[Federal Register Volume 59, Number 201 (Wednesday, October 19, 1994)]
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From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 94-25866]


[[Page Unknown]]

[Federal Register: October 19, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[WI001; FRL-5093-8]

 

Proposed Interim Approval of the Operating Permits Program; 
Wisconsin

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the Operating Permits 
Program submitted by the State of Wisconsin 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, with the exception of 
sources on Indian lands.
DATES: Comments on this proposed action must be received in writing by 
November 18, 1994.

ADDRESSES: Written comments should be addressed to: Carlton Nash, 
Chief, Regulation Development Section (AT-18J), EPA, 77 W. Jackson 
Boulevard, Chicago, Illinois 60604.
    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, Air and Radiation Division (AT-18J), 77 West Jackson 
Boulevard, Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Beth Valenziano, Permits and Grants 
Section (AT-18J), EPA, 77 W. Jackson Boulevard, Chicago, Illinois 
60604, (312) 886-2703.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the Clean Air Act (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 EPA will approve, oversee, and 
withdraw approval of State operating permits programs. See 57 FR 32250 
(July 21, 1992). These rules are codified at title 40 of the Code of 
Federal Regulations (CFR) part 70. Title V requires States to develop, 
and submit to EPA, programs for issuing operating permits to all major 
stationary sources and to certain other sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within 1 year after receiving the submittal. The EPA's 
program review occurs pursuant to section 502 of the Act and the part 
70 regulations, which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, EPA may grant the program interim approval for 
a period of up to 2 years. If EPA has not fully approved a program by 2 
years after the November 15, 1993 date, or by the end of an interim 
program, it must establish and implement a Federal program.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials
    The Governor of Wisconsin submitted Wisconsin's title V Operating 
Permits Program on January 27, 1994. The EPA deemed the submittal 
complete in a letter to the Governor dated March 24, 1994. The 
submittal contained all required elements of 40 CFR 70.4, including a 
description of Wisconsin's operating permits program, permitting 
program documentation, and the Attorney General's legal opinion that 
the laws of the State of Wisconsin provide adequate authority to carry 
out all aspects of the program required by the Act.
    The Governor's letter to EPA states that Wisconsin's operating 
permits program will cover all geographical areas of Wisconsin, except 
for activities conducted by Indians on Indian reservation lands. Except 
for a brief reiteration of this statement in the program description, 
there is no further discussion in the submittal of any basis under 
which the Wisconsin Department of Natural Resources (WDNR) might assert 
jurisdiction over sources on tribal lands.
    Because WDNR has not demonstrated, consistent with applicable 
principles of Indian law and Federal Indian policies, legal authority 
to regulate sources on tribal lands, the proposed interim approval of 
Wisconsin's operating permits program will not extend to lands within 
the exterior boundaries of any Indian reservation in the State of 
Wisconsin.1 Title V sources located within the exterior boundaries 
of Indian reservations in Wisconsin will be subject to either the 
Federal operating permits program, to be promulgated at 40 CFR part 71, 
or to a tribal operating permits program approved pursuant to title V 
and the regulations that will be promulgated under section 301(d) of 
the Act. The section 301(d) regulations will authorize EPA to treat 
tribes in the same manner as States for appropriate Act 
provisions.2
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    \1\This is not a determination that WDNR could not possibly 
demonstrate jurisdiction over sources within the exterior boundaries 
of Indian reservations in Wisconsin. However, no such showing has 
been made.
    \2\Tribes may also have inherent sovereign authority to regulate 
air pollutants from sources on tribal lands.
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2. Regulations and Program Implementation
    Wisconsin's operating permits program, including the operating 
permits program regulations (Chapters Natural Resources (NR) 400, 406, 
407, 409, 410, 436, 438, 439, 484, 490, and 494, Wisconsin 
Administrative Code) substantially meet the requirements of 40 CFR part 
70, including: Sec. Sec. 70.2 and 70.3 with respect to applicability; 
Sec. 70.5 with respect to application forms, completeness requirements, 
and criteria for defining insignificant activities; Sec. Sec. 70.4, 
70.5, and 70.6 with respect to permit content (including operational 
flexibility); Sec. Sec. 70.7 and 70.8 with respect to permit processing 
requirements (including minor permit modifications and public 
participation); and Sec. 70.11 with respect to enforcement authority.
    There are two references in Wisconsin's regulations which 
incorrectly cite the program's compliance certification requirements. 
The reference in section NR 407.09(4)(a)3.c., Wisconsin Administrative 
Code (s.NR 407.09(4)(a)3.c., Wis. Adm. Code) to s.NR 439.03(7) is 
incorrect. The correct reference is s.NR 439.03(8). The reference in 
s.NR 439.03(1)(c), Wis. Adm. Code, to s.NR 439.03(7) is incorrect. The 
correct reference is s.NR 439.03(8). WDNR is aware of these incorrect 
citations and is planning to correct them.
    For a detailed analysis of Wisconsin's program submittal, please 
refer to the Technical Support Document (TSD) for this proposed action, 
which is available in the docket at the address noted above. The TSD 
shows that all operating permits program requirements of title V of the 
Act, 40 CFR part 70, and relevant guidance were met by Wisconsin's 
submittal, with the exception of those requirements described in 
subpart II.B. below.
3. Permit Fee Demonstration
    Wisconsin's operating permits program fee schedule is established 
in section 144.399, Wisconsin Statutes (s. 144.399, Wis. Stats.), and 
in Chapters NR 410 and 438, Wis. Adm. Code. Wisconsin's fee schedule is 
based on the presumptive minimum program cost established in 40 CFR 
70.9, and exceeds the presumptive minimum because the State charges 
fees for more pollutants than those included in the 40 CFR 70.2 
definition of ``regulated pollutant (for presumptive fee 
calculation)''. In fiscal year 1995, WDNR estimates the dollar per ton 
fee to be $30.18 (assuming a 3% increase in the Consumer Price Index). 
Using the presumptive minimum model, the presumptive cost of the 
program in fiscal year 1995 is $8,201,717. WDNR's estimated fees for 
fiscal year 1995 is $8,435,612.
    The EPA's approval of Wisconsin's fee schedule does not extend to 
fees collected pursuant to s.144.399(2)(am), Wis. Stats. and s.NR 
410.04(4), Wis. Adm. Code. These provisions allow WDNR to collect 
emissions fees from utilities with affected units under section 404 of 
the Act during the years 1995 through 1999. 40 CFR 70.9(b)(4) provides 
that, for 1995 through 1999, no fee for purposes of title V shall be 
required to be paid with respect to emissions from any affected unit 
under section 404 of the Act.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority for Section 112 Implementation
    Wisconsin has demonstrated in its title V program submittal 
adequate legal authority to implement and enforce all section 112 
toxics requirements through the title V permit. This legal authority is 
contained in Wisconsin's enabling legislation and in regulatory 
provisions that define ``applicable requirements'' and provide that the 
permit must incorporate all applicable requirements. The EPA has 
determined that this legal authority is sufficient to allow Wisconsin 
to issue permits to part 70 sources that assure compliance with all 
section 112 requirements.
    EPA is interpreting the above legal authority to mean that 
Wisconsin is able to carry out all section 112 activities for part 70 
sources. For further rationale on this interpretation, please refer to 
the TSD for this proposed action.
    b. Implementation of Section 112(g) Upon Program Approval
    As a condition of approval of the part 70 program, Wisconsin is 
required to implement section 112(g) of the Act from the effective date 
of the part 70 program. Imposition of case-by-case determinations of 
Maximum Achievable Control Technology 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 Wisconsin's preconstruction permitting program 
found in Chapters 406 and 408, Wis. Adm. Code, 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. 
The EPA believes this approval is necessary so that Wisconsin 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 
programs to implement section 112(g), title V and section 112(g) 
provide authority for this limited approval because of the direct 
linkage between the implementation of section 112(g) and title V. The 
scope of this approval is narrowly limited to section 112(g) and does 
not confer or imply approval for purposes of any other provision under 
the Act, for example, section 110. If Wisconsin 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, EPA may, in the final action on Wisconsin's part 70 
program, approve the alternative instead.
    This approval is for an interim period only, until such time as the 
State adopts regulations consistent with any regulations promulgated by 
EPA to implement section 112(g). Accordingly, EPA is proposing to limit 
the duration of this approval to a reasonable time following 
promulgation of section 112(g) regulations so that Wisconsin, acting 
expeditiously, will be able to adopt regulations consistent with the 
section 112(g) regulations. The EPA is proposing here to limit the 
duration of this approval to 18 months following promulgation by EPA of 
section 112(g) regulations. Comment is solicited on whether 18 months 
is an appropriate period, considering Wisconsin's procedures for 
adoption of regulations.
    c. Program for Straight Delegation of Section 112 Standards
    Requirements for operating permits program approval, specified in 
40 CFR 70.4(b), also address section 112(l)(5) requirements for 
approval of a program for delegation of section 112 standards as 
promulgated by EPA as they apply to part 70 sources. Section 112(l)(5) 
requires that the State's program contain adequate authorities, 
adequate resources for implementation, and an expeditious compliance 
schedule, which are also requirements under part 70.
    Therefore, EPA is also proposing to grant approval under section 
112(l)(5) and 40 CFR 63.91 of Wisconsin's program for receiving 
delegation of section 112 standards that are unchanged from the Federal 
standards as promulgated. Because Wisconsin has the authority under 
s.144.394(12), Wis. Stats., to include any conditions in an operating 
permit that are applicable to a source under the Act (including section 
112 requirements), EPA proposes to approve the delegation of section 
112 standards through automatic delegation. The details of this 
delegation mechanism will be set forth in a Memorandum of Agreement 
between Wisconsin and EPA. This program applies to both existing and 
future standards, but is limited to sources covered by the part 70 
program.
    d. Implementation of Title IV
    Wisconsin's operating permits program contains adequate authority 
to issue permits which include the requirements of the title IV Acid 
Rain Program. The WDNR also committed in the program submittal to 
adopting and submitting to EPA by January 1, 1995, a program 
implementing the Acid Rain Program.

B. Options for Approval/Disapproval and Implications

    The EPA is proposing to grant interim approval to the title V 
operating permits program submitted by the State of Wisconsin on 
January 27, 1994. This interim approval of Wisconsin's operating 
permits program applies to all title V sources, with the exception of 
sources on Indian lands and source categories described in the source 
category limited interim approval below (following B.8.). Non-major 
stationary sources that may be required to obtain a title V operating 
permit are currently exempted from the program under 40 CFR 70.3. 
Wisconsin's operating permits program for non-title V sources has been 
submitted as a revision to Wisconsin's State Implementation Plan and is 
currently under EPA review.
    If interim approval of Wisconsin's title V operating permits 
program is promulgated, the State must make the following changes to 
receive full approval:

    1. Revise Wisconsin's operating permit program regulations to 
provide for criminal fines against any person who knowingly makes any 
false material statement, representation, or certification in a permit 
application. This provision is required by 40 CFR 70.11(a)(3)(iii). The 
June 21, 1993, memorandum included in the Attorney General's opinion 
states that s.144.426(2)(a), Wis. Stats., does not penalize a person 
who knowingly submits false information because the statutes do not 
require the submittal of accurate information to obtain a permit. 
However, the memorandum further explains that WDNR has the authority to 
promulgate a rule requiring the submittal of accurate information. 
Section NR 439.03(11), Wis. Adm. Code, provides that all reports 
required by an operating permit shall be truthful. However, there is no 
regulatory provision which requires the application submittal itself to 
be truthful.
    2. Revise the following legislation and regulations to provide an 
application shield for ``new'' and ``modified sources'' (as defined by 
ss.144.30(20s) and (20e), Wis. Stats.): s.144.391(1)(b), Wis. Stats.; 
s.144.3925(7), Wis. Stats.; s.NR 407.06(2), Wis. Adm. Code; and s.NR 
407.08, Wis. Adm. Code. Wisconsin's program does provide an application 
shield for ``existing sources'' (as defined by s.144.30(13). 40 CFR 
70.7(b) requires that the application shield must apply to all part 70 
sources which meet the application shield requirements.
    3. Revise the following legislation and regulation to provide for 
operational flexibility for ``new'' and ``modified sources'' (as 
defined by ss.144.30(20s) and (20e), Wis. Stats.): s.144.391(4m), Wis. 
Stats.; and s.NR 407.025, Wis. Adm. Code. Wisconsin's program does 
provide for operational flexibility for ``existing sources'' (as 
defined by s.144.30(13). 40 CFR 70.4(b)(12) requires that permit 
flexibility apply to all part 70 sources.
    4. Revise the appropriate legislation and regulations to provide 
the authority to deny a renewal application for a source that is not in 
compliance. 40 CFR 70.6(a)(6)(i) requires that any permit noncompliance 
is grounds for denial of a permit renewal application. Section NR 
407.09(1)(f)1., Wis. Adm. Code, states that the authority to deny a 
permit renewal application for noncompliance is contingent upon the 
requirements in s.144.3925(6), Wis. Stats., which do not currently 
provide for a denial in such a circumstance. Appendix P of Wisconsin's 
operating permits program submittal includes draft statutory revisions 
that are intended to fix this deficiency. The draft revisions propose 
to add this authority to s.144.396(3)(c), Wis. Stats. Regardless of the 
statutory placement of this authority, s.NR 407.09(1)(f)1., Wis. Adm. 
Code, must be revised if necessary to reference the correct statutory 
authority.
    5. Revise ss.NR 407.14(1)(b), (c), (d), and (h), Wis. Adm. Code, to 
provide that if the conditions specified in these provisions are met, 
WDNR is required to reopen a permit for cause. Under the State's 
current provisions, reopening a permit under these circumstances is 
discretionary. 40 CFR 70.7(f)(1) establishes the conditions under which 
reopening a permit for cause is mandatory. However, the conditions of 
ss.NR 407.14(1)(c) and (d), Wis. Adm. Code, are only mandatory if they 
meet the 3 year requirement under 40 CFR 70.7(f)(1)(i), or are acid 
rain requirements under 40 CFR 70.7(f)(1)(ii).
    6. Revise s.NR 407.05, Wis. Adm. Code, to include the duty to 
supplement or correct application provisions, as required under 40 CFR 
70.5(b).
    7. Revise s.144.3935(1)(a), Wis. Stats., to provide WDNR the 
authority to issue operating permits to ``new'' and ``modified'' part 
70 sources (as defined by ss.144.30(20s) and (20e), Wis. Stats.) that 
are not in compliance. 40 CFR 70.3(a) requires that the permitting 
agency must have authority to issue permits to all prt 70 sources.

    Revise s.NR 407.05(4)(h)2.c., Wis. Adm. Code, to provide that 
compliance plan application requirements for noncomplying new and 
modified sources include a narrative description of how the sources 
will achieve compliance. 40 CFR 70.5(c)(8)(ii)(C) requires this 
compliance plan application requirement for all part 70 sources that 
are not in compliance.
    Revise s.NR 407.05(4)(h)3.c., Wis. Adm. Code, to provide for 
schedule of compliance application requirements for noncomplying new 
and modified sources. 40 CFR 70.5(c)(8)(iii)(C) requires schedules of 
compliance in all noncomplying part 70 source applications.
    Revise s.NR 407.05(4)(h)4., Wis. Adm. Code, to provide for progress 
report application requirements for noncomplying new and modified 
sources. 40 CFR 70.5(c)(8)(iv) requires progress report schedules in 
all noncomplying part 70 source applications.
    Revise s.NR 407.09(4)(b), Wis. Adm. Code, to provide for schedule 
of compliance and progress report requirements in permits issued to 
noncomplying new and modified sources. 40 CFR 70.6(c)(3) and (4) 
require schedule of compliance and progress report requirements in all 
part 70 permits that are issued to noncomplying sources.
    8. Revise ss.NR 407.03(1)(d), (g), (h), (o), (s), (sm), and (t), 
Wis. Adm. Code, to ensure that no part 70 sources are exempted from the 
requirement to obtain an operating permit, as provided under 40 CFR 
70.3. Section NR 407.03(1)(t) potentially exempts certain part 70 
sources, and ss.NR 407.03(1)(d), (g), (h), (o), (s), and (sm) do not 
provide for adequate procedures to limit these sources' potential to 
emit. The 40 CFR 70.2 definition of ``major source'' considers the 
potential to emit of a source in determining major source status. The 
Wisconsin permitting exemptions listed above determine applicability 
based in part or totally on these sources' actual emissions or 
throughput, and the provisions in s.NR 407.03(4) do not provide an 
enforceable mechanism for limiting these sources' potential emissions 
to the actual emissions levels or throughput established in the 
exemptions.
    WDNR has demonstrated that the additional exemptions provided for 
in s.NR 407.03 are acceptable because they do not exempt part 70 
sources from the operating permit program. These exemptions are further 
analyzed in the TSD for this proposed action.
    To be eligible for interim approval, 40 CFR 70.4(d)(3)(ii) requires 
that a program provide for adequate authority to issue permits 
containing all applicable requirements to all title V sources. Due to 
the deficiencies outlined in 7. and 8. above, EPA is proposing that 
Wisconsin's operating permit program be granted source category limited 
interim approval. See 57 FR 32270 (July 21, 1992). Therefore, EPA is 
not proposing to include ``new'' and ``modified'' part 70 sources that 
are not in compliance (as defined by Wisconsin's operating permits 
program), and part 70 sources covered by Chapter NR 407.03(1)(d), (g), 
(h), (o), (s), (sm), and (t) as part of the interim approval of 
Wisconsin's program. The exclusion of these source categories from 
approval, however, does not affect Wisconsin's obligation to fix these 
deficiencies in order to be eligible for full approval.
    For the deficiency outlined in 7. above, EPA considers the 
legislative drafting oversight in the use of the term ``existing 
source'' in a manner inconsistent with the definition of the term to be 
a compelling reason for granting source category limited interim 
approval.
    For the deficiency outlined in 8. above, EPA considers the lack of 
EPA guidance in developing prohibitory rules at the time Wisconsin 
promulgated its operating permits regulations to be a compelling reason 
for granting source category limited interim approval. For the 
deficiency with the s.NR 407.03(1)(t) exemption, EPA considers the 
additional analysis provided by WDNR showing that the exemption could 
potentially exempt title V sources to be a compelling reason for 
granting source category limited interim approval. At the time of 
Wisconsin's operating permits program submittal, WDNR had determined 
that this exemption would not exclude any title V sources from the 
requirement to obtain an operating permit. However, WDNR later 
determined that this exemption could exclude title V sources.
    Wisconsin has not requested additional time for issuing initial 
operating permits, as the State intends to fix the source category 
limited interim approval deficiencies in time to permit all sources 
within the 3 year phase-in period. In addition, based on estimates 
provided by WDNR, EPA believes that only a small number of sources and 
a small amount of emissions would be affected by source category 
limited interim approval. For example, WDNR estimates that only 2 or 3 
sources per year will be affected by the noncomplying new and modified 
source deficiency. WDNR is also not aware of any part 70 sources that 
would meet the s.NR 407.03(1)(t) exemption provisions. For further 
information, refer to the TSD for this proposed action. EPA has 
determined that Wisconsin's operating permits program can issue permits 
to a sufficient number of part 70 sources, and can do so on a schedule 
that substantially meets the requirements of part 70.
    This interim approval, which may not be renewed, extends for a 
period of up to 2 years. During the interim approval period, the State 
is protected from sanctions for failure to have a program, and EPA is 
not obligated to promulgate a Federal permits program in the State. 
Permits issued under a program with interim approval have full standing 
with respect to part 70, and the 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.
    As outlined in II.A.4.c. above, 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 an 
informal 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 
interim approval. The principal purposes of the docket are:

    (1) To allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process; and
    (2) To serve as the record in case of judicial review. The EPA will 
consider any comments received by November 18, 1994.

B. Executive Order 12866

    The Office of Management and Budget 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, 
and Reporting and recordkeeping requirements.

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

    Dated: September 27, 1994.
Robert Springer,
Acting Regional Administrator.
[FR Doc. 94-25866 Filed 10-18-94; 8:45 am]
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