[Federal Register Volume 59, Number 201 (Wednesday, October 19, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-25866] [[Page Unknown]] [Federal Register: October 19, 1994] ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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 --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- 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] BILLING CODE 6560-50-F