Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Proposed Rules 8333

1 Guidance for the Initial Implementation of

Section 112(g), Memorandum from John S. Seitz to

EPA Regional Air Division Directors, June 28, 1994.

2For State and regulated community comments

submitted on the proposed section 112(g) rule, see

Docket Number A–91–64 inserts IV-D–199, IV-D–

213, IV-D–217, IV-D–219, IV-D–222, IV-D–229, IVD–255, IV-D–295, IV-D–323, IV-D–333, IV-D–337,

IV-D-PH217, IV-D–199, IV-D–213, IV-D–295, IV-DPH221, and IV-D-PH222.

contacts related to employment services

where the seller or telemarketer requests

or receives payment prior to providing

the promised services, business

ventures, investment opportunities,

prize promotions, or credit-related

programs.

§ 310.7 Actions by States and private

persons.

Any attorney general or other officer

of a State authorized by the State to

bring an action under the Telemarketing

and Consumer Fraud and Abuse

Prevention Act, and any private person

who brings an action under that Act,

shall serve written notice of its action

on the Commission, if feasible, prior to

its initiating an action under this Rule.

The notice shall be sent to the Office of

the Director, Bureau of Consumer

Protection, Federal Trade Commission,

Washington, D.C. 20580, and shall

include a copy of the State’s or private

person’s complaint and any other

pleadings to be filed with the court. If

prior notice is not feasible, the State or

private person shall serve the

Commission with the required notice

immediately upon instituting its action.

§ 310.8 Federal preemption.

Nothing in this Rule shall be

construed to preempt any State law that

is not in direct conflict with any

provision of this Rule.

§ 310.9 Severability.

The provisions of this Rule are

separate and severable from one

another. If any provision is stayed or

determined to be invalid, it is the

Commission’s intention that the

remaining provisions shall continue in

effect.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 95–3537 Filed 2–13–95; 8:45 am]

BILLING CODE 6750–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 63

[AD–FRL–5155–2]

Hazardous Air Pollutants: Provisions

Governing Constructed,

Reconstructed or Modified Major

Sources

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Interpretive notice.

SUMMARY: This notice announces the

EPA’s revised interpretation of the

Clean Air Act’s (Act) requirements

regarding the effective date of section

112(g) of the Act. The interpretation

adopted here postpones the effective

date of section 112(g) until after the EPA

has promulgated a rule addressing that

provision.

EFFECTIVE DATE: February 14, 1995.

FOR FURTHER INFORMATION CONTACT: Ms.

Kathy Kaufman at (919) 541–0102,

Information Transfer and Program

Integration Division (MD–12), U. S.

Environmental Protection Agency,

Research Triangle Park, North Carolina

27711.

SUPPLEMENTARY INFORMATION:

I. Summary of EPA’s Policy

The Administrator of the EPA is today

announcing the EPA’s interpretation of

the Act requirements regarding the

effective date of section 112(g) during

the period prior to promulgation of a

Federal rule addressing implementation

of that section. This notice effects

changes from the view embodied in the

preamble to the proposed rulemaking

under section 112(g), Federal Register

notices of proposed and final approvals

of operating permits programs under

title V of the Act, and in guidance

issued by the EPA’s Office of Air

Quality Planning and Standards

(OAQPS).

For the reasons set forth in this notice,

the EPA now interprets section 112(g)

not to take effect before the EPA issues

notice and comment guidance

addressing implementation of that

section. In the interim period before this

guidance is promulgated, States may, as

a matter of State law, implement a

program for the review of section 112(g)

modifications, constructions, or

reconstructions. However, the section

112(g) requirement that major source

modifications, constructions, or

reconstructions meet the maximum

achievable control technology

(MACT)—as determined on a case-bycase basis where no Federal standard for

a source category has been set—will not

take effect as a matter of Federal law

until the section 112(g) rule is

promulgated.

II. Discussion

A. Requirements of Section 112(g).

Previous Policy Position

After the effective date of a title V

permit program in a State, section 112(g)

prohibits any person from constructing

or reconstructing a major source of

hazardous air pollutants (HAP), or

modifying a major HAP’s source,

without a determination from ‘‘the

Administrator (or the State)’’ that MACT

will be met. The determination must be

on a case-by-case basis by ‘‘the

Administrator (or the State)’’ if no

MACT standard has been issued.

Section 112(g)(1)(B) also provides that

the Administrator ‘‘shall, after notice

and opportunity for comment and not

later than [May 15, 1992] publish

guidance with respect to

implementation of this subsection.’’ The

guidance must address the relative

hazard of HAP in a manner ‘‘sufficient

to facilitate the offset showing’’ allowed

in the definition of ‘‘modification.’’

The EPA proposed a rule

implementing section 112(g) on April 1,

1994 (59 FR 15504). The EPA currently

anticipates promulgation of this rule

during the summer of 1995. In

anticipation of the fact that many title

V permit programs would be approved

before the section 112(g) rule was

promulgated, the OAQPS issued a

guidance memorandum on June 28,

1994 1 to assist States in their

implementation of section 112(g) during

this transition period. The guidance

states that section 112(g) takes effect

upon approval of a title V program in a

State regardless of whether the EPA’s

rule has been promulgated. The

guidance also offers suggestions for how

States may implement section 112(g)

during the transition period.

To date, the EPA has approved several

title V programs, the first of which was

for the State of Washington on

November 9, 1994 (59 FR 55813). EPA

also has proposed approval of numerous

other programs. In each of these notices,

the Agency has restated its position that

the requirements of section 112(g)

would take effect in these States upon

approval of the title V program, and has

described its understanding of how

section 112(g) would be implemented in

that State during the transition period.

B. Reconsideration Based on Concerns

Raised

States and the regulated community

have voiced considerable concern with

the impracticality of implementation of

section 112(g) during the transition

period.2 These concerns have focused

on the provisions for determining the

applicability of section 112(g), and in

particular on provisions addressing de

minimis levels and offsets for

modifications, as well as the definition

of ‘‘major source’’ for constructions and
8334 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Proposed Rules

reconstructions. States and the regulated

community have noted that the

applicability of the section 112(g)

modification provisions have the

potential to vary significantly

depending on how these issues are

addressed in the final section 112(g)

rule, that these provisions are among the

most complex and controversial in the

section 112(g) proposal, and that

implementation of these provisions in

the absence of a promulgated rule will

present considerable uncertainty and

legal and financial risk for States and

emissions sources.

After careful consideration, the EPA

concludes that these concerns are valid

and, as a policy matter, justify reexamining and modifying the Agency’s

interpretation concerning the effective

date of section 112(g). Moreover, the

EPA believes it should announce its

revised view now, before there is a

significant expenditure of State, source,

and Agency resources and before

questions of source liability are raised.

In light of this conclusion, the EPA has

revisited its prior legal interpretation

that section 112(g) must take effect upon

approval of the title V program

regardless of whether a rule has been

promulgated. These practical difficulties

confirm for the Agency the soundness of

a reading that implementation of section

112(g) is to be delayed until a rule is

promulgated.

C. Analysis of Statutory Requirements

for Modifications

On its face, the section 112(g)

requirement for case-by-case MACT

determination for new major sources,

reconstructed sources, and

modifications to existing major sources

appears to be triggered upon the title V

program effective date. However, the

Act also calls for guidance ‘‘with respect

to the implementation of’’ section 112(g)

to be issued ‘‘after notice and

opportunity for comment and not later

than’’ May 15, 1992. Section

112(g)(1)(B). Section 112(g)(1)(A)

provides further that a greater-than-de

minimis increase ‘‘shall not be

considered a modification’’ if it is offset

by an equal or greater decrease in a

more hazardous pollutant, ‘‘pursuant to

guidance issued by the Administrator

under subparagraph (B).’’ The guidance

must specifically ‘‘facilitate the offset

showing’’ and ‘‘include an

identification, to the extent practicable,

of the relative hazard to human health

resulting from emissions’’ of HAP.

Section 112(g) is analogous in certain

important respects to statutory

provisions at issue in the recent D.C.

Circuit decision concerning inspection

and maintenance (I/M) programs under

the Act. Natural Resources Defense

Council versus EPA, 22 F.3d 1125 (D.C.

Cir. 1994). Section 182(c)(3) of the Act

requires States to establish programs for

‘‘enhanced’’ vehicle inspection and

maintenance programs. The statute

further requires that these programs

must be in compliance with regulatory

‘‘guidance’’ published by the

Administrator, and must be effective by

Nov. 15, 1992. In NRDC versus EPA, the

Court held that, because the EPA was

late in issuing the guidance called for in

the statute, without which it was

impossible as a practical matter for

States to create their own programs, the

statutory requirement for States to have

an effective program should be delayed.

The section 112(g) modification

provisions bear two important

similarities to the statutory provisions at

issue in NRDC versus EPA. First, the

EPA was obligated to issue guidance on

section 112(g) for the States well before

they were expected to begin

implementing section 112(g) on the

effective date of title V programs.

Second, that guidance is intended to be

binding. This is because the guidance

forms an essential link between the

statutory directives triggered on the

effective date of permit program

approval and the ability to actually

implement these directives.

Regarding offsets, section 112(g)(1)(A)

provides that offsets are to be

determined ‘‘pursuant to guidance

issued by the Administrator * * *’’ It

follows that the absence of guidance

precludes the issuance of valid offset

determinations by a reviewing agency.

Moreover, the absence of guidance

makes it impossible for the owner or

operator of the source to submit a

‘‘showing’’ provided for by the last

sentence ‘‘that such increase has been

offset under the preceding sentence,’’

that is, pursuant to the Administrator’s

guidance (emphasis added). While a

State permitting authority could decide

to impose offsetting provisions that are

more stringent than those in the EPA

guidance, the EPA believes that

Congress intended the EPA guidance as

integral to the implementation of this

provision.

The concept of de minimis values is

likewise integral to the definition of

‘‘modification’’ in section 112(a)(5).

This is because a ‘‘modification’’ is

defined in section 112(a)(5) as a

‘‘physical change in, or change in the

method of operation of, a major source

which increases the actual emissions of

any hazardous air pollutant * * * by

more than a de minimis amount * * *.’’

Until de minimis values are established

in the section 112(g) rule, the definition

of ‘‘modification’’ remains incomplete,

lacking the lower boundary that the

statute contemplates will be established

through a notice and comment process.

The statute, recognizing that

establishment of de minimis values

would require the application of

scientific expertise and judgment, called

for the EPA to set these values based on

a notice and comment process. It would

be contrary to the intent of the Act to

require the section 112(g) program for

review of modifications to go forward

when the issue of what constitutes a

‘‘modification’’ cannot be resolved with

the degree of certainty envisioned by the

statute.

It thus appears that certain crucial

elements in the section 112(g) program

for dealing with modifications are

missing until the EPA promulgates

guidance. Under these circumstances, it

is consistent with the statute, and with

applicable precedent, to conclude that

the obligation of States to establish the

required program for review of

modifications hinges on promulgation

of the requisite ‘‘guidance’’—which is in

fact, as the statute makes clear, a

binding rule—governing both offsets

and de minimis values.

D. Analysis of Statutory Requirements

for Major Source Construction and

Reconstruction

The guidance required to be

published under section 112(g)(1)(B)

addressing implementation of

‘‘subsection’’ 112(g) must extend not

only to modifications under section

112(g)(2)(A), but also to major source

constructions and reconstructions

addressed in section 112(g)(2)((B). This

general directive aside, the statutory

linkage between the section 112(g)

guidance and implementation is not as

detailed for constructions and

reconstructions as it is for modification

requirements. Notwithstanding this, the

EPA believes that even with regard to

constructions and reconstructions,

guidance is necessary to resolve issues

critical to the scope of applicability of

these provisions, and that delaying the

effectiveness of these provisions

therefore represents a permissible

reading of the Act.

In the April 1, 1994 proposal, the EPA

solicited comment on two alternative

interpretations of the phrase ‘‘construct

a major source.’’ See 59 FR 15517. One

interpretation would treat new majoremitting equipment at existing major

source plant sites as ‘‘modifications,’’

while the other interpretation would

treat such additions as ‘‘constructions.’’

Under the ‘‘modification’’ alternative,

such equipment could be offset by a

decrease elsewhere at the plant site.

Under the ‘‘construction’’ alternative,
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Proposed Rules 8335

such equipment would be required to

install new source technology and

offsets would not be available.

Similarly, the April 1, 1994 proposal

contained two alternative definitions of

major source ‘‘reconstruction.’’ The

alternative definitions are similar in

that, for each, the replacement of

components, where the cost of the

replacement components is greater than

50 percent of the capital cost of

‘‘constructing a major source,’’ would

trigger reconstruction requirements. The

alternatives differ in that one alternative

treats the entire plant site as the basis

for comparison, while the other

alternative treats a major-emitting

‘‘emission unit’’ as the basis for

comparison.

The ambiguities surrounding the term

‘‘construction’’ have potentially

significant impacts on the nature and

scope of the Federal program,

particularly in a transition period

during which the modification

provisions of section 112(g) are delayed.

While there are likely to be few

constructions of ‘‘greenfield’’ facilities

emitting major amounts of HAPs prior

to promulgation of the section 112(g)

rule, there will be a far greater number

of additions of major-emitting units at

existing major source plant sites. Until

the issue of whether these additions

constitute a ‘‘construction’’ is clarified

through rulemaking, there will be

uncertainty as to how these additions

must be treated as a matter of Federal

law. For similar reasons, the scope of

the section 112(g) requirements for

‘‘reconstructions’’ will continue to be in

doubt until the section 112(g) rule is

promulgated.

These implementation difficulties

demonstrate that, as is the case for the

section 112(g) modification provisions,

rulemaking is needed to provide the

degree of certainty EPA believes was

intended by Congress regarding the

applicability of the provisions for major

source construction and reconstruction.

For this reason, EPA believes it would

be unreasonable to require the

implementation of the section 112(g)

provisions relating to construction and

reconstruction prior to completion of

the rulemaking.

F. Additional Clarifications

The EPA’s interpretation, announced

today, regarding the timing for

implementation of section 112(g),

applies to every title V program that has

been or will be approved prior to

promulgation of a Federal rule

implementing section 112(g). The

interpretation concerns the effective

date of a Federal requirement set forth

in the Act. In this sense, this

interpretation need not be addressed in

individual title V approvals. The EPA

has indicated in a number of title V

approval actions that the State would

use its existing SIP-approved

preconstruction review program to

implement section 112(g) during the

transition period. However, there have

been no approvals of State programs

designed specifically to implement

section 112(g). Therefore, there is no

need to revisit any EPA rulemaking

action in order to implement today’s

notice.

This interpretation should not require

significant changes to any title V

program submittal. Each State program

reviewed by EPA to date has included

a general commitment to implement

section 112(g), in accordance with the

EPA regulations and/or guidance, upon

approval of their title V program.

However, those commitments were

fashioned broadly enough to

accommodate today’s announced

interpretation, and so no program

revisions should be necessary for those

States.

The EPA is aware of concerns that

States may need additional time

following the promulgation of the

section 112(g) rule before they can begin

implementing section 112(g). The EPA

believes the statute may be read to allow

for an additional period of delay so that

States may adopt conforming rules if it

would otherwise be impossible for

States to implement the program.

However, the EPA has not determined

whether additional time will in fact be

needed. If it is decided that additional

time should be provided before the

provisions of section 112(g) become

effective, the EPA will so provide in the

final section 112(g) rulemaking.

Finally, certain States have already

promulgated regulations designed to

implement section 112(g). The EPA

wishes to emphasize that nothing in this

notice is intended to preclude or

discourage States from implementing a

program similar to section 112(g) as a

matter of State law prior to

promulgation by the EPA of the section

112(g) guidance.

Dated: February 8, 1995.

Carol M. Browner,

Administrator.

[FR Doc. 95–3661 Filed 2–13–95; 8:45 am]

BILLING CODE 6560–50–P

40 CFR Part 70

[MT–001; FRL–5155–3]

Clean Air Act Proposed Interim

Approval, or in the Alternative

Proposed Disapproval, of Operating

Permits Program; State of Montana

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

Montana for the purpose of complying

with Federal requirements for an

approvable State program to issue

operating permits to all major stationary

sources, and to certain other sources. In

the alternative, EPA proposes

disapproval of the Montana Operating

Permits Program if the corrective actions

necessary for final interim PROGRAM

approval are not completed and

submitted to EPA prior to the statutory

deadline.

DATES: Comments on this proposed

action must be received in writing by

March 16, 1995.

ADDRESSES: Comments should be

addressed to Laura Farris at the Region

8 address. Copies of the State’s

submittal and other supporting

information used in developing the

proposed rule are available for

inspection during normal business

hours at the following location: U.S.

Environmental Protection Agency,

Region 8, 999 18th Street, suite 500,

Denver, Colorado 80202.

FOR FURTHER INFORMATION CONTACT:

Laura Farris, 8ART–AP, U.S.

Environmental Protection Agency,

Region 8, Air Programs Branch, 999

18th Street, suite 500, Denver, Colorado

80202, (303) 294–7539.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the 1990

Clean Air Act Amendments (sections

501–507 of the Clean Air Act (‘‘the

Act’’)), 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 (part 70). Title V requires States to

develop, and submit to EPA, programs

for issuing these operating permits to all