[Federal Register Volume 60, Number 43 (Monday, March 6, 1995)]
[Rules and Regulations]
[Pages 12128-12137]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5403]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[WI001; FRL-5164-9]


Clean Air Act Final Interim Approval of the Operating Permits 
Program; Wisconsin

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: The EPA is promulgating interim approval of the Operating 
Permits Program submitted by the State of Wisconsin 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.

EFFECTIVE DATE: April 5, 1995.

ADDRESSES: Copies of the State's submittal and other supporting 
information used in developing the final 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 West Jackson Boulevard, Chicago, Illinois 
60604, (312) 886-2703.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    Title V of the Clean Air Act (Act), and implementing regulations at 
40 Code of Federal Regulations (CFR) part 70 require that States 
develop and submit operating permits 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.
    On October 19, 1994, EPA proposed interim approval of the operating 
permits program for the State of Wisconsin. See 59 FR 52743. The EPA 
received public comment from 7 organizations on the proposal and 
compiled a Technical Support Document (TSD) responding to the comments 
and briefly describing and clarifying aspects of the operating permits 
program. In this notice EPA is taking final action to promulgate 
interim approval of the operating permits program for the State of 
Wisconsin.

II. Final Action and Implications

A. Analysis of State Submission and Response to Public Comments

    The EPA received comments on a total of 14 topics from 7 
organizations. The EPA's response to these comments is summarized in 
this section. Comments supporting EPA's proposal are not addressed in 
this notice; however, EPA's complete response to comments TSD is 
available in the official file at the Region 5 address noted in the 
ADDRESSES section above.
1. Indian Lands
    The EPA proposed that interim approval of Wisconsin's operating 
permits program not extend to lands within the exterior boundaries of 
reservations of federally recognized Indian Tribes in the State of 
Wisconsin. The proposal indicated that the Wisconsin Department of 
Natural Resources (WDNR) had not demonstrated the legal authority to 
regulate sources on tribal lands. WDNR submitted several comments on 
this issue, which are summarized and addressed below.
    Comment: ``[W]ho will be responsible for issuance of permits to 
sources on Indian reservations prior to promulgation of either a tribal 
operation permits program or the federal operation permits program 
under 40 CFR Part 71? We are not aware of any tribal programs being 
developed or implemented in Wisconsin, and the federal part 71 rules 
have not yet been formally proposed. We are concerned about the 
apparent lack of any regulatory authority over sources on Indian 
reservations until a federal or tribal program is promulgated.''
    Response: At this time, EPA is not aware of any facility within the 
exterior boundaries of a reservation in the State of Wisconsin that 
requires a title V operating permit. Further, the Act 
[[Page 12129]] explicitly contemplates that Indian Tribes may develop 
and administer their own Clean Air Act programs in the same manner as 
States. Section 164(c) delegates to Indian governing bodies the 
authority to redesignate lands within the exterior boundaries of 
reservations of federally recognized Indian tribes for purposes of the 
Act's Prevention of Significant Deterioration of Air Quality (PSD) 
program. Section 301(d) of the Act delegates to EPA the authority to 
specify the provisions of the Act for which it is appropriate to treat 
Indian Tribes in the same manner as States. The EPA has issued proposed 
rules that would authorize Tribes to administer approved Act programs 
in the same manner as States for virtually all provisions of the Act, 
including title V operating permit programs. See 59 FR 43956 (Aug. 25, 
1994).
    The EPA has spelled out some of the steps it currently takes and 
plans to take to protect tribal air quality prior to issuance of final 
rules authorizing tribal Act programs and ensuing tribal program 
approvals. See, e.g., 59 FR at 43960-43961. The EPA is also developing 
rules to be issued within the next few months that would provide for 
EPA implementation of title V permit programs on tribal lands in the 
interim period before tribal programs are approved.
    Comment: ``[T]he State of Wisconsin believes that it has authority 
to permit sources within Indian reservations if the source may have a 
substantial off-reservation impact * * *. The State has jurisdiction to 
enforce its air permitting laws on the basis of common law principles 
laid down by the United States Supreme Court. Recent decisions of that 
Court have departed from the concept of inherent Indian sovereignty as 
a bar to State jurisdiction over Indians and leaned towards reliance on 
the principle of federal preemption. Rice v. Rehner, 463 U.S. 713 
(1983); see also McClanahan v. Arizona State Tax Commission, 411 U.S. 
164 (1973) * * *. Although the concept of tribal sovereignty is given 
less emphasis today, it continues to be relevant to a form of 
preemption analysis applicable to Indian law, which can be summarized 
as follows: State jurisdiction is preempted by the operation of federal 
law if it interferes or is incompatible with federal and tribal 
interests reflected in federal law, unless the State interests at stake 
are sufficient to justify the assertion of State authority. New Mexico 
v. Mescalero Apache Tribe, 462 U.S. 324, [  ] 334 (1983). Thus, the 
inquiry must be whether federal or Indian interests are interfered with 
by enforcement of the state's air permitting laws, and, if so, whether 
the State interests at stake are sufficient to justify the assertion of 
State authority. In California v. Cabazon Band of Mission Indians, 480 
U.S. 202 (1987), the Court discusses the issue of whether State laws 
apply to on-reservation conduct of Indians. The Court describes the 
appropriate analysis, that being the balancing of state, federal, and 
tribal interests and the related notion of tribal sovereignty * * *. 
Where a State's interest in applying its law outweighs any competing 
federal or Indian interests at stake, and where the State's exercise of 
its jurisdiction is not incompatible with congressional goals of 
promoting Indian self-government, self-sufficiency and economic 
development, states may apply their laws unless such application is 
preempted by the law. Cabazon, 480 U.S. at 214-216. In the case of the 
title V permitting program, no express federal law preempts State 
jurisdiction on Indian reservations. While this could occur with 
delegation of state status to the tribes, it has not happened yet. 
Furthermore, no Tribe in Wisconsin has a comprehensive air management 
program similar to that of the State. Given this backdrop, the State's 
interests in protecting the health and welfare of its citizens must 
prevail.''
    ``* * * [T]he State of Wisconsin believes that EPA's assertion that 
the State has no permitting jurisdiction over non-Indians on Indian 
reservations is overly broad, especially where the lands are owned by 
non-Indians. It is the State of Wisconsin's position that activities by 
non-Indians on Indian reservations are subject to a case-by-case review 
to determine whether the tribe (the federal government) or the state 
has regulatory jurisdiction. In order to regulate non-Indians, the 
tribe must demonstrate its inherent authority on a case-by-case basis. 
Montana v. US, 450 US 544 [  ] (1981), Brendale v. Confederated Tribes 
of Yakima Indian Nation, 492 US 408  [  ] (1989) * * *. In addition, as 
noted above, there is no inherent bar to state jurisdiction over the 
on-reservation activities of non-Indians.''
    Response: To obtain title V program approval a State must 
demonstrate that it has adequate authority to issue permits and assure 
compliance by all sources required to have permits under title V with 
each applicable requirement under the Act. See Act Sec. 502(b)(5); 40 
CFR 70.4(b)(3)(i). The authority must include:

    A legal opinion from the Attorney General from the State or the 
attorney for those State, local, or interstate air pollution control 
agencies that have independent counsel, stating that the laws of the 
State, locality, or interstate compact provide adequate authority to 
carry out all aspects of the program. This statement shall include 
citations to the specific stat[ut]es, administrative regulations, 
and, where appropriate, judicial decisions that demonstrate adequate 
authority.

    40 CFR 70.4(b)(3). Thus, the Act requires affected States to 
support their title V program submittals with a specific showing of 
adequate legal authority over all regulated sources, including sources 
located on lands within Indian reservations. For the reasons outlined 
below, EPA concludes that the information presented by WDNR has not 
adequately demonstrated authority to regulate title V sources located 
within the exterior boundaries of reservations of Federally recognized 
Tribes, including any non-Indian owned fee lands within reservation 
boundaries.
    In Washington Department of Ecology v. EPA, 752 F.2d 1465, 1469 
(9th Cir. 1985), the court upheld EPA's decision declining to approve 
the application of a state program submitted under the Resource 
Conservation and Recovery Act (RCRA) to Indian activities within Indian 
country, notwithstanding that ``RCRA does not directly address the 
problem of how to implement a hazardous waste management program on 
Indian reservations.'' The court reasoned that EPA's decision was 
within its reasonable discretion and was buttressed by ``well-settled 
principles of federal Indian law'':

    States are generally precluded from exercising jurisdiction over 
Indians in Indian country unless Congress has clearly expressed an 
intention to permit it. [citations omitted]. This rule derives in 
part from respect for the plenary authority of Congress in the area 
of Indian affairs. [citations omitted]. Accompanying the broad 
congressional power is the concomitant federal trust responsibility 
toward Indian tribes. [citations omitted]. That responsibility arose 
largely from the federal role as a guarantor of Indian rights 
against state encroachment. [citation omitted]. We must presume that 
Congress intended to exercise its power in a manner consistent with 
the federal trust obligation. [citation omitted].

Washington Department of Ecology, 752 F.2d at 1469-1470; see also 
United States v. Mazurie, 419 U.S. 544, 556 (1975) (the inherent 
sovereign authority of Indian Tribes extends ``over both their members 
and their territory''); Montana v. United States, 450 U.S. 544, 556-557 
(1981) (Tribes generally have extensive authority to regulate 
activities on lands that are held by the United States in trust for the 
Tribe).
    The cases cited by WDNR do not demonstrate that Wisconsin has 
authority to administer its title V operating permits program within 
the [[Page 12130]] exterior boundaries of Indian reservations. In New 
Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 337-38, 340-41, 343-44 
(1983), the Supreme Court held that the State of New Mexico's attempt 
to regulate the hunting activities of non-tribal members on a Tribe's 
reservation was preempted because federal law recognized the authority 
of the Tribe to regulate hunting and fishing and the State regulation 
of non-members would entangle and interfere with the federal promotion 
of tribal authority. In California v. Cabazon Band of Mission Indians, 
107 S.Ct. 1083 (1987), the Court held that California and Riverside 
County could not assert jurisdiction over bingo and gambling activities 
conducted by Indians on Indian land, even though the primary customers 
for the activities were non-Indians. The Court found that neither Pub. 
L. No. 83-280 nor the Organized Crime Control Act of 1970 authorized 
the State or County to impose gambling laws or ordinances on the 
reservation. In McClanahan v. Arizona State Tax Comm., 411 U.S. 164 
(1973), the Supreme Court held that it was unlawful for the State of 
Arizona to impose an income tax on a reservation Indian whose income 
was derived from reservation sources. In three of the four Supreme 
Court cases cited by WDNR to support its regulation of Indian country 
based on preemption analysis, the Court held that state regulation was 
preempted.
    In Rice v. Rehner, 463 U.S. 713 (1983) the Supreme Court reversed a 
lower court's decision that State regulation of liquor on a reservation 
was preempted by Federal law. The Court's decision was based on its 
conclusion that ``[i]n the area of liquor regulation, we find no 
`congressional enactments demonstrating a firm federal policy of 
promoting tribal self-sufficiency and economic development''' (citation 
omitted) and that Congress authorized State regulation over Indian 
liquor transactions. Rice, 463 U.S. at 724, 726, 734-35. In notable 
contrast with liquor regulation and as elaborated below, the Act (and 
other environmental statutes) plainly provides for tribal and Federal 
programs to protect air quality within reservations. Further, as 
explained below, there is well-established Federal policy promoting 
collaborative tribal and Federal environmental management of 
reservations and treating Tribes, not States, as responsible for 
protection of the reservation environment.
    WDNR cites two additional Supreme Court cases to support its 
comment that EPA has been overbroad in proposing to conclude that the 
State lacks authority over non-Indian owned lands within the exterior 
boundaries of an Indian reservation. WDNR comments that the 
determination of regulatory jurisdiction over such lands should be 
based on a specific case-by-case review.
    The case law addressing a Tribe's authority over non-members on 
non-Indian owned fee lands within the exterior boundaries of a 
reservation must be viewed in light of the provisions of the Act 
providing for tribal and Federal protection of air quality within 
reservation boundaries and the reservationwide concerns presented by 
air pollution activities, discussed further below.
    As noted, EPA's regulations implementing the title V program 
require specific evidence of legal authority. WDNR does not present 
Federal law, particularized facts, and a formal legal opinion that 
specifically and adequately support its broad claim of title V program 
jurisdiction over all reservations in Wisconsin. Adequate State 
authority is especially necessary in these circumstances where, as set 
out below, the Act and relevant Federal policies provide for Tribes and 
EPA to protect reservation air quality, Supreme Court case law 
recognizes inherent sovereign tribal authority to regulate activities 
on fee lands where the conduct may have a serious and substantial 
impact on tribal health or welfare, and EPA has proposed to interpret 
the Act tribal authority provisions as granting Tribes' authority over 
air pollution activities on fee lands within reservations.
    For many years Congress has delegated to Indian governing bodies 
the authority to redesignate ``[l]ands within the exterior boundaries 
of reservations of federally recognized Indian tribes'' for the PSD 
program under the Act. See section 164(c) of the Act. In 1990, Congress 
broadly addressed tribal authority under the Act, adding sections 
110(o) and 301(d) to the Act. Section 301(d)(2) of the Act authorizes 
EPA to issue regulations specifying those provisions of the Act for 
which it is appropriate ``to treat Indian Tribes as States.'' Further, 
it addresses the potential jurisdictional scope of tribal Act programs, 
authorizing EPA to treat Tribes in the same manner as States for ``the 
management and protection of air resources within the exterior 
boundaries of the reservation or other areas within the tribe's 
jurisdiction.'' Act Sec. 301(d)(2)(B). In addition, section 110(o) 
provides that tribal implementation plans under the Act ``shall become 
applicable to all areas * * * located within the exterior boundaries of 
the reservation, notwithstanding the issuance of any patent and 
including rights-of-way running through the reservation.'' Section 
302(r) of the Act defines ``Indian tribe'' to mean ``any Indian tribe, 
band, nation, or other organized group or community, including any 
Alaska Native village, which is Federally recognized as eligible for 
the special programs and services provided by the United States to 
Indians because of their status as Indians.'' Section 302(b) of the Act 
includes ``[a]n agency of an Indian tribe'' in the definition of ``air 
pollution control agency.'' See also sections 103 and 105 of the Act 
(authorizing Federal financial assistance to air pollution control 
agencies).
    The EPA has proposed to interpret these and other provisions of the 
Act as granting Tribes--approved by EPA to administer Act programs in 
the same manner as States--authority over all air resources within the 
exterior boundaries of a reservation for such programs. The EPA has 
explained that ``[t]his grant of authority by Congress would enable 
such Tribes to address conduct on all lands, including non-Indian owned 
fee lands, within the exterior boundaries of a reservation.'' 59 FR 
43956, 43958-43960 (Aug. 25, 1994) (legal rationale).<SUP>1

    \1\EPA's proposed interpretation was informed in part by the 
significant regulatory entanglements and inefficiencies that could 
result if tribes have reservationwide jurisdiction over Act Tribal 
implementation plans (TIPs), as plainly provided in section 110(o) 
of the Act, but States are conferred jurisdiction within reservation 
boundaries over non-TIP programs, such as title V. See 59 FR 43959; 
see also New Mexico v. Mescalero Apache Tribe, 462 U.S. at 340-41.
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    The Supreme Court has indicated that a Tribe ``may * * * retain 
inherent power to exercise civil authority over the conduct of non-
Indians on fee lands within its reservation when that conduct threatens 
or has some direct effect on the * * * health or welfare of the 
tribe.'' Montana, 450 U.S. at 566. A Tribe's inherent authority must be 
determined on a case-by-case basis, considering whether the conduct 
being regulated has a direct effect on the health or welfare of the 
Tribe substantial enough to support the Tribe's jurisdiction over non-
Indians. See Brendale v. Confederated Tribes and Bands of the Yakima 
Indian Nation, 492 U.S. 408 (1989).
    Thus, EPA observed that even without the proposed grant of 
authority, Indian Tribes would very likely have inherent authority over 
all activities within reservation boundaries, including non-Indian 
owned activities on fee lands, that are subject to Act regulation. The 
high mobility of air pollutants, resulting area-wide effects and the 
seriousness of such impacts would all tend to support 
[[Page 12131]] such inherent tribal authority. See 59 FR 43958, n. 5; 
see also 56 FR 64876 at 64877-64879 (Dec. 12, 1991).
    On January 24, 1983, the President issued a Federal Indian Policy 
stressing two related themes: (1) That the Federal government will 
pursue the principle of Indian ``self-government'' and (2) that it will 
work directly with tribal governments on a ``government-to-government'' 
basis. An April 29, 1994 Presidential Memorandum reiterated that the 
rights of sovereign tribal governments must be fully respected. 59 FR 
22,951 (May 4, 1994).
    The EPA's tribal policies commit to certain principles, including 
the following:

    EPA recognizes tribal Governments as sovereign entities with 
primary authority and responsibility for the reservation populace. 
Accordingly, EPA will work directly with tribal Governments as the 
independent authority for reservation affairs, and not as the 
political subdivisions of States or other governmental units.
* * * * *
    In keeping with the principal of Indian self-government, the 
Agency will view tribal Governments as the appropriate non-Federal 
parties for making decisions and carrying out program 
responsibilities affecting Indian reservations, their environments, 
and the health and welfare of the reservation populace. Just as 
EPA's deliberations and activities have traditionally involved 
interests and/or participation of State Governments, EPA will look 
directly to tribal Governments to play this lead role for matters 
affecting reservation environments.

    November 8, 1984 ``EPA Policy for the Administration of 
Environmental Programs on Indian Reservations''; Policy Reaffirmed by 
Administrator Carol M. Browner in a Memorandum issued on March 14, 
1994; see also Washington Department of Ecology, 752 F.2d at 1471-72 & 
n. 5.
    The United States also has a unique fiduciary relationship with 
Tribes, and EPA must consider tribal interests in its actions. Nance v. 
EPA, 645 F.2d 701, 710 (9th Cir.), cert. denied, Crow Tribe of Indians 
v. EPA, 454 U.S. 1081 (1981).
    The EPA provides federal financial assistance and technical 
assistance to Tribes to support assessment and protection of 
reservation environments including air quality. Section 301(d)(4) of 
the Act expressly provides for EPA administration of Act programs where 
it is inappropriate or infeasible for Tribes. EPA has described its 
efforts and plans to protect reservation air quality. The EPA will fill 
gaps in air quality protection in the interim period before tribal Act 
programs are approved, as necessary to ensure that reservation air 
quality is adequately protected. See 59 FR 43960-61. The EPA will issue 
proposed rules within the next few months that will provide for EPA 
implementation of title V permit programs where Tribes lack approved 
programs.
    Even where an environmental statute did not directly address 
management on reservations and Tribes themselves had not assumed 
authority for program management, the reviewing court upheld EPA's 
decision declining to approve a State program's application to Indian 
country and concluded:

    [T]he tribal interest in managing the reservation environment 
and the federal policy of encouraging tribes to assume or at least 
share in management responsibility are controlling.
* * * * *
    It is enough that EPA remains free to carry out its policy of 
encouraging tribal self-government by consulting with the tribes 
over matters of hazardous waste management policy, such as the 
siting of waste disposal. * * * The `backdrop' of tribal 
sovereignty, in light of federal policies encouraging Indian self-
government, consequently supports EPA's interpretation of RCRA.

Washington Dept. of Ecology, 752 F.2d at 1427 (citation omitted).
    Further, the State has failed to identify any compelling State 
interest that would justify broad assertion of State authority 
throughout Indian country. At this time, EPA is not aware of any 
facility within the exterior boundaries of an American Indian 
reservation in the State of Wisconsin that requires a title V operating 
permit. It is possible but entirely speculative that some future title 
V reservation sources may be located near State boundaries. As 
indicated, EPA has issued proposed rules that would authorize Tribes to 
administer EPA-approved title V programs and, in the interim, EPA is 
developing regulations that would authorize EPA to issue title V 
permits for affected sources where Tribes lack approved programs. In 
addition, the Act provides several mechanisms to address the potential 
transport of pollution off-reservation. See, e.g., 59 FR 43964; 
sections 110(a)(2)(D) and 126 of the Act; section 164(e) of the Act; 
section 505 of the Act.
    Based on the Clean Air Act and Federal Indian law and policies, EPA 
concludes that WDNR has not adequately supported the application of its 
title V program to reservations generally or to fee lands within 
reservation boundaries. See also 53 FR 43080 (Oct. 25, 1988) (EPA's 
decision declining to approve Washington's request to administer the 
Safe Drinking Water Act's Underground Injection Control Program to 
Indian lands).
    Finally, EPA's decision to decline to approve application of the 
State's program to lands within the exterior boundaries of reservations 
of federally recognized Indian Tribes based on the limited information 
submitted by the State and the special issues and considerations 
associated with tribal lands is within the Agency's discretion. See Act 
section 502(d)(1) (EPA ``may'' approve a [state title V] program) & Act 
section 502(g) (EPA ``may'' by rule grant the [state title V] program 
interim approval); compare Alabama Power Co. v. EPA, No. 94-1170, slip 
op. at 11 (D.C. Cir. Nov. 29, 1994) (``the AEL provision's mandatory 
language * * * `[t]he permitting authority shall * * * authorize an 
emission limitation less stringent than the applicable limitation * * 
*.' (emphasis added) * * *''); see also 59 FR 43982 (``[a] State Clean 
Air Act program submittal shall not be disapproved because of failure 
to address air resources within the exterior boundaries of an Indian 
Reservation or other areas within the jurisdiction of an Indian 
Tribe'') (proposed 40 CFR 49.10).
    Comment: ``[T]he proposed interim approval discusses both Indian 
reservations and tribal lands, with no clear distinction between the 
two. On page 4 of its proposed interim approval, EPA states: `* * * 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.' However, it is our 
understanding that Indians may own lands outside of a reservation which 
may still be considered `tribal lands'. Certain lands may be simply 
owned by tribal members, while other lands may be considered `trust 
lands' (i.e. after approval by the U.S. Department of the Interior). We 
are uncertain what EPA's position is as to whether State jurisdiction 
extends to various lands owned by Indians, but located outside of 
reservation boundaries. Again, this determination should likely be made 
on a case-by-case basis, as the State of Wisconsin may have regulatory 
jurisdiction on these lands. We are concerned that if the state does 
not have jurisdiction over these lands, a `checkerboard' pattern of 
regulation will develop, with no clear delineation of who has 
jurisdiction over air pollution sources. This can result in a non-
uniform, confusing and ineffective air pollution regulatory system. We 
believe that this issue should be clarified in EPA's final interim 
approval. Our position is that the State of Wisconsin should be allowed 
to exercise its jurisdiction on these lands, which are 
[[Page 12132]] located outside of reservation boundaries.''
    Response: As indicated, EPA is currently not aware of any title V 
source located on lands over which an Indian tribe has jurisdiction. 
Further, the State's comment does not identify any specific affected 
off-reservation sources. Without more information about specific 
circumstances, EPA cannot address the State's specific concern. In 
general, based on the information currently submitted to EPA by the 
State and largely for the reasons outlined in the preceding response, 
EPA's approval of Wisconsin's program would not extend to any sources 
located within Indian country, as defined at 18 U.S.C. 1151. The EPA 
will work with both the State and an affected tribal governments to 
evaluate any specific questions that are in fact presented.
2. Fee Adequacy
    WDNR commented that the State's title V fees were developed to 
provide for adequate implementation of the minimum program requirements 
as they existed when the fees were developed. However, WDNR is 
concerned that these fees may not be sufficient to cover any extra 
requirements that may be added to the program, especially the section 
114 enhanced compliance monitoring requirements and the section 112(r) 
emergency release requirements. WDNR stated that EPA must take into 
account the limited resources that States will have under the 
presumptive minimum fees established for the title V program in 
promulgating these regulations.
    Although title V establishes a presumptive minimum cost model, it 
also requires that a State's fee schedule result in the collection and 
retention of revenues sufficient to cover permit program costs. See 40 
CFR 70.9 as well as the guidance memorandum issued on August 4, 1993 
entitled, ``Reissuance of Guidance on Agency Review of State Fee 
Schedules for Operating Permits Programs Under Title V,'' signed by 
John Seitz, Director of the Office of Air Quality Planning and 
Standards. This adequacy requirement ensures that title V programs are 
not and will not be underfunded, and obligates the States to update and 
adjust their fee schedules if they are not sufficient to fund the 
program costs. It may therefore be appropriate to adjust fees for 
program expenditure increases, such as the implementation of new 
applicable requirements for enhanced monitoring and emergency releases.
3. Acid Rain Fees
    The EPA proposed that the approval of Wisconsin's fee schedule does 
not extend to Wisconsin's fee provisions for the collection of 
emissions fees from utilities with affected units under section 404 of 
the Act (s.144.399(2)(am), Wis. Stats., and s.NR 410.04(4), Wis. Adm. 
Code). 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. One 
commenter argued that the State fees are not directly charged on 
emissions from Phase I affected units, and therefore EPA should not be 
concerned about these fees, which would place Wisconsin's fee revenue 
collection slightly above the presumptive minimum cost established in 
part 70. Although the fees in question are not directly charged on 
emissions from Phase I affected units, they are charged to other units 
operated by a utility that owns or operates a Phase I affected source. 
In addition, the fee amount is equivalent to what would have been 
charged to the Phase I affected unit. In other words, the State program 
charges emissions fees to utilities with Phase I units in an amount 
equivalent to what would have been charged directly to the Phase I 
units. Because of this equivalency, EPA has determined that these fees 
cannot be considered title V fees.
4. Section 112(g) Implementation
    The EPA received several comments regarding the proposed approval 
of Wisconsin's preconstruction permitting program 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. Two commenters argued that Wisconsin should not, 
and cannot, implement section 112(g) until: (1) EPA has promulgated a 
section 112(g) regulation, and (2) the State has a section 112(g) 
program in place. The commenters also argued that Wisconsin's 
preconstruction review program cannot serve as a means to implement 
section 112(g) because it was not designed for that purpose. One 
commenter also asserted that such a regulatory program is 
unconstitutional because the section 112(g) requirements are vague. In 
addition to the above comments, WDNR also commented that EPA should 
delay the implementation of section 112(g) until the Federal 
regulations are promulgated. WDNR anticipates that the implementation 
of section 112(g) without Federal regulations will be difficult and 
time consuming. However, WDNR also commented that it will implement the 
requirements of section 112(g) if a such a delay is not possible.
    In its proposed interim approval of Wisconsin's part 70 program, 
EPA proposed to approve Wisconsin's preconstruction review program for 
the purpose of implementing section 112(g) during the transition period 
before promulgation of a Federal rule implementing section 112(g). This 
proposal was based in part on an interpretation of the Act that would 
require sources to comply with section 112(g) beginning on the date of 
approval of the title V program, regardless of whether EPA had 
completed its section 112(g) rulemaking. The EPA has since revised this 
interpretation of the Act in a Federal Register notice published on 
February 14, 1995. 60 FR 8333. The revised interpretation postpones the 
effective date of section 112(g) until after EPA has promulgated a rule 
addressing that provision. The revised notice sets forth in detail the 
rationale for the revised interpretation.
    The section 112(g) interpretive notice explains that EPA is still 
considering whether the effective date of section 112(g) should be 
delayed beyond the date of promulgation of the Federal rule so as to 
allow States time to adopt rules implementing the Federal rule, and 
that EPA will provide for any such additional delay in the final 
section 112(g) rulemaking. Unless and until EPA provides for such an 
additional postponement of section 112(g), Wisconsin must be able to 
implement section 112(g) during the transition period between 
promulgation of the Federal section 112(g) rule and adoption of 
implementing State regulations.
    For this reason, EPA is finalizing its approval of Wisconsin's 
preconstruction review program. This approval clarifies that the 
preconstruction review program is available as a mechanism to implement 
section 112(g) during the transition period between promulgation of the 
section 112(g) rule and adoption by Wisconsin of rules established to 
implement section 112(g). However, since the approval is for the single 
purpose of providing a mechanism to implement section 112(g) during the 
transition period, the approval itself will be without effect if EPA 
decides in the final section 112(g) rule that sources are not subject 
to the requirements of the rule until State regulations are adopted. 
Further, EPA is limiting the duration of this approval to 18 months 
following promulgation by EPA of the section 112(g) rule.
    The EPA believes that, although Wisconsin currently lacks a program 
designed specifically to implement section 112(g), Wisconsin's 
[[Page 12133]] preconstruction review program will serve as an adequate 
implementation vehicle during a transition period because it will allow 
Wisconsin to select control measures that would meet MACT, as defined 
in section 112, and incorporate these measures into a federally 
enforceable preconstruction permit.
    Another consequence of the fact that Wisconsin lacks a program 
designed specifically to implement section 112(g) is that the 
applicability criteria found in its preconstruction review program may 
differ from those in the section 112(g) rule. However, whether a 
particular source change qualifies as a modification, construction, or 
reconstruction for section 112(g) purposes during any transition period 
will be determined according to the final section 112(g) rule. The EPA 
would expect Wisconsin to be able to issue a preconstruction permit 
containing a case-by-case determination of MACT where necessary for 
purposes of section 112(g) even if review under its own preconstruction 
review program would not be triggered.
    WDNR also commented that it will implement section 112(g) using its 
preconstruction review program, as EPA proposed on October 19, 1994. In 
addition, WDNR agreed that allowing Wisconsin 18 months from 
promulgation of Federal section 112(g) regulations to adopt its own 
regulations is sufficient.
    One commenter incorporated by reference its comments on the 
proposed section 112(g) rule, and stated that the proposed rule has 
technical, legal, and constitutional defects that disqualify it as a 
valid or workable approach to section 112(g) implementation. The EPA 
believes the appropriate forum for pursuing objections to the legal 
validity of Federal regulations is by: (1) Submitting comments on a 
proposed rulemaking during the public comment period for that 
particular rulemaking, or (2) petitioning for review of the promulgated 
rule in the D.C. Circuit Court of Appeals. If the commenter has 
concerns with the final section 112(g) rule, the commenter will have 
the opportunity to pursue such action once the section 112(g) rule is 
promulgated.
    Two commenters assumed that EPA would delegate the section 112(g) 
requirements to the State. The EPA wishes to clarify that the 
implementation of section 112(g) by the State, including case-by-case 
MACT determinations, is a requirement for approval of a State title V 
program. In other words, approval of the title V operating permits 
program confers on the State responsibility to implement section 
112(g). Since the requirement to implement section 112(g) lies with the 
State in the first instance, there is no need for a delegation action 
apart from the title V program approval mechanism, except where the 
State seeks approval of a ``no less stringent'' program under 40 CFR 
part 63 subpart E. The EPA's approval of Wisconsin's program for 
delegation of section 112 standards as promulgated does not affect this 
responsibility to implement section 112(g).
5. Acid Rain Commitment
    WDNR commented that there has been a delay in finalizing the 
State's acid rain regulations, and stated that Wisconsin will be 
requesting a short extension of its January 1, 1995 commitment date for 
submitting the acid rain program requirements. On December 19, 1994, 
EPA received WDNR's request to extend the acid rain submittal 
requirement to May 1, 1995. Because EPA does not expect this extension 
to affect WDNR's ability to timely implement the Phase II acid rain 
requirements, EPA approves WDNR's request.
6. Operational Flexibility Provisions
    One commenter questioned EPA's authority to grant interim approval 
to a State that did not include operational flexibility provisions for 
``new'' and ``modified'' sources (as defined by Wisconsin's program). 
The Act provides that EPA may grant interim approval to a program that 
substantially meets the requirements of title V, but is not fully 
approvable. The key term, ``substantially meets'', was not expressly 
defined in the statute. The part 70 regulations further address this 
issue, but in fairly broad terms, specifying eleven core program 
elements, including operational flexibility. Further guidance was 
issued in a memorandum on August 2, 1993 entitled, ``Interim Title V 
Program Approvals,'' signed by John Seitz, Director of the Office of 
Air Quality Planning and Standards.
    40 CFR 70.4(d)(3)(viii) provides that the State program must allow 
certain changes to be made without requiring a permit revision if the 
changes are not title I modifications and do not exceed the emissions 
allowable under the permit, as provided in 40 CFR 70.4(b)(12). The 
preamble to the part 70 rulemaking further indicates that interim 
programs need to include only the ability to generally implement this 
section. See 57 FR 32271.
    Each of the three approaches to operational flexibility set forth 
in 40 CFR 70.4(b)(12) describes an approach to implementing the 
language of the statutory mandate for operational flexibility. As 
explained in the August 2, 1993 memorandum, EPA interprets the 
regulation and preamble to mean that a State program would be eligible 
for interim approval if it provides for the implementation of any one 
of these three approaches for providing operational flexibility.
    40 CFR 70.4(b)(12)(i) provides for section 502(b)(10) changes. 
Wisconsin's program includes this provision for ``existing'' sources, 
but not for ``new'' or ``modified'' sources. 40 CFR 70.4(b)(12)(ii) 
provides for an optional SIP trading program. Wisconsin's program does 
not currently include this provision, as no SIP trading program exists. 
40 CFR 70.4(b)(12)(iii) provides for trading in the permitted facility 
for the purpose of complying with a federally enforceable emissions cap 
that is established in the permit independent of otherwise applicable 
requirements. Wisconsin's program includes this provision in s.NR 
407.025(2)(a), Wis Adm. Code.
    Wisconsin's program partially includes the first operational 
flexibility provision, and fully includes the third provision. 
Therefore, Wisconsin's operational flexibility provisions substantially 
meet the requirements of part 70, and the program is eligible for 
interim approval. However, EPA is clarifying in the final interim 
approval of Wisconsin's program that the operational flexibility 
deficiency is specific to the requirements of 40 CFR 70.4(b)(12)(i).
7. Denial of Permit Renewal Applications
    Two commenters disagreed with EPA's proposal that, as a condition 
for full approval, Wisconsin's program must provide the authority to 
deny a renewal application for a source that is not in compliance. The 
commenters stated that part 70 does not mandate denial in such a 
circumstance, and Wisconsin should be able to retain its discretion to 
either approve or deny a permit renewal application for a source that 
is not in compliance.
    The EPA agrees with the commenters that the denial of a permit 
renewal application for a source that is not in compliance is a 
discretionary action. As explained in the proposal, however, 
Wisconsin's program is lacking the underlying authority to deny a 
renewal application for a source that is not in compliance. As a 
condition for full approval, Wisconsin's program must include the 
provision that any permit noncompliance is grounds for denial of a 
permit renewal application. This [[Page 12134]] should not be 
interpreted to mean that Wisconsin has no discretion in determining its 
action on individual permit renewal applications for noncomplying 
sources.
8. Reopenings for Cause
    Three commenters disagreed with EPA's proposal that, as a condition 
for full approval, Wisconsin's program must be revised to require 
permits to be reopened for cause under certain circumstances. Some 
commenters noted that the State reopening provisions are structured 
differently than the part 70 reopening provisions. The EPA proposed 
that reopening permits for cause must be mandatory for the following 
State provisions: ss.NR 407.14(1) (b), (c), (d), and (h), Wis. Adm. 
Code.
    One commenter specifically opposed the mandatory reopening 
requirement for s.NR 407.14(1)(b), which provides for reopening to 
assure compliance with applicable requirements. This provision is 
equivalent to 40 CFR 70.7(f)(1)(iv), which requires reopening if the 
permitting authority determines that the permit must be revised to 
assure compliance with applicable requirements. Therefore, s.NR 
407.14(1)(b) must be revised to require reopenings to assure compliance 
with applicable requirements. In addition, the same commenter 
referenced 40 CFR 70.7(f)(1)(i) requirements in the discussion of the 
State's s.NR 407.14(1)(b) requirements. The Federal provisions in (i) 
do not preclude the requirements in (iv).
    The second provision, s.NR 407.14(1)(c), provides for reopening 
when there is a change in any applicable requirement, a new applicable 
requirement, or an additional applicable requirement. This State 
provision includes the provisions of 40 CFR 70.7(f)(1)(i), which 
requires reopening of a permit with a remaining term of 3 or more years 
when additional applicable requirements become applicable. This State 
provision also includes the provisions of 40 CFR 70.7(f)(1)(ii), which 
requires reopening when additional requirements become applicable to an 
affected source under the acid rain program. Therefore, s.NR 
407.14(1)(c) must be revised to require reopenings, in accordance with 
the 3 year requirement under 40 CFR 70.7(f)(1)(i), or the acid rain 
requirements under 40 CFR 70.7(f)(1)(ii), as applicable. The EPA is 
clarifying in the final interim approval of Wisconsin's program that 
s.NR 407.14(1)(c) must be mandatory only to the extent required by 40 
CFR 70.7(f)(1).
    The third provision, s.NR 407.14(1)(d), provides for reopening when 
there is a change in any applicable emission limitation, ambient air 
quality standard, or ambient air quality increment that requires either 
a temporary or permanent reduction or elimination of the permitted 
emission. One commenter specifically opposed the mandatory reopening 
requirement for this State provision, stating that 40 CFR 70.7(f)(1) 
does not establish any requirement that a permit be reopened in 
response to a change in an applicable emission limitation or an air 
quality increment. The EPA disagrees with this comment, as the 
provisions outlined in s.NR 407.14(1)(d) include additional applicable 
requirements that a source may be subject to. Therefore, s.NR 
407.14(1)(d) must be revised to require reopenings, in accordance with 
the 3 year requirement under 40 CFR 70.7(f)(1)(i), or the acid rain 
requirements under 40 CFR 70.7(f)(1)(ii), as applicable. However, EPA 
is clarifying in the final interim approval of Wisconsin's program that 
s.NR 407.14(1)(d) must be mandatory only to the extent required by 40 
CFR 70.7(f)(1).
    The fourth provision, s.NR 407.14(1)(h), provides for reopening 
when a permit contains a material mistake or inaccurate or unclear 
statements. Two commenters specifically opposed the mandatory reopening 
requirement for this State provision, stating that the Wisconsin 
provision is broader than the requirements of 40 CFR 70.7(f)(1)(iii). 
The EPA partially agrees with the commenters. 40 CFR 70.7(f)(1)(iii) 
requires permit reopening when the permitting authority determines that 
the permit contains a material mistake or that inaccurate statements 
were made in establishing the emissions standards or other terms or 
conditions of the permit. The Wisconsin provision is broader because it 
includes ``unclear statements'' in a permit, in addition to material 
mistakes and inaccurate statements. The Wisconsin provision also does 
not limit the ``inaccurate statements'' provision to emissions 
standards or other terms or conditions of the permit. Therefore, EPA is 
clarifying in the final interim approval of Wisconsin's program that 
s.NR 407.14(1)(h) must be mandatory only to the extent required by 40 
CFR 70.7(f)(1).
    One commenter also objected to any revision that would require WDNR 
to mandatorily reopen any operating permit issued to a non-part 70 
source. The EPA's interim approval of Wisconsin's title V operating 
permits program only applies to the State's title V program, and does 
not require the State to revise its operating permits program for non-
part 70 sources.
9. Wisconsin Permitting Exemptions
    Four commenters expressed concerns with EPA's proposal that, as a 
condition for full approval, some of Wisconsin's permitting exemptions 
must be revised to ensure that no part 70 sources are exempted from the 
requirement to obtain an operating permit.
    All four commenters stated that the exemptions and associated 
recordkeeping and reporting requirements adequately limit potential to 
emit for the exempted sources. The EPA disagrees that the exemptions in 
question adequately limit potential to emit. As explained in the 
proposal, these Wisconsin permitting exemptions determine applicability 
based in part or totally on these sources' actual emissions or 
throughput, and the State's recordkeeping requirements do not provide a 
federally enforceable mechanism for limiting these sources' potential 
emissions to the actual emissions levels or throughput established in 
the exemptions. The recordkeeping provisions do not include specific 
emissions accounting requirements, and therefore do not ensure that the 
recordkeeping will be adequate to determine sources' actual emissions. 
In addition, the exemptions do not provide for any reporting 
requirements. Finally, mechanisms to limit potential to emit must be 
based on production or operation limits; emission rates do not 
adequately limit a source's potential to emit.
    WDNR commented that, while it disagrees with EPA's concerns, WDNR 
commits to working with EPA to develop acceptable and practical 
mechanisms to deal with these source categories. The EPA agrees to work 
with WDNR to resolve this interim approval issue, and believes that it 
is important to develop mechanisms to avoid flooding the title V 
program with thousands of small sources that will never emit at part 70 
applicability levels.
    One commenter specifically objected to EPA's concern with ss.NR 
407.03(1) (g) and (h). The commenter appears to be of the opinion that 
these exemptions are based on potential to emit because both exemptions 
include sources that ``will emit not more than 1,666 pounds of organic 
compounds per month''. The EPA disagrees with this interpretation. The 
Wisconsin provision provides an exemption for ``* * * operations which 
emit or will emit not more than 1,666 pounds of organic chemicals per 
month''. While this provision exempts [[Page 12135]] sources that 
``will emit'' at this level, it also exempts sources that ``emit'' at 
this level. A source that has actual emissions of 1,666 pounds of 
organic chemicals per month may have the potential to emit at greater 
amounts, and therefore may be a part 70 source. In addition, the 
commenter noted that these Wisconsin exemptions are based on emissions 
measured prior to entering any emission control devices, while the 
determination of a source's potential to emit may be calculated by 
including air pollution control devices (if enforceable by the 
Administrator). Regardless of this distinction, EPA does not believe 
that the exemptions are based on potential to emit.
    One commenter requested that the exemption in ss.NR 407.03(1)(t) be 
maintained to the extent possible. This provision provides an exemption 
for a combination of specified activities. The exemption is structured 
differently than the other exemptions for which EPA is granting interim 
approval, as it does not attempt to limit sources' potential to emit. 
Instead, this exemption allows combinations of activities to be grouped 
together, and certain combinations could result in emissions that would 
exempt part 70 sources from the permit program. Therefore, Wisconsin 
must revise this exemption to ensure that no part 70 sources are 
exempted. The State will need to determine to what extent this 
exemption can be retained and still ensure that no part 70 sources are 
eligible for the exemption.
10. Source Category Limited Interim Approval
    Two commenters were supportive of EPA's proposed source category 
limited (SCL) interim approval; however, they were concerned that the 
State's current determination that it will not need additional time to 
issue initial permits would require those source categories to submit 
permit applications before the State has fully developed the program 
requirements for these sources. The EPA proposed SCL interim approval 
for Wisconsin for two separate circumstances: for new and modified 
sources that are not in compliance, and for sources belonging to the 
source categories covered by the permitting exemptions in ss.NR 
407.03(1) (d), (g), (h), (o), (s), (sm), and (t).
    The deficiency in Wisconsin's program with respect to new and 
modified sources that are not in compliance relates to the lack of 
State authority to issue permits to such sources. However, the State 
program does require these sources to submit permit applications in 
accordance with the State application schedule. Therefore, these 
sources are already covered by the State program, and are currently 
required to submit applications.
    The deficiency in Wisconsin's program with respect to the 
permitting exemptions relates to the lack of State authority to require 
permits for certain part 70 sources. Therefore, the State may currently 
exempt some part 70 sources. Interim approval requires the State to 
correct this deficiency and submit a corrected program to EPA within 18 
months after the effective date of the interim approval. Once the State 
corrects the deficiency, any part 70 sources which had been exempt will 
be required to obtain an operating permit in accordance with the 
requirements of the State program.
    As stated in the proposal, Wisconsin has not requested additional 
time for issuing initial operating permits because the State intends to 
fix the SCL interim approval deficiencies in time to permit all sources 
within the 3 year phase-in period. In addition, previously exempted 
part 70 sources (if any exist) will be required to submit applications 
within one year of the interim approval effective date. If Wisconsin 
determines that it cannot meet these implementation requirements, SCL 
interim approval does provide that the completion of the initial 
permitting of the SCL sources could occur as late as 5 years after the 
granting of SCL interim approval (the 3 year phase in period plus the 2 
year interim approval). To obtain this extension, Wisconsin would have 
to submit a request to EPA that includes compelling reasons why the 
additional time is needed. For additional discussion of this issue, 
including the specific requirements for a state's extension request, 
refer to the August 2, 1993 memorandum entitled, ``Interim Title V 
Program Approvals,'' signed by John Seitz, Director of the Office of 
Air Quality Planning and Standards.
11. Proposed Part 70 Rules
    One commenter submitted comments it had previously filed on the 
proposed part 70 rule, and stated that it objected to interim approval 
of Wisconsin's operating permits program for the same reasons it had 
objected to the part 70 rule itself. The EPA believes the appropriate 
forum for pursuing objections to the legal validity of the part 70 rule 
is through a petition for review of the rule brought in the D.C. 
Circuit Court of Appeals. The EPA notes that this commenter has filed 
such a petition. However, unless and until the part 70 rule is revised, 
EPA must evaluate programs according to the rule that is in effect.
12. Particulate Matter (PM) Issues
    One commenter raised several issues regarding PM that were not 
relevant to EPA's proposed interim approval of Wisconsin's operating 
permits program. Therefore, EPA is not addressing these comments in the 
final action on Wisconsin's program.

B. Final Action

    The EPA is promulgating interim approval of the operating permits 
program submitted by the State of Wisconsin on January 27, 1994. The 
scope of Wisconsin's part 70 program approved in this notice applies to 
all part 70 sources within Wisconsin, except for tribal lands in the 
manner described previously in this notice. 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).
    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, as required by 40 CFR 70.4(b)(12)(i), 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 include this requirement for 
``existing sources'' (as defined by s.144.30(13)). 40 CFR 
70.4(b)(12)(i) is required to 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 [[Page 12136]] 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, 
and the conditions meet the requirements of 40 CFR 70.7(f)(1), 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.
    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 part 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 a 
federally enforceable mechanism for limiting these sources' potential 
emissions to the actual emissions levels or throughput established in 
the exemptions.
    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 granting source 
category limited interim approval to Wisconsin's operating permit 
program. See 57 FR 32270 (July 21, 1992). Therefore, EPA is not 
including ``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.
    This interim approval, which may not be renewed, extends until 
April 7, 1997. During this interim approval period, Wisconsin is 
protected from sanctions, and EPA is not obligated to promulgate, 
administer and enforce a Federal operating permits program for 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 the 
effective date of this interim approval, as does the 3-year time period 
for processing the initial permit applications.
    If the State of Wisconsin fails to submit a complete corrective 
program for full approval by October 7, 1996, EPA will start an 18-
month clock for mandatory sanctions. If the State of Wisconsin then 
fails to submit a corrective program that EPA finds complete before the 
expiration of that 18-month period, EPA will be required to apply one 
of the sanctions in section 179(b) of the Act, which will remain in 
effect until EPA determines that Wisconsin has corrected the deficiency 
by submitting a complete corrective program. Moreover, if the 
Administrator finds a lack of good faith on the part of the State of 
Wisconsin, both sanctions under section 179(b) will apply after the 
expiration of the 18-month period until the Administrator determines 
that Wisconsin has come into compliance. In any case, if, 6 months 
after application of the first sanction, Wisconsin still has not 
submitted a corrective program that EPA has found complete, a second 
sanction will be required.
    If EPA disapproves the State of Wisconsin's complete corrective 
program, EPA will be required to apply one of the section 179(b) 
sanctions on the date 18 months after the effective date of the 
disapproval, unless prior to that date Wisconsin has submitted a 
revised program and EPA has determined that it corrected the 
deficiencies that prompted the disapproval. Moreover, if the 
Administrator finds a lack of good faith on the part of Wisconsin, both 
sanctions under section 179(b) shall apply after the expiration of the 
18-month period until the Administrator determines that the State has 
come into compliance. In all cases, if, 6 months after EPA applies the 
first sanction, Wisconsin has not submitted a revised program that EPA 
has determined corrects the deficiencies, a second sanction is 
required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the expiration of an interim approval period if the 
State has not timely submitted a complete corrective program or EPA has 
disapproved its submitted corrective program. Moreover, if EPA has not 
granted full approval to Wisconsin's program by the expiration of this 
interim approval and that expiration occurs after November 15, 1995, 
EPA must promulgate, administer and enforce a Federal permits program 
for the State of Wisconsin upon expiration of interim approval.
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
section [[Page 12137]] 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 promulgating 
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.
    The EPA is also promulgating approval of 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) to the extent necessary during 
the transition period between promulgation of the Federal section 
112(g) rule and adoption of any necessary State rules to implement 
EPA's section 112(g) regulations. However, since the approval is for 
the single purpose of providing a mechanism to implement section 112(g) 
during the transition period, the approval itself will be without 
effect if EPA decides in the final section 112(g) rule that sources are 
not subject to the requirements of the rule until State regulations are 
adopted. 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. The duration of this 
approval is limited to 18 months following promulgation by EPA of 
section 112(g) regulations, to provide Wisconsin adequate time for the 
State to adopt regulations consistent with the Federal requirements.

III. Administrative Requirements

A. Official File

    Copies of the State's submittal and other information relied upon 
for the final interim approval, including public comments on the 
proposal received and reviewed by EPA, are maintained in the official 
file at the EPA Regional Office. The file is an organized and complete 
record of all the information submitted to, or otherwise considered by, 
EPA in the development of this final interim approval. The official 
file is available for public inspection at the location listed under 
the ADDRESSES section of this document.

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    The EPA's actions under section 502 of the Act do not create any 
new requirements, but simply address operating permits programs 
submitted to satisfy the requirements of 40 CFR part 70. Because this 
action does not impose any new requirements, it does not have a 
significant impact on a substantial number of small entities.

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: February 23, 1995.
Robert Springer,
Acting Regional Administrator.

    Part 70, title 40 of the Code of Federal Regulations is amended as 
follows:

PART 70--[AMENDED]

    1. The authority citation for part 70 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

    2. Appendix A to part 70 is amended by adding the entry for 
Wisconsin in alphabetical order to read as follows:

Appendix A to Part 70--Approval Status of State and Local Operating 
Permits Programs

* * * * *

Wisconsin

    (a) Department of Natural Resources: submitted on January 27, 
1994; interim approval effective on April 5, 1995; interim approval 
expires April 7, 1997.
    (b) Reserved
* * * * *
[FR Doc. 95-5403 Filed 3-3-95; 8:45 am]
BILLING CODE 6560-50-P