrowly drawn to provide
significantly less relief when technology fails than would be
allowed under the SSM provisions of the NSPS and MACT standards.
Thus, while the emergency defense in the original 70.6(g) was
largely redundant with the SSM exemption for NSPS and MACT
standards, there was less overlap with State SIP rules. The EPA
is aware that few SIP's address emergencies per se (as opposed to
SSM conditions), other than those that have been revised to
incorporate defenses designed to bring the permit program into
compliance with 70.6(g). For these reasons, EPA believes it is
appropriate to retain the emergency defense for technology-based
SIP provisions, again at the discretion of the State. The fact
that technology-based standards contribute to the attainment of
the health-based NAAQS or help protect public health from toxic
air pollutants does not change their character as technology-based standards. (On the other hand, if Federal standards such
as NSPS or MACT standards are incorporated into the SIP by a
State as a State standard, the incorporation does not alter the
fact that the emergency defense would be inapplicable to permit
terms and limits based on those standards.) The EPA will leave
it to those States to decide in the first instance whether
extending the defense to technology-based limits in the SIP would
have any effect on State goals regarding enforcement and the
development of technology. States must also account for the
effects of extending the defense in their attainment
demonstrations.
Health-based standards. The EPA does not agree that it has
the authority to or that it would be appropriate to create in
part 70 an emergency defense to health-based standards. The
emergency defense is inapplicable to standards set without regard
to technological feasibility, such as NESHAP, and to State rules
or permit terms (such as limits that result from modeling
exercises) for which the permitting authority directly links
compliance to attainment of the NAAQS or the achievement of a
health-based standard. Even for health-based standards, however,
EPA agrees that as a matter of exercising its enforcement
discretion, it may be inappropriate for EPA to impose a penalty
for sudden and unavoidable malfunctions caused by circumstances
entirely beyond the control of the source. Indeed, EPA has often
used its enforcement discretion by declining to seek penalties in
such cases. However, case law and Agency policy have
consistently recognized that exemptions and affirmative defenses
should not be available for violations of health based standards.
See memorandum from Kathleen M. Bennett, Assistant Administrator
for Air, Noise and Radiation, dated 2-15-83, entitled "Policy on
Excess Emissions During Startup, Shutdown, Maintenance, and
Malfunctions" (hereafter "Bennett memorandum"). To allow
exemptions and affirmative defenses to health-based standards for
periods of excess emissions can pose a threat to national ambient
air quality standards and other requirements, such as pre-1990
NESHAP, where health considerations were considered paramount to
failures of technology.
The EPA's policy is to use an enforcement discretion
approach for exceedances of health-based standards due to sudden
and unavoidable malfunctions. The EPA generally considers
several criteria for the exercise of that discretion, including
but not limited to a requirement that the control equipment was
maintained and operated in a manner consistent with good
practices for minimizing emissions, that repairs were
expeditiously completed, and that excess emissions were
minimized. The EPA disagrees that this approach is unfair to
industry and notes that industry has not documented in the record
instances of unfair enforcement actions to support their
concerns. Although industry commenters have raised the prospect
of numerous citizen suits as grounds for an emergency defense,
commenters provided nothing beyond speculation that sources might
be subject to unreasonable penalties for violations of standards
during emergencies. Even so, EPA believes that much of
industry's concern about citizen suits should be allayed by the
retention of the emergency defense for State technology-based
limits.
Increased monitoring, recordkeeping, and reporting
requirements. The EPA does agree that violations will become
more apparent to permitting agencies and to the public as a
result of the monitoring, recordkeeping, and reporting
requirements of part 70, but disagrees that this is a valid
reason for enlarging the defense to include health-based
standards. To the contrary, better enforcement is one of the key
objectives of title V and the 1990 Amendments. A primary benefit
of the title V program is that it clarifies which requirements
apply to a source, including reporting requirements. As a
result, the source, States, EPA, and the public can better
understand the requirements to which the source is subject,
whether the source is meeting those requirements, and the reasons
for any periods of noncompliance. The title V program was
designed to increase source accountability and enhance compliance
and enforcement. Also, with respect to the concern about higher
penalties subsequent to passage of the 1990 Amendments, EPA does
not agree that higher penalties in and of themselves would
justify a defense against enforcement actions for sources that
exceed emission limits. Such a defense would be contrary to the
intent of the Act to increase compliance through the Agency's and
citizens' expanded enforcement authority.
Emergency defense not required for all technology-based
standards. The EPA disagrees that it is required to extend an
"upset" defense to all technology-based standards. The commenter
relies on case law involving the Clean Water Act in which the
courts have required EPA to provide an "upset" defense which is
similar to both the emergency defense provided by 70.6(g) and
to the SSM exemptions and defenses that are contained in numerous
existing requirements. As stated in the August 1995 notice, the
relevant case law is split. While several courts have required
EPA to provide an upset defense to address the fallibility of
technology, other courts have not, out of concern that such a
defense was inconsistent with Congress's intent that technology-based effluent limits force technological development and that
enforcement of such limits be swift and direct. See 60 FR 45559
for a further discussion of relevant cases. Furthermore,
commenters did not demonstrate or even allege that specific
existing Federal standards have failed to account for the
fallibility of technology. The EPA is not aware of Federal
standards that are lacking in this respect. If they were, the
more rational solution would be to address the problem through
revisions to each standard, rather than an across-the-board fix
that treats all standards alike regardless of whether the
underlying standards have already accounted for technological
fallibility.
Limits created in the part 70 permit. The August 1995
notice indicated that where the part 70 permit itself creates the
requirement, an emergency defense may be appropriate.
Requirements created in part 70 permits include technology-based
limits pursuant to sections 112(g) and 112(j) of the Act and
alternative limits pursuant to 70.6(a)(1)(iii) and section
112(l) of the Act, which may or may not be technology-based, as
explained below.
Other limits that are set in the permit include limits under
section 112(i)(5) of the Act and limitations on PTE. These do
not meet the definition of technology-based standards because
they are not based on a determination of what is technologically
feasible. Accordingly, the emergency defense does not apply to
such terms. However, 70.6(g) does not limit State authority to
fashion appropriate limits on mass emissions. States may have
authority under State law to account for SSM or emergency
conditions when creating these limits. If so, the fact that the
State part 70 program does not authorize the emergency defense is
irrelevant. However, EPA notes that since PTE and section
112(i)(5) limits are designed to limit annual mass emissions
below the major source thresholds, the effect of emissions during
emergency or SSM events on the threshold must be considered
(i.e., will the limit, taking into account its emergency or SSM
provisions, effectively keep the source below the relevant annual
emissions thresholds).
For alternative standards under 70.6(a)(1)(iii) and
section 112(l), in general, the Agency believes that the
establishment of an exemption or affirmative defense is
appropriate only where the standard for which the alternative is
developed contains such an exemption or defense. Absent such a
defense in the original requirement, a source would need to show
that an alternative requirement containing a defense was, despite
its defense, equivalent to the original requirement. Whether
equivalency could be demonstrated depends on whether emissions
during malfunctions or emergencies can be estimated and factored
into the equivalency determination. If an alternative with an
exemption or defense can be shown to be equivalent, then part 70
may authorize it. Conversely, an alternative with a defense that
cannot be shown to be equivalent could not be approved by EPA.
After considering whether to extend the emergency defense to
limits established pursuant to 112(g) and 112(j), EPA was unable
to justify providing the defense to limits under 112(g) and
112(j) when it would not be available to those set under 112(d).
As stated above, EPA does not believe it is appropriate to retain
the emergency defense for MACT standards because EPA considered
the failure of technology when setting the standards and because
the defense is largely redundant with the SSM exemption that
applies to MACT standards. The EPA believes it would be unfair
if a source that is subject to 112(g) is granted an emergency
defense but the same type of source with the same modification
would be denied the defense if its modification occurred after
the 112(d) standard is effective.
An emergency defense for limits established pursuant to
112(g) and 112(j) would be largely redundant since part 63
provides a malfunction exemption for "any sudden, infrequent, and
not reasonably preventable failure of air pollution control
equipment, process equipment, or a process to operate in a normal
or usual manner." The exemptions provided for in the general
provisions may be applied to 112(g) and (j) requirements. The
EPA believes that most conditions that qualify as emergencies
would also qualify as malfunctions as defined in part 63. For
the remainder, natural disasters, EPA believes that enforcement
discretion would prevent the source from unfairly being held to a
standard with which it was impossible to comply. The EPA and
States can consider any demonstration by the source that the
excess emissions were due to an unavoidable occurrence in
determining whether any enforcement action is required. With
respect to industry's concern about citizen suits, EPA is not
persuaded by comments from industry that there is cause for
significant concern during natural disasters that would not
otherwise be covered by the SSM exemption applicable to MACT
standards. When a natural disaster such as flood or earthquake
or other legitimate emergency causes a source to exceed its
emission limits, EPA believes citizens are unlikely to initiate
enforcement actions. Should this prove not to be the case, and
should courts in such actions decline to exercise their
discretion to not impose penalties under such extenuating
circumstances, EPA would reconsider its position.
3. Start-Up, Shut-Down, Malfunction Defense for Part 70-Only
Permit Terms
a. Summary of the Proposal on SSM Defense
In the August 1995 notice, EPA proposed to allow States to
extend a SSM defense to technology-based limits established in
the part 70 permit. It solicited comment on whether such a
defense should be conditioned on the submittal of and adherence
to a plan like that required in 63.6(e)(3).
b. Summary of Comments on SSM Defense
Commenters generally supported extending a SSM defense to
technology-based requirements established in the part 70 permit.
They asserted that such a provision would remove any doubt that
States can authorize an affirmative defense to violations of
part 70 permit conditions during SSM periods and that the defense
is consistent with the goal of providing States flexibility in
managing their part 70 programs. Commenters generally agreed
that an affirmative defense for SSM conditions should be
conditioned on the submittal of, and adherence to, a SSM plan.
c. Discussion of SSM Defense
Given that the universe of technology-based changes for
which such a defense would be appropriate is limited to 112(g)
and 112(j), there is no need for part 70 to address this issue.
A State establishing a 112(g) or 112(j) limit is authorized to
incorporate the SSM provisions of the part 63 general provisions.
4. Advance Authorization for Emergencies
a. Summary of the Proposal on Emergency Authorization
In the August 1995 notice, EPA solicited comment on whether
part 70 should grant a source temporary authorization to make a
change without revising its permit, as needed to protect public
health or welfare in emergencies, such as natural disasters.
Both the South Coast Air Quality Management District and the
State of New York have available as a matter of State law a
mechanism for granting sources temporary authorizations to make
changes without revising the sources permits under specified
circumstances (such as earthquakes, fires, and severe winter
storms) in accordance with proscribed procedures.
b. Summary of Comments on Emergency Authorization
Commenters were generally supportive of this proposal and
cited examples of situations where responses to emergencies and
natural disasters forced a source to exceed permit limits. It
was suggested that the defense should be available to both
privately- and publicly-owned facilities that provide essential
services. Many commenters suggested that given the wide range of
activities that may qualify for temporary authorization, EPA
should let States define the scope of activities that qualify.
Several commenters proposed procedural safeguards for the
authorization. One commenter proposed the adoption of a defense
that would be applicable to National security emergencies.
Several commenters argued that reliance on prosecutorial
discretion is insufficient protection from liability in these
situations because the Act allows private citizens to bring an
unjustified enforcement action in a case where compliance was
impossible.
c. Discussion of Emergency Authorization
After further consideration, EPA does not believe such an
authorization is warranted. In the Agency's view, the exercise
of enforcement discretion and judicial notions of equity should
prevent the imposition of penalties for violations incurred as a
result of actions taken to safeguard the public from serious harm
in times of emergency. For example, if a power plant needed to
produce more power in an emergency and consequently violated a
permit term, it is highly unlikely that the State or EPA would
consider bringing an enforcement action. It is also doubtful
that citizens would waste time and resources by seeking to
prosecute a violation caused by a source's actions to respond to
a public health crisis. The EPA is unaware of any instances
where an enforcement action was brought against a source that
violated an emissions limit due to natural disaster, nor did the
commenters provide any examples where States, EPA, or citizens
sought enforcement under these circumstances.
5. Uniform Definition of Emergency for Air and Water Permits
Programs.
a. Summary of Proposal on Emergency Definition
The EPA solicited comment in the August 1995 notice on the
advantages and disadvantages of a uniform definition of upset or
emergency across the water and air permitting programs. The
emergency defense in 70.6(g) was modeled on, but not identical
to, the definition of "upset" under the NPDES regulations (40
CFR 122.41(n)).
b. Summary of Comments on Emergency Definition
Commenters were split on this issue, with a majority
favoring a uniform definition. Those favoring different
definitions pointed to the vastly different control strategies
involved under the air and water programs.
c. Discussion of Emergency Definition
The EPA does not believe that on balance, there are
significant advantages to revising the definition of "emergency"
to be identical with the definition of "upset." The EPA does not
agree with commenters who suggested that the definition of
"upset" is more precise and objective than the definition of
"emergency." The EPA believes that courts, States, EPA, and the
public can readily ascertain the meaning of the term "emergency."
Also, the emergency defense is designed to supplement the
traditional SSM provisions that are found in air standards while
the upset provision of the NPDES program was envisioned as a
supplement to the "bypass" provisions in the NPDES regulations.
Since the definitions of "emergency" and "upset" were designed to
complement different defenses, it would be difficult to make them
identical without affecting the Agency's goal in adopting them
initially. Furthermore, EPA agrees with the commenter who stated
that an identical defense for different media is not warranted
because of the vastly different control strategies required for
protecting the air and water.
XI. Program Transition
A. Submission of Initial Programs
From time to time, EPA allows out-of-date requirements to
remain applicable until regulated entities have had a reasonable
opportunity to conform to the new requirements. Some refer to
this concept as "grandfathering."
In the August 1994 notice, 70.4(j) - Savings Provision was
proposed to be added in anticipation that around the time part 70
was projected to be changed to include the new permit revision
system, some initial State part 70 programs would not have been
submitted. It was expected that the question would arise as to
which version of part 70, the original or the changed, were these
programs to conform. The proposed 70.4(j) would allow a 6-month period after the publication date of the part 70 changes
(this would be a one-time, date-specific provision geared only to
this one part 70 revision action) during which a new program
submission could be based on the original part 70. After that 6
months, any program submittals would have to be based on the
revised part 70. This grandfathering was necessary since, due to
the time it takes to adopt regulations, it might be impossible
for a State to develop a program in 6 months or less which would
meet all the revisions to part 70. Alternatively, States could
choose to meet some or all of the revised part 70 provisions in
their original program submittal, and there would be no reason
for EPA to object to this approach.
Nine commenters addressed the proposed 70.7(j). All
supported the grandfathering concept. All commenters either
wanted a longer period, 12 or 18 months, or made suggestions such
as phasing in the part 70 changes or not making them applicable
until permit renewal. In summary, all commenters felt the
provision essential but felt the 6 months was too short. No
commenter mentioned interim approvals.
At this point, all State and local programs have been
submitted and approved by EPA. The provision in 70.4(j) is
being adopted, however, because all Tribal programs have not been
submitted at this time. The 6 months is being retained because
EPA wishes to minimize the time after part 70 is revised that new
programs will adhere to the original part 70. Tribal programs
are not bound by submittal time limits and the imposition of a
Federal program as were State programs. A Federal program is
already in place for any tribal lands not covered by a Tribal
program. If a Tribal program submittal 6 months after today's
date cannot meet the revised part 70, submittal may be delayed
until the necessary program changes can be made to meet the
revised part 70. The only penalty will be a longer period before
the Tribal program can replace the Federal program on those
Tribal lands.
Section 70.4(j) was proposed to apply to new program
submissions only. For added clarity, the word "initial" has been
added to the first sentence of that section to avoid confusion
that the 6 month provision may apply to program revisions
submitted to meet today's revisions to part 70.
B. Submissions of Program Revisions to Conform to the Revised
Part 70
In creating the original part 70, it was realized that no
program is static and from time to time changes would be made to
part 70 and States would need time to adapt to those changes.
Accordingly, the original part 70 provides a time period for
States to revise their part 70 programs in response to changes to
part 70 and submit them to EPA for approval. This provision was
in the original 70.4(a). It allowed 12 months, or other time
authorized by EPA, after the changes to part 70 for States to
submit to EPA program revisions to conform to part 70 changes.
These provisions were applicable to any change to part 70.
In the August 1994 notice, EPA proposed that the
grandfathering provisions ( 70.4(a) in the original part 70)
relating to submission of program revisions to meet any changes
to part 70 be moved to 70.4(i)(1), which pertains to program
revisions. The timeframes in these provisions were expanded from
the original part 70. The proposal would require program
revisions necessary to meet a changed part 70 to be submitted
according to the following:
(i) Within 180 days if no new statutory authority or
regulatory revisions are necessary;
(ii) Within 12 months if no new statutory authority is
needed but regulatory revisions are necessary;
(iii) Within 2 years if new statutory authority is needed;
or
(iv) . . . any other time period that the Administrator
determines is appropriate to allow for program revision.
Nine commenters expressed support for a reasonable time
period to revise programs. Concerns focussed on the proposed
timeframes being too short to accomplish program revisions.
The preamble to the August 1995 notice (page 45551, third
column, second paragraph) proposed to invoke the Administrator's
authority under the proposed 70.4(i)(1)(iv) to provide States 2
years to submit program revisions to meet the changed part 70,
regardless of what changes were needed to the programs. The
justification was that this specific set of part 70 revisions was
very complicated and would require considerable effort on the
part of the States.
The discussion went on to recognize some States' concerns
over making two program revisions, one to address interim
approval issues followed by another to meet the changed part 70.
The notice proposed (page 45552) to allow States with an interim
approval to combine the two program revisions into one and delay
submittal up to the proposed deadline to submit the part 70
changes, i.e., 2 years after changes to part 70 are promulgated.
On October 31, 1996, in response to the August 1995 proposal
to allow combining of program revisions and allow up to 2 years
after part 70 is changed for their submittal, EPA took a
rulemaking action (61 FR 56368). Rather than allow the August
1995 proposal concerning combining State program revisions to
persist and give the impression that all interim approvals were
going to be extended, a final action was taken to bring the
uncertainties to closure. A June 13, 1996 policy memorandum
("Extension of Interim Approvals of Operating Permits Programs")
set out the policy for combining program revisions, but it had to
be followed by a rulemaking action to actually extend interim
approvals.
The October 1996 notice provided a 10-month extensions to
programs already granted interim approval by the June 13, 1996
date of the memorandum, because EPA's August 1995 proposal could
have caused some States to quit work on their interim approval
deficiencies thinking they had up until 2 years after part 70
changes to submit them. (The 10 months was the time that had
lapsed between the August 1995 notice and the June 1996
memorandum.) In the June 1996 memorandum and the October 1996
notice, the 2 years was shortened to 1 year or 18 months (in
terms of program revision submittal, not interim approval
expiration, interim approvals would expire 6 months after the
submittal date) depending on whether regulatory changes or
legislative authority, respectively, were needed to meet the
revised part 70.
The combining of program revisions (one to correct interim
approval deficiencies and the other to meet the revised part 70)
now becomes an option that the permitting authority may or may
not choose, and there is a shortening of time to meet the changed
part 70 if the option is chosen by the State.
At any time States may choose to meet some or all of the
changed part 70 provisions. This may be at the option of the
State, and may be in conjunction with correcting interim approval
deficiencies or at any other time. The only requirement
applicable in terms of meeting the changed part 70 is that all
necessary program revisions must be submitted by 2 years after
today's date.
To clarify that States may choose to meet some of the
provisions of the revised part 70 when then correct their interim
approval program deficiencies, language to that effect has been
added to 70.4(e)(3). The language first notes that in judging
the adequacy of program submittals to correct interim approval
deficiencies, the version of part 70 that was in effect at the
time of the interim approval will be the criteria. The language
then goes on to provide the option, as noted above, to meet some
of the provisions of the revised part 70 in lieu of the original
part 70. As a further clarification, language is also added to
70.4(i) to stipulate that until a State revises its program,
and EPA approves the program revision, to meet any revisions to
part 70, the version of Federal and State regulations in effect
prior to being revised will be in effect. This is only a
statement of the implicit understanding that was already in
part 70.
If a State does not choose the program revision combination
described above, or the program already has full approval, the
Administrator is exercising her option under 70.4(i)(1)(iv) to
allow up to 2 years for submittal of part 70 program revisions
necessary to meet today's revisions to part 70. Section
70.4(i)(2) indicates that EPA will take rulemaking action to
approve or disapprove any program revisions submitted to meet any
revisions to part 70. No timeframe for this action is provided
since these provisions are generally applicable to any program
revision submittal and the time needed for EPA to act will vary
according to the complexity of any submission.
The Agency will evaluate program revisions submitted to meet
today's part 70 revisions and complete approval action as soon as
possible. If any deficiencies are identified in a program
revision submission, EPA will work with the State to correct
them. If a State does not correct deficiencies such that EPA can
approve the program as fully meeting part 70, EPA may disapprove
the program revisions ( 70.4(i)(2)(iii)). Upon disapproval, EPA
may implement a Federal operating permits program in accordance
with part 71.
The Agency, of course, prefers to take a necessary and
reasonable period of time to work with States to correct program
deficiencies rather than to act quickly to impose a Federal
program. The Agency intends to maintain a cooperative working
relationship with States and aid States in correcting
deficiencies and is not bound by 70.4(i) to impose a Federal
program within any certain timeframe. However, the Agency, in
general, will not exceed the timeframes provided in 70.10(b)
for correcting program deficiencies and implementing a Federal
program. Those timeframes include a limit of 18 months for
program correction after EPA notifies the State of a deficiency
and implementation of a Federal program 2 years after the notice
if corrections to the program have not been submitted and
approved by that time. The timeframes also include the provision
that EPA may implement a Federal program immediately if the State
has not taken significant action to correct the program within 90
days of a notice of program deficiency.
XII. Tribal Programs
Today's action finalizes several regulatory provisions that
affect Indian Tribes, including minor clarifications to
definitions as well as provisions affecting disapprovals of
Tribal programs, operational flexibility requirements, and the
definition of "affected State." These provisions are discussed
in detail in this section.
On August 25, 1994 (59 FR 43956, "Indian Tribes: Air Quality
Planning and Management," hereafter "proposed Tribal authority
rule") EPA proposed regulations specifying those provisions of
the Act for which it is appropriate to treat Indian Tribes as
States. Therein (59 FR 43971-72) EPA described expectations for
Tribal programs in implementing various aspects of the part 70
program and how they might differ from those expected for State
part 70 programs. The August 31, 1995 part 70 revisions proposal
announced EPA's intentions to amend part 70 to conform part 70 to
the proposed Tribal authority rule. The EPA solicited comment on
whether the August 1995 proposal accurately proposed to implement
the changes to part 70 previously described in the proposed
Tribal authority rule.
Several commenters noted an inconsistency between the
proposed Tribal authority rule and the August 1995 part 70
proposal, in that the August 1995 proposal provided that Tribal
part 70 programs would not be disapproved while the proposed
Tribal authority rule indicated that inadequate Tribal submittals
would be disapproved. The EPA agrees with the commenters that
EPA should disapprove Tribal programs that are inadequate.
Consequently, the proposed addition to 70.4(e) that no Tribal
program will be disapproved is not being adopted. However, in
general, EPA expects there to be few, if any, disapprovals
because EPA expects to work closely with Tribes in developing
part 70 program submittals. Given that Tribes face no deadlines
for submittal, there is no reason to expect submittals that
warrant disapproval. Also, EPA wishes to clarify that Tribes do
not have a duty to resubmit part 70 programs following
disapproval and will not face sanctions for failing to do so.
Although sanctions will not apply to Tribes by November 15, 1997,
to protect Tribal air quality EPA will promulgate, administer,
and enforce a Federal operating permits program for Tribes that
lack approved programs, as provided in 71.4(b).
The proposed Tribal rule suggested that the three
operational flexibility provisions in 70.4(b)(12) and the
emissions trading and alternative operating scenario provisions
of 70.6(a)(8-10) would be optional for Tribes. Initially, EPA
believed that the technical expertise required to implement
operational flexibility provisions would make it too difficult
for Tribal programs to obtain EPA approval. Accordingly, the
Agency proposed in the Tribal authority rule that for purposes of
these provisions, Tribes would not be treated in the same manner
as States. Subsequently, the August 1995 part 70 notice
incorporated the approach of the proposed Tribal authority rule
by proposing that 70.4(b)(12) and 70.6(a)(8-10) not apply to
Tribal programs.
In response to the proposed Tribal authority rule,
commenters objected to position in the proposed part 70 that
Tribal part 70 programs would not be required to include the same
operational flexibility provisions required of State part 70
programs. The Agency then reconsidered the issue. The EPA now
believes that a better approach would be to treat Tribes in the
same manner as States for purposes of these provisions, while
providing sufficient technical assistance, if needed, to enable
Tribal permitters to issue permits that meet these operational
flexibility requirements. Such an approach will assure that
sources will be provided maximum flexibility regardless of
whether the permitting agency is a Tribal or State agency. In
addition, it will afford sources that are subject to Tribal
part 70 programs the benefit of streamlined provisions that have
been proposed for part 70. Consistent with the Tribal authority
rule promulgated on xxx 1997 (62 FR xxx), today's action subjects
Tribal permitting programs to all of the operational flexibility
provisions to which State programs are subject. The phrase
"Except for Tribal programs," is, therefore, not being added to
the beginning of the first sentences in 70.4(b)(12) and
70.6(a)(8-10) as proposed.
The EPA also proposed that 70.8(b) be revised to require
that permitting authorities give notice of each draft permit or
draft permit revision to any eligible Indian Tribe that
administers a Tribal program and that otherwise meets the
definition of "affected State" set forth in 70.2. Under the
provision adopted today, an Indian Tribe would need to (1) meet
the eligibility requirements of section 301(d)(2) of the Act,
implemented by 40 CFR part 49; (2) administer a review program,
and (3) satisfy the locational requirements of the "affected
State" definition, to receive notice under 70.8(b).
The EPA expects that most recognized Tribes will readily be
able to meet the eligibility requirements established in 40 CFR
part 49 for being treated in the same manner as a State for the
limited purpose of receiving notice pursuant to 70.8(b). To be
treated in the same manner as a State for purposes of receiving
notice, a Tribe must meet the requirements of 49.6. Sections
49.6(a-c) require that the Tribe be federally recognized, that
the Tribe has a governing body carrying out substantial
governmental duties and functions, and that the functions to be
exercised by the Tribe pertain to the management and protection
of air resources within the exterior boundaries of the
reservation or other areas within the Tribe's jurisdiction.
Section 49.6(d) requires that the Tribe is reasonably expected to
be capable, in the EPA Regional Administrator's judgment, of
carrying out the functions to be exercised in a manner consistent
with the terms and purpose of the Act and all applicable
regulations.
Tribes that want to receive notice under 70.8(b) are not
required to submit a part 70 program to meet the capacity
requirement of 49.6(d). The EPA recognizes that some Tribes
may develop a very limited permit program, at least initially,
that focuses on review of permitting actions of neighboring
jurisdictions. To demonstrate the capacity to receive notice
under 70.8, a Tribe need only designate a person to receive the
notice and inform the Regional Administrator of the designation.
A letter from the governing body of the Indian Tribe requesting
notice under 70.8(b) and designating the person to receive the
notice would satisfy the requirements of capacity and the
administration of a review program for purposes of 70.8(b)(1).
Accordingly, EPA has adopted a provision that clarifies the
meaning of "administers a Tribal program" and clarifies that the
Tribe would need to meet the requirements of paragraphs (1) and
(2) of the definition of "affected State," which refer to the
proximity of the source subject to the permitting action.
The EPA has also made minor revisions to several definitions
that affect Indian Tribes. The definition of "Eligible Indian
Tribe" was changed to clarify that to be treated in the same
manner as a State, Tribes must not only comply with the
requirements of section 301(d)(2) of the Act but also with the
regulations that implement that section. Also, as a convenience
to the reader, EPA has included the statutory definition of
"Indian Tribe" in lieu of referring to the statutory citation
(section 302(r) of the Act). In addition, EPA revised the
definition of "State" to refer to Indian Tribes. The EPA adopted
this approach in lieu of adding numerous references to "Indian
Tribes" and "Indian governing bodies" throughout the final rule.
In those few instances when meaning of the term "State" does not
include those terms, part 70 so specifies. For example, the
language of 70.4(a) which states the required submittal dates
for State part 70 programs also excludes Indian Tribes from the
definition of "State" for purposes of the submittal deadline.
Similarly, Indian Tribes are not within the meaning of "State"
for purposes of 70.4(l), which discusses sanctions for failing
to adopt or adequately administer or enforce an approvable
part 70 program.
XIII. Administrative Requirements
A. Docket
The docket for this regulatory action is A-93-50. The
docket is an organized and complete file of all the information
submitted to, or otherwise considered by, EPA in the development
of this 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 (except for interagency review materials). The
docket is available for public inspection at EPA's Air Docket,
which is listed under the ADDRESSES section of this notice.
B. Executive Order (E.O.) 12866
Under E.O. 12866 (58 FR 51735, October 4, 1993), the Agency
must determine whether each regulatory action is "significant,"
and therefore subject to the Office of Management and Budget
(OMB) review and the requirements of the Order. The Order
defines "significant" regulatory action as one that is likely to
lead to a rule that may:
1. Have an annual effect on the economy of $100 million or
more, adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health
or safety, or State, local, or tribal governments or communities.
2. Create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency.
3. Materially alter the budgetary impact of entitlements,
grants, user fees, or loan program or the rights and obligation
of recipients thereof.
4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth
in E.O. 12866.
Pursuant to the terms of Executive Order 12866, OMB and EPA
consider this action related to part 70 permit revisions a
"significant regulatory action" within the meaning of the
Executive Order. The EPA has submitted this rulemaking package
to OMB for review. Changes made in response to OMB suggestions
or recommendations are documented in Docket A-93-50. Any written
comments from OMB to EPA, and any EPA responses to those
comments, are also included in Docket A-93-50.
C. Regulatory Flexibility Act Compliance
Pursuant to section 605(b) of the Regulatory Flexibility
Act, 5 U.S.C. 605(b), the Administrator certifies that the
part 70 revisions being promulgated today will not have a
significant economic impact on a substantial number of small
entities. In developing the original part 70 rule, the Agency
determined that it would not have a significant economic impact
on a substantial number of small entities. Similarly, the same
conclusion was reached in an initial regulatory flexibility
analysis performed in support of the August 1994 proposed part 70
revisions and in the analyses made in connection with updating
the ICR for the part 70 regulations.
The primary impact of these regulatory revisions is on the
process for revising permits. The total impact of today's action
is an estimated savings of around $22 million per year. This
breaks out to be an estimated $44 million reduction in burden on
permitting authorities, due to more flexible and less resource
intensive actions to revise permits, and an estimated $22 million
increased burden on sources. There will be more permit revisions
during the term of a permit due to the elimination of off-permit;
however, the burden to process those revisions are substantially
reduced resulting in the estimated $44 million savings per year.
The burden on sources will increase by the estimated $22 million
per year due to the necessity to apply for these (mostly minor
NSR) changes that would have been off-permit under the original
part 70.
Since there are around 22,000 sources in the program at this
time, the burden will be an average of $1,000 per source per
year. Most of these minor NSR changes, however, will occur at
large facilities owned by large corporations. The annual burden
on small businesses will be only a few hundred dollars per
source, and then only if they make minor NSR changes that would
have been off-permit under the original part 70. This action,
therefore, does not substantially alter the part 70 regulations
as they pertain to small entities and, accordingly, will not have
a significant economic impact on a substantial number of small
entities.
D. Paperwork Reduction Act
The OMB has approved the information collection requirements
contained in part 70 under the provisions of the Paperwork
Reduction Act, 44 U.S.C. 3501 et. seq. and has assigned OMB
control number 2060-0243. The original ICR for part 70 was
approved in July 1992. A revised ICR was prepared in 1996 and
was made available in draft form for public comment on June 13,
1996 (61 FR 30061). After closure of the public comment period,
the ICR was submitted to OMB; an announcement of this submittal
was made on August 27, 1996 (61 FR 44049). The OMB approved the
revised ICR on February 20, 1997.
The only significant impact of today's action on paperwork
burden is due to the modification of the permit revision system
in part 70. The new ICR indicates the average annual burden
attributable to permit revisions will increase by approximately
1.2 million hours over the burden estimates in the previous ICR.
This is misleading, however, because the number of permit
revisions included in the previous ICR was an average of around
2,000 per year and the new ICR estimates an annual average of
approximately 47,000 permit revisions. This difference is
because the new ICR covers the period from October 1996 to
October 1999 when programs will have moved into the permit
revision phase. The previous ICR covered a 3-year period of time
where programs were just beginning to issue permits and very few
(i.e., the 2,000 per year) permit revisions were anticipated
during that time.
To determine the true costs of today's action, it is more
appropriate to look at the burden attributable to permit
revisions assuming all initial permits have been issued. The
revised permit revision system reduces the cost to permitting
authorities by 91 per cent per permit revision and to sources by
70 per cent per permit revision. However, the total number of
permit revisions increases from approximately 20,000 to 88,000
due to elimination of the "off-permit" option previously
available. Taking into account the change in number and costs of
permit revisions, the actual burden difference between the
original part 70 and the revised part 70 is a decrease of 1.0
million burden hours for permitting authorities and an increase
of .5 million hours for sources. Therefore, it is estimated that
overall there will be a savings of approximately .5 million
burden hours. (Translated into dollars, these figures equate to
the amounts discussed in section XIII.C.)
The ICR prepared for the part 70 rule, and approved in
February 1997, is not affected by today's action because the
part 70 revisions were already included in the estimated burden
of the revised ICR. This was possible since the substance of the
revisions affecting burden (i.e., merging of programs) could
already be adopted by permitting authorities.
Send comments on the Agency's need for this information, the
accuracy of the provided burden estimates, and any suggested
methods for minimizing respondent burden, including through the
use of automated collection techniques, to:
Director, Regulatory Information Division
Office of Policy, Planning, and Evaluation (2136)
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
and:
Office of Information and Regulatory Affairs
Office of Management and Budget
Attention: Desk Officer for EPA
725 17th Street, NW
Washington, DC 20503
Include the ICR number in any correspondence.
E. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA),
P.L. 104-4, establishes requirements for Federal agencies to
assess the effects of their regulatory actions on State, local,
and tribal governments and the private sector. Under section 202
of the UMRA, EPA generally must prepare a written statement,
including a cost-benefit analysis, for proposed and final rules
with Federal mandates that may result in expenditures to State,
local, and tribal governments, in the aggregate, or to the
private sector, of $100 million or more in any 1 year.
The EPA has determined that today's revisions to part 70 do
not contain a Federal mandate that may result in expenditures of
$100 million or more for State, local, and tribal governments, in
the aggregate, or the private sector, in any 1 year. Today's
action does not amend the part 70 regulations in a way that
significantly alters the expenditures resulting from the Act
requirements. Therefore, the Agency concludes that it is not
required by section 202 of the UMRA of 1995 to provide a written
statement to accompany this regulatory action.
F. Submission to Congress and the General Accounting Office
Under section 801(a)(1)(A) of the Administrative Procedures
Act (APA) as amended by the Small Business Regulatory Enforcement
Fairness Act of 1996, EPA submitted a report containing these
part 70 revisions and other required information to the U.S.
Senate, the U.S. House of Representatives, and the Comptroller
General of the General Accounting Office prior to publication of
today's Federal Register. Today's part 70 revisions are not a
"major rule" as defined by section 804(2) of the APA as amended.
List of Subjects in 40 CFR Part 70
Environmental protection, air pollution control, prevention
of significant deterioration, new source review, fugitive
emissions, particulate matter, volatile organic compounds,
nitrogen dioxide, carbon monoxide, hydrocarbons, lead, operating
permits.
Dated: _______________ Signed: ______________________
Carol M. Browner,
Administrator
Billing Code: 6560-50-P
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