[Federal Register Volume 59, Number 189 (Friday, September 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 94-24253]


[[Page Unknown]]

[Federal Register: September 30, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[IL001; FRL-5081-9]

 

Clean Air Act Proposed Interim Approval Of Operating Permits 
Program; Illinois

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the Operating Permits 
Program submitted by Illinois for the purpose of complying with Federal 
requirements which mandate that States develop, and submit to EPA, 
programs for issuing operating permits to all major stationary sources, 
and to certain other sources.
DATES: Comments on this proposed action must be received in writing by 
October 31, 1994.

ADDRESSES: Comments should be addressed to Jennifer Drury-Buzecky at 
the Region V address.
    Copies of the State's submittal and other supporting information 
used in developing the proposed interim approval are available for 
inspection during normal business hours at the following location: EPA 
Region 5, 77 West Jackson Boulevard, AR-18J, Chicago, Illinois, 60604. 
Please contact Jennifer Drury-Buzecky at (312) 886-3194 to arrange a 
time if inspection of the submittal is desired.

FOR FURTHER INFORMATION CONTACT: Jennifer Drury-Buzecky, AR-18J, 77 
West Jackson Boulevard, Chicago, Illinois, 60604, (312) 886-3194.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    As required under title V of the Clean Air Act (``the Act'') as 
amended (1990), EPA has promulgated rules which define the minimum 
elements of an approvable State operating permits program and the 
corresponding standards and procedures by which the EPA will approve, 
oversee, and withdraw approval of State operating permits programs (see 
57 FR 32250 (July 21, 1992). These rules are codified at 40 Code of 
Federal Regulations (CFR) part 70. Title V requires States to develop, 
and submit to EPA, programs for issuing these operating permits to all 
major stationary sources and to certain other sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within 1 year after receiving the submittal. 40 CFR 
70.4(e)(2), however, allows the Administrator to extend the review 
period of a State's submittal if the State's submission is materially 
altered during the one-year review period. This additional review 
period may not extend beyond one year following receipt of the revised 
submission. EPA received material changes to Illinois' submission on 
April 18, 1994, and July 18, 1994. In addition, the State requested on 
May 16, 1994, that EPA include the State's insignificant activities 
regulations, currently undergoing rulemaking at the state level, in 
EPA's final rulemaking on the State's submittal. 35 Illinois 
Administrative Code 201 (35 IAC 201). Because these material changes 
stopped EPA's final review clock, a final EPA action on the State's 
submittal may not occur by November 15, 1994. EPA will act 
expeditiously to promulgate a final notice on the State's revised 
submission after the publication of this proposal and formal adoption 
of all State rules.
    The EPA's program review occurs pursuant to section 502 of the Act 
and the part 70 regulations, which together outline criteria for 
approval or disapproval. Where a program substantially, but not fully, 
meets the requirements of part 70, EPA may grant the program interim 
approval for a period of up to 2 years. If EPA has not fully approved a 
program by 2 years after the November 15, 1993, date, or by the end of 
an interim program, it must establish and implement a Federal program.

II. Proposed Action and Implications

A. Analysis of State Submission

    The EPA is proposing to grant interim approval to the operating 
permits program submitted by Illinois on November 15, 1993. While 
Illinois' program substantially meets the requirements of 40 CFR part 
70, certain deficiencies must be corrected in the State's submittal 
before EPA can fully approve the State's submittal. This document will 
outline the corrections necessary for full approval.
    For more detailed information on the analysis of the State's 
submission, please refer to the part 70 Operating Permits Program 
Review Checklist and technical support document accompanying this 
approval.
1. Support Materials
    A letter from Jim Edgar, Governor of the State of Illinois, to 
Administrator Carol Browner, accompanying the State's submittal, names 
the Illinois Environmental Protection Agency (IEPA) as the state agency 
responsible for the administration of Illinois' title V operating 
permit program throughout the entire state. Since the State entitles 
its title V operating permit program the ``Clean Air Act Permit Program 
(CAAPP)'', CAAPP will be used throughout this document when referencing 
the State's program.
    Also included in the State's submittal is a narrative description 
of the CAAPP summarizing how the State will meet the requirements of 40 
CFR part 70 and a legal opinion fromRoland W. Burris, Attorney General 
of the State of Illinois, certifying that the legal authority exists 
for the State to administer and enforce the title V program. According 
to the narrative and a specific request from the State referenced 
above, the State intends to develop future regulations governing 
insignificant activities. The State anticipates that these regulations 
will be finalized by the time of EPA's final action on this submittal. 
The narrative also describes the existing federally enforceable state 
operating permit program (FESOP), previously approved by EPA, that the 
State will utilize to allow sources to limit their potential to emit 
through federally enforceable operating restrictions to avoid title V 
requirements.
    The Illinois CAAPP submittal contains all the elements required by 
40 CFR 70.4(b). Although the State's submittal does not include an 
Implementation Agreement, the State and EPA will soon develop an 
implementation agreement that accounts for the implementation issues 
unique to Illinois' CAAPP.
    The majority of the State's program is found in section 39.5 of the 
Illinois Environmental Protection Act. 415 ILCS 5/39.5. Additional 
regulations are found in 35 IAC 270, 105, 106, 252, 253, and draft 
versions of both 201 and 211.
2. Regulations and Program Implementation
    a. Applicability
    The Illinois program meets the requirements of 40 CFR 70.2 and 70.3 
for applicability.
    b. Permit Applications
    The Illinois program substantially meets the requirements of 40 CFR 
70.5 for permit applications.
    One permit application issue will require a legislative amendment 
before EPA can fully approve the State's program. The current State 
legislative provision concerning source certification of applications, 
415 ILCS 5/39.5(5)(e), does not require the responsible official 
certifying a document to make a ``reasonable inquiry'' or that the 
statement be based upon ``information and belief'' according to 40 CFR 
70.5(d) and 70.6(c)(1). The State must amend this provision in its 
legislation to ensure that certifications by responsible officials 
comply with all Federal requirements, namely that the official has made 
a reasonable inquiry and that the certification is based upon 
information and belief. EPA is, therefore, proposing interim approval 
until this deficiency is corrected.
    Another potential deficiency in the State's program concerns 
insignificant activities. Illinois is currently developing regulations 
for insignificant activities in 35 IAC 201 and 211. The regulations 
propose insignificant emission limits for hazardous air pollutants 
(HAP), specific categories of insignificant activities or emission 
levels of all regulated pollutants, and provisions to allow sources to 
propose their own insignificant activities.
    Insignificant activity thresholds which are considered to be 
acceptable by EPA for Illinois' program would fall in the range of 1-2 
tons per year for criteria pollutants and the de minimis levels 
established under 112(g) or lower for HAPs. These insignificance levels 
are appropriate for the State's program because of the 25 ton per year 
major source threshold level established in the State's severe ozone 
nonattainment areas, and because of the overall major source threshold 
level for HAPs established at 10 tons per year of one HAP and 25 tons 
per year of any combination of HAPs. Illinois' insignificant activity 
regulations establish insignificance levels of no more than 1 lb/hr of 
any non-HAP (approximately 4 tons per year) and no more than .1 lb/hr 
of any HAP (approximately .4 tons per year) per emission unit. Because 
Illinois' insignificant activity regulations fail to comply with EPA's 
notion of acceptable thresholds, EPA could only propose interim 
approval for the State's 201 and 211 regulations. If EPA's concerns are 
addressed in the State's final regulations before final action on this 
notice, then EPA can fully approve the State's insignificant 
activities. Alternatively, if the State does not address EPA's concerns 
before final action on this notice, then EPA's final action will 
include an interim approval on this issue.
    c. Permit Issuance, Renewal, Reopenings and Revisions
    The Illinois program meets the requirements of 40 CFR 70.7(h) for 
public participation and 40 CFR 70.7(e)(2) minor modifications. Two 
interim approval issues exist, however, with respect to the State's 
definition of administrative permit amendment. 415 ILCS 5/
39.5(13)(c)(vi) allows incorporation of revised limitations or other 
requirements resulting from the application of an approved economic 
incentives rule, a marketable permits rule or generic emissions trading 
rule into a CAAPP permit through the administrative amendment 
procedure. Since 40 CFR 70.7(d) does not allow the use of an 
administrative permit amendment to accomplish incorporation of 
emissions trades into a part 70 permit, the State's definition of 
administrative amendment is one basis for the EPA's proposal to grant 
interim approval of the State's program. The State must amend its 
legislation to require the use of the significant modification 
procedure to incorporate emission trades into a CAAPP permit before the 
EPA can fully approve the State's definition of administrative 
amendment.
    The second interim approval issue is found in 415 ILCS 5/
39.5(13)(c)(v). The State's program allows incorporation of 
requirements from preconstruction review permits authorized under an 
EPA-approved preconstruction permit program into a CAAPP permit through 
the administrative amendment procedure, provided that the permit meets 
procedural and compliance requirements substantially equivalent to 
those in the State's CAAPP permit issuance process (emphasis added). 
The EPA encourages the use of the administrative amendment procedure to 
incorporate preconstruction review permits into part 70 permits. 
Nevertheless, 40 CFR 70.7(d)(1)(v) allows such incorporation only when 
the State's preconstruction review program meets procedural and 
compliance requirements substantially equivalent to the requirements of 
40 CFR 70.7 and 70.8 that would be applicable to the change if it were 
subject to review as a permit modification, and compliance requirements 
substantially equivalent to those contained in 40 CFR 70.6. The EPA 
interprets 40 CFR part 70 to require that the State's part 70 
regulations or preconstruction permit program detail the actual 
procedural and compliance requirements necessary to incorporate 
preconstruction permits into part 70 permits.
    For full approval of the State's program, the State would need to 
develop regulations detailing the actual procedural and compliance 
requirements necessary for incorporation of preconstruction permits 
into part 70 permits. These regulations would need to supplement the 
State's title V submittal or be submitted as a revision to the State's 
preconstruction permit program state implementation plan.
    d. Permit Content
    Another major component of the State's program concerns the 
contents of a CAAPP permit. The State's CAAPP substantially meets the 
requirements of 40 CFR 70.6, including the requirements for operational 
flexibility. A CAAPP permit will incorporate applicable requirements of 
existing State Implementation Plans (SIP), as well as any future 
applicable requirements promulgated by EPA. Legislative authority 
exists in 415 ILCS 5/39.5(11) to develop general permits covering 
numerous similar sources, except for sources subject to the Acid Rain 
Program. These general permits are targeted for future development.
    One issue of EPA concern with State programs is the ability of a 
part 70 source to obtain a waiver from any applicable requirement. The 
Illinois Pollution Control Board (IPCB) has the authority to issue a 
variance from requirements imposed by State law. 415 ILCS 5/35-38, 
previously approved into the State's SIP for non-part 70 sources, 
allows the IPCB discretion to grant relief from compliance with State 
rules and regulations. The EPA regards this provision as wholly 
external to the program submitted for approval under part 70, and 
consequently is proposing to take no action on this provision of State 
law. The EPA has no authority to approve provisions of State law, such 
as the variance provisions referred to, which are inconsistent with the 
CAA. The EPA does not recognize the ability of a permitting authority 
or other state entity to grant relief from the duty to comply with the 
terms of a federally enforceable part 70 permit, except where such 
relief is granted through procedures allowed by part 70. For example, 
40 CFR 70.6(g) defines the circumstances under which an affirmative 
defense can be raised when an action is brought against a source for 
noncompliance with a permit condition. The EPA reserves the right to 
enforce the terms of the part 70 permit where the permitting authority 
or other state entity purports to grant relief from the duty to comply 
with a part 70 permit in a manner inconsistent with part 70 procedures.
    415 ILCS 5/39.5(5)(s) and 35 IAC 270.408 of the State's submittal 
incorporate previously approved SIP provisions into the CAAPP program 
(35 IAC 201.261 through 201.265) which allow an owner or operator of a 
CAAPP source to include within its CAAPP application a request for 
permission to operate during a startup, malfunction, or breakdown. 
These provisions appear to allow sources to exceed emission limits and 
standards of the State's SIP, but are not applicable to any other 
requirements of a title V permit. Since sources that request these 
exceedances must request them in their CAAPP applications, EPA will 
have the opportunity to review and comment on these different emission 
limits just as it would comment on any other permit provision. Since 
these provisions were previously approved into Illinois' SIP, the 
incorporation of these provisions into Illinois' part 70 regulations is 
not problematic for the approval of the State's program as long as 
these provisions never apply to other Federal requirements in a title V 
permit and do not diminish the State's authority to assure the source's 
compliance with all applicable requirements.
    Another component of permit content is the length of time in which 
a source must notify the permitting authority to report a deviation 
from a permit condition. Part 70 of the operating permits regulations 
requires prompt reporting of deviations from the permit requirements. 
40 CFR 70.6(a)(3)(iii)(B) requires the permitting authority to define 
prompt in relation to the degree and type of deviation likely to occur 
and the applicable requirements. Although the permit program 
regulations should define prompt for purposes of administrative 
efficiency and clarity, an acceptable alternative is to define prompt 
in each individual permit. The EPA believes that prompt should 
generally be defined as requiring reporting within two to ten days of 
the deviation. Two to ten days is sufficient time in most cases to 
protect public health and safety as well as to provide a forewarning of 
potential problems. For sources with a low level of excess emissions, a 
longer time period may be acceptable. Prompt reporting, however, must 
be more frequent than the semiannual reporting requirement, given this 
is a distinct reporting obligation under 40 CFR 70.6(a)(3)(iii)(A). 
Illinois addresses the issue of prompt reporting in 415 ILCS 5/
39.5(7)(f)(ii) of its CAAPP legislation. Because Illinois did not 
actually define ``prompt,'' EPA may veto permits that do not contain 
sufficiently prompt reporting requirements for deviations.
    e. Enforcement
    The Illinois program substantially meets the requirements of 40 CFR 
70.11 with regard to enforcement authority. One issue, however, 
requires a change in existing State legislation to bring the State's 
enforcement authority completely in accord with the requirements of 
part 70. 415 ILCS 5/44(j)(4)(D) of the Illinois Environmental 
Protection Act prohibits the knowing tampering of any monitoring device 
or record. 40 CFR 70.11(a)(3)(iii), however, prohibits the knowing 
tampering of any monitoring device or method. The State must amend its 
legislative provision to include a prohibition against knowing 
tampering of a monitoring method. The EPA, therefore, proposes interim 
approval of the State's program.
    Another issue concerning title V enforcement authority is the 
ability of a source to request an alternative emission limit equivalent 
to that stated in a SIP. 415 ILCS 5/39.5(7)(q) allows a source to 
demonstrate in its CAAPP application that an alternative emission limit 
would be equivalent to that contained in the applicable IPCB 
regulations. The State submitted revised regulations that restricted 
the use of alternative emission limits in 35 IAC 270.401(e) to the 
situation where the applicable EPA-approved SIP allows for such 
determination. Since this revision to the State regulations adequately 
addresses EPA's concerns regarding the use of alternative equivalent 
emission limits, the State may utilize equivalent alternative emission 
limits in its CAAPP when the underlying SIP provision allows for such 
determination.
3. Permit Fee Demonstration
    415 ILCS 5/39.5(18) of the State's legislation provides for the 
collection of fees in the amount of $13.50 per ton of allowable 
emissions. Sources allowed to emit less than 100 tons per year in the 
aggregate of all regulated air pollutants shall pay a flat fee of $1000 
and no source shall be required to pay a fee in excess of $100,000. 
Since the State is not charging the presumptive minimum, 40 CFR 70.9 
requires that the State collect fees sufficient to cover the permit 
program costs. Based upon the State's fee demonstration, EPA believes 
that the amount of fee revenue collected by the State is sufficient to 
run the State's program. Collection of fees based upon allowable 
emissions results in the collection of fees from tons of pollution not 
actually emitted. Monies collected from the program will be deposited 
in a special fund in the State Treasury known as the CAA Permit Fund 
and a board appointed by the State legislature will evaluate the 
State's fee structure to ensure that future collection of funds will be 
sufficient to run the program.
    On July 18, 1994, the State submitted additional information 
clarifying its detailed fee demonstration. As a result of this 
additional information, the EPA believes the State's detailed fee 
demonstration meets the requirements of 40 CFR part 70. Please refer to 
the technical support document and letter dated June 21, 1994, from 
IEPA, included with the docket on this approval, for more information 
regarding the State's fee demonstration.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority and/or Commitments for Section 112 Implementation
    Illinois has demonstrated in its title V program submittal adequate 
legal authority to implement and enforce all section 112 requirements 
through the title V permit. This legal authority is contained in 
Illinois' enabling legislation and in regulatory provisions defining 
``applicable requirements'' and stating that the permit must 
incorporate all applicable requirements. EPA has determined that this 
legal authority is sufficient to allow Illinois to issue permits that 
assure compliance with all section 112 requirements.
    The EPA is interpreting the above legal authority to mean that 
Illinois is able to carry out all section 112 activities. For further 
rationale on this interpretation, please refer to the Technical Support 
Document accompanying this rulemaking and the April 13, 1993, guidance 
memorandum titled ``Title V Program Approval Criteria for section 112 
activities,'' signed by John Seitz.
    b. Implementation of 112(g) Upon Program Approval
    As a condition of approval of the part 70 program, Illinois is 
required to implement section 112(g) of the Act from the date of 
approval of the part 70 program. Imposition of case-by-case 
determinations of MACT or offsets under section 112(g) will require the 
use of a mechanism for establishing federally enforceable restrictions 
on a source-specific basis. The EPA is proposing to approve Illinois' 
preconstruction permitting program, found in 35 IAC 201-203, under the 
authority of title V and part 70 solely for the purpose of implementing 
section 112(g) during the transition period between title V approval 
and adoption of a State rule implementing EPA's section 112(g) 
regulations. EPA believes this approval is necessary so that Illinois 
has a mechanism in place to establish federally enforceable 
restrictions for section 112(g) purposes from the date of part 70 
approval. Although section 112(l) generally provides authority for 
approval of State air toxics programs, title V and section 112(g) 
provide authority for this limited approval because of the direct 
linkage between implementation of section 112(g) and title V. The scope 
of this approval is narrowly limited to section 112(g) and does not 
confer or imply approval for purposes of section 110 or any other 
provision under the Act. If Illinois does not wish to implement section 
112(g) through its preconstruction permit program and can demonstrate 
that an alternative means of implementing section 112(g) exists, the 
EPA may, in the final action approving Illinois' part 70 program, 
approve the alternative instead.
    This proposed approval is for an interim period only, until such 
time as the State receives delegation of the section 112(g) rules. 
Accordingly, EPA is proposing to limit the duration of this approval to 
a reasonable time following promulgation of section 112(g) regulations 
so that Illinois, acting expeditiously, will be able to adopt rules 
consistent with the section 112(g) regulations.
    Once EPA promulgates the section 112(g) rules, implementation of 
title V requires that Illinois adopt these rules within a reasonable 
period of time. EPA considers final adoption by the State 12 months 
after EPA promulgation a reasonable period of time. Once the State 
adopts the section 112(g) rules, the State will issue permits in 
accordance with the section 112(g) rules.
    c. Program for Delegation of Section 112 Standards as Promulgated
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
section 112(l)(5) approval requirements for approval of a program for 
delegation of section 112 standards as promulgated by EPA as they apply 
to part 70 sources. Section 112(l)(5) requires that the State's program 
contain adequate authorities, adequate resources for implementation, 
and an expeditious compliance schedule, which are also requirements 
under part 70.Therefore, the EPA is also proposing to grant approval 
under section 112(l)(5) and 40 CFR 63.91 of Illinois' program for 
receiving delegation of section 112 standards that are unchanged from 
the Federal standards as promulgated. Because the State of Illinois has 
historically accepted automatic delegation of section 112 standards and 
requirements, EPA proposes to approve the delegation of section 112 
standards and requirements through automatic delegation. Therefore, 
once EPA promulgates a section 112 standard, the State of Illinois will 
automatically assume responsibility for collection and receipt of any 
information required by the standard, as well as any further activities 
agreed to by IEPA and EPA. The details of this delegation mechanism 
will be set forth in a Memorandum of Agreement between Illinois and EPA 
expected to be completed prior to approval of Illinois' section 112(l) 
program for straight delegations. This program applies to both existing 
and future standards, but is limited to sources covered by the part 70 
program.
    The EPA is proposing approval under section 112(l) of the Clean Air 
Act (CAA) of Illinois' state operating permits program for the purposes 
of creating federally enforceable limitations on the potential to emit 
of Hazardous Air Pollutants (HAPs) regulated under section 112 of the 
CAA. The EPA is approving this program as meeting the criteria 
articulated in the June 28, 1989, Federal Register notice for State 
operating permit programs to establish limits federally enforceable on 
potential to emit.
    The June 28, 1989, notice provided that EPA would approve a state 
operating permit program into a SIP for the purpose of establishing 
federally enforceable limits on a source's potential to emit if the 
program met five specific requirements. This notice, because it was 
written prior to the 1990 amendments to section 112, addressed only SIP 
programs to control criteria pollutants. Federally enforceable limits 
on criteria pollutants (i.e., VOC's or PM-10) may have the incidental 
effect of limiting certain HAPs listed pursuant to section 112(b). This 
situation would occur when a pollutant classified as a HAP is also 
classified as a criteria pollutant.1 As a legal matter, no 
additional program approval by EPA is required in order for these 
criteria pollutant limits to be recognized for this purpose.
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    \1\The EPA intends to issue guidance addressing the technical 
aspects of how these criteria pollutant limits may be recognized for 
purposes of limiting a source's potential to emit of HAP to below 
section 112 major source levels.
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    EPA has determined that the five approval criteria for approving 
FESOP programs into the SIP, as specified in the June 28, 1989, Federal 
Register notice, are also appropriate for evaluating and approving the 
programs under section 112(l). The June 28, 1989, notice does not 
address HAP because it was written prior to the 1990 amendments to 
section 112 and not because it establishes requirements unique to 
criteria pollutants. Hence, the following five criteria are applicable 
to state operating permit program approvals under section 112(l): (1) 
The program must be submitted to and approved by EPA; (2) The program 
must impose a legal obligation on the operating permit holders to 
comply with the terms and conditions of the permit and that permits 
which do not conform to either the operating permit program 
requirements, the requirements of EPA's underlying regulations or the 
June 28, 1989, criteria may be deemed ``not federally enforceable'' by 
EPA; (3) The program must contain terms and conditions that are at 
least as stringent as any requirements contained in the SIP or 
enforceable under the SIP or any section 112 or other Clean Air Act 
standard or requirement; (4) Permits issued under the program must 
contain conditions that are permanent, quantifiable, and enforceable as 
a practical matter; and (5) Permits issued under the program must be 
subject to participation, including at a minimum advance notice of the 
permit in the form of a 30-day public comment period.
    In addition to meeting the criteria in the June 28, 1989, notice, a 
state operating permit program must meet the statutory criteria for 
approval under section 112(l)(5). Section 112(l) allows EPA to approve 
a program only if it: (1) Contains adequate authority to assure 
compliance with any section 112 standards or requirements; (2) provides 
for adequate resources; (3) provides for an expeditious schedule for 
assuring compliance with section 112 requirements; and (4) is otherwise 
likely to satisfy the objectives of the Act.
    The EPA plans to codify the approval criteria for programs limiting 
potential to emit of HAP in Subpart E of part 63, the regulations 
promulgated to implement section 112(l) of the Act. The EPA currently 
anticipates that these criteria, as they apply to state operating 
permit programs, will mirror those set forth in the June 28, 1989, 
notice, with the addition that the State's authority must extend to HAP 
instead of or in addition to VOC's and PM-10. The EPA currently 
anticipates that state operating permit programs that are approved 
pursuant to section 112(l) prior to the subpart E revisions will have 
had to meet these criteria, and hence, will not be subject to any 
further approval action.
    The EPA believes it has authority under section 112(l) to approve 
programs to limit potential to emit of HAPs directly under section 
112(l) prior to this revision to subpart E. Section 112(l)(5) requires 
EPA to disapprove program that are inconsistent with guidance required 
to be issued under section 112(l)(2). This might be read to suggest 
that the ``guidance'' referred to in section 112(l)(2) was intended to 
be a binding rule. Even under this interpretation, the EPA does not 
believe that section 112(l) requires this rulemaking to be 
comprehensive. That is, it need not address all instances of approval 
under section 112(l). The EPA has already issued regulations under 
section 112(l) that would satisfy this requirement. Given the severe 
timing problems posed by impending deadlines set forth in MACT 
standards and for submittal of title V applications, EPA believes it is 
reasonable to read section 112(l) to allow for approval of programs to 
limit potential to emit prior to issuance of a rule specifically 
addressing this issue. Accordingly, EPA is proposing approval of 
Illinois' program now so as to enable Illinois to begin issuing 
federally enforceable permits as soon as possible.
    EPA proposes the approval of Illinois' federally enforceable state 
operating permit program (FESOP) program for the purpose of limiting 
potential to emit of HAP. The Illinois FESOP program was previously 
approved for the purpose of limiting potential to emit of criteria 
pollutants on December 17, 1992. 57 FR 59928. In that notice, EPA 
stated that the Illinois state operating permit program met the five 
criteria required for Federal approvability under the June, 1989, 
register notice. See 57 FR 59930-59931. Illinois' FESOP program: (1) 
Was submitted to and approved by EPA into the SIP; (2) provides that 
all sources are under a legal obligation to adhere to the terms and 
limitations of such permits and that permits which do not conform to 
the operating permit program requirements and the requirements of EPA's 
underlying regulations may be deemed ``not federally enforceable'' by 
EPA; (3) provides that the Illinois Environmental Protection Agency 
(IEPA) and Illinois Pollution Control Board must act in a manner 
consistent with all pertinent Federal statutes and regulations 
including the SIP; (4) ensures that all permit conditions are 
permanent, quantifiable and enforceable as a practical matter; and (5) 
ensures that all FESOP permits are issued subject to public 
participation, including advance notification in the form of at least a 
30-day public comment period. By approving the Illinois FESOP program, 
EPA recognized the Illinois FESOP program as a federally enforceable 
method of limiting potential to emit of criteria pollutants. 415 ILCS 
5/9.1(d)(2) provides the statutory authority for the State to include 
the requirements of section 111 and 112 of the Act, including any 
regulations promulgated thereunder, into state permits.
    Regarding the statutory criteria under section 112(l), the EPA 
believes that Illinois' FESOP program contains authority to assure 
compliance with section 112 requirements since the third criteria of 
the June 28, 1989 notice is met, that is, since the program does not 
provide for waiving any section 112 requirement. Sources would still be 
required to meet section 112 requirements applicable to non-major 
sources. Regarding adequate resources, Illinois has included in its 
request for approval under section 112(l) a commitment to provide 
adequate resources to implement and enforce the program. This request 
is contained in a September 14, 1994, letter from Bharat Mathur, Chief 
of the Bureau of Air, IEPA, to Stephen Rothblatt, Chief, Regulation 
Development Branch, EPA Region 5. Fees will be collected from FESOP 
sources through both the title V and FESOP process. Sources that apply 
for FESOPs through the title V process will pay a fee of $1000. Sources 
applying through the FESOP program will be charged a fee based upon 
actual emissions. Since the processing of a FESOP permit consumes 
considerably less resources than the processing of a title V permit, 
the State believes that sufficient resources will be available to 
administer FESOP permits for those who request and qualify. The EPA 
believes this mechanism will be sufficient to provide for adequate 
resources to implement this program, and will monitor the State's 
implementation of the program to assure that adequate resources 
continue to be available.
    Illinois' FESOP program also meets the requirement for an 
expeditious schedule for assuring compliance. A source seeking a 
voluntary limit on potential to emit is probably doing so to avoid a 
Federal requirement applicable on a particular date. Nothing in this 
program would allow a source to avoid or delay compliance with the 
Federal requirement if it fails to obtain the appropriate federally 
enforceable limit by the relevant deadline. Finally, Illinois' FESOP 
program is consistent with the objectives of the section 112 program 
since its purpose is to enable sources to obtain federally enforceable 
limits on potential to emit to avoid major source classification under 
section 112. The EPA believes this purpose is consistent with the 
overall intent of section 112.
    The EPA recognizes that state operating permits may already exist 
that contain restrictions on the potential to emit of HAPs. As long as 
the State issued these permits in accordance with all State regulations 
and the criteria discussed above, EPA will consider these permits to be 
federally enforceable upon promulgation of this action.
    d. Title IV
    Illinois' program contains adequate authority to issue permits 
which reflect the requirements of title IV and its implementing 
regulations. Illinois' submittal letter contains a commitment to revise 
its regulations as necessary to accommodate Federal revisions and 
additions to title IV and the Acid Rain regulations once they are 
promulgated.

B. Options for Approval/Disapproval and Implications

    The EPA is proposing to grant interim approval to the operating 
permits program submitted by Illinois on November 15, 1993. If this 
approval is promulgated, the State must make the following changes to 
receive full approval: (1) The State must amend 415 ILCS 5/39.5(5)(e) 
to ensure that certifications by responsible officials comply with all 
Federal requirements, namely that the official has made a reasonable 
inquiry and that the certification is based upon information and 
belief; (2) the State must amend 415 ILCS 5/39.5(13)(c)(vi) to require 
the use of the significant modification procedure to incorporate 
emission trades into a CAAPP permit; (3) for full approval of the 
State's program, the State must develop regulations detailing the 
actual procedural and compliance requirements necessary for 
incorporation of preconstruction permits into part 70 permits as a 
supplement to the State's title V submittal or submitted as a revision 
to the State's preconstruction permit program state implementation 
plan; (4) the State must amend 415 ILCS 5/44(j)(4)(D) to include a 
prohibition against knowing tampering of a monitoring method; and (5) 
the State must correct all deficiencies in its insignificant activities 
regulations currently under development. If finalized insignificant 
activities rules address EPA's concerns and these rules are submitted 
prior to final action on this notice, then EPA can grant full approval 
of these rules. If EPA's concerns are not addressed prior to final 
action, then the State's insignificant activities rules will receive 
interim approval.
    Illinois' program is not fully approvable because of the 
deficiencies mentioned above. The program, however, substantially meets 
the requirements of part 70 because Illinois' CAAPP complies with all 
other part 70 requirements. This interim approval, which may not be 
renewed, extends for a period of up to 2 years. Because the interim 
approval automatically expires two years after promulgation of a final 
interim approval, the State may submit its interim corrections at any 
time, however, the State may not submit its corrections any later than 
18 months after promulgation of final interim approval. The EPA will 
then have six months to promulgate a final action.
    During the interim approval period, the State is protected from 
sanctions for failure to have a program, and EPA is not obligated to 
promulgate a Federal permits program in the State. Permits issued under 
a program with interim approval have full standing with respect to part 
70, and the 1-year time period for submittal of permit applications by 
subject sources begins upon interim approval, as does the 3-year time 
period for processing the initial permit applications.
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
section 112(l)(5) requirements for approval of a program for delegation 
of section 112 standards as promulgated by EPA as they apply to part 70 
sources. Section 112(l)(5) requires that the State's program contain 
adequate authorities, adequate resources for implementation, and an 
expeditious compliance schedule, which are also requirements under part 
70. Therefore, the EPA is also proposing to grant approval under 
section 112(l)(5) and 40 CFR 63.91 of the State's program for receiving 
delegation of section 112 standards that are unchanged from Federal 
standards as promulgated. This program for delegations only applies to 
sources covered by the part 70 program.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of the State's submittal and other information 
relied upon for the proposed interim approval are contained in a docket 
maintained at the EPA Regional Office. The docket is an organized and 
complete file of all the information submitted to, or otherwise 
considered by, EPA in the development of this proposed rulemaking. The 
principal purposes of the docket are:

    (1) To allow interested parties a means to identify and locate 
documents so that they can effectively participate in the rulemaking 
process; and
    (2) To serve as the record in case of judicial review. The EPA will 
consider any comments received by October 31, 1994.

B. Executive Order 12866

    The Office of Management and Budget (OMB) has exempted this action 
from Executive Order 12866 review.

C. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysisassessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    Operating permit program approvals under section 502 of the Act do 
not create any new requirements, but simply approve requirements that 
the State is already imposing. Therefore, because the Federal operating 
permit program approval does not impose any new requirements, I certify 
that it does not have a significant impact on any small entities 
affected. Moreover, due to the nature of the Federal-state relationship 
under the Act, preparation of a regulatory flexibility analysis would 
constitute Federal inquiry into the economic reasonableness of State 
action. The Act forbids EPA to base its actions concerning operating 
permit programs on such grounds. Union Electric Co. v. U.S. E.P.A., 427 
U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C. 7410(a)(2).

List of Subjects in 40 CFR Part 70

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Intergovernmental relations, Operating permits, 
Reporting and recordkeeping requirements.

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

    Dated: September 21, 1994.
David A. Ullrich,
Acting Regional Administrator.
[FR Doc. 94-24253 Filed 9-29-94; 8:45 am]
BILLING CODE 6560-50-F