12128 Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations

(I) TNRCC Order No. 94–17 for

Merichem Company, as adopted by the

TNRCC on June 29, 1994.

(J) TNRCC Order No. 94–18 for Mobil

Mining and Minerals Company, as

adopted by the TNRCC on June 29,

1994.

(K) TNRCC Order No. 94–19 for

Phibro Energy USA, Inc., as adopted by

the TNRCC on June 29, 1994.

(L) TNRCC Order No. 94–20 for Shell

Chemical and Shell Oil, as adopted by

the TNRCC on June 29, 1994.

(M) TNRCC Order No. 94–21 for Shell

Oil Company, as adopted by the TNRCC

on June 29, 1994.

(N) TNRCC Order No. 94–22 for

Simpson Pasadena Paper Company, as

adopted by the TNRCC on June 29,

1994.

(ii) Additional material.

(A) May 27, 1994, letter from Mr.

Norman D. Radford, Jr. to the TNRCC

and the EPA Region 6 requesting

approval of an equivalent method of

monitoring sulfur in fuel and an

equivalent method of determining

compliance.

(B) June 28, 1994, letter from Anthony

C. Grigsby, Executive Director, TNRCC,

to Crown Central Petroleum

Corporation, approving an alternate

monitoring and compliance

demonstration method.

(C) June 28, 1994, letter from Anthony

C. Grigsby, Executive Director, TNRCC,

to Exxon Company USA, approving an

alternate monitoring and compliance

demonstration method.

(D) June 28, 1994, letter from Anthony

C. Grigsby, Executive Director, TNRCC,

to Lyondell Citgo Refining Co., LTD.,

approving an alternate monitoring and

compliance demonstration method.

(E) June 28, 1994, letter from Anthony

C. Grigsby, Executive Director, TNRCC,

to Phibro Energy, USA, Inc., approving

an alternate monitoring and compliance

demonstration method.

(F) June 28, 1994, letter from Anthony

C. Grigsby, Executive Director, TNRCC,

to Shell Oil Company, approving an

alternate monitoring and compliance

demonstration method.

(G) June 8, 1994, letter from Mr. S. E.

Pierce, Mobil Mining and Minerals

Company, to the TNRCC requesting

approval of an alternative quality

assurance program.

(H) June 28, 1994, letter from Anthony

C. Grigsby, Executive Director, TNRCC,

to Mobil Mining and Minerals

Company, approving an alternative

quality assurance program.

(I) August 3, 1994, narrative plan

addressing the Harris County Agreed

Orders for SO2, including emission

inventories and modeling analyses (i.e.

the April 16, 1993, report entitled

‘‘Evaluation of Potential 24-hour SO2

Nonattainment Area in Harris County,

Texas–Phase II’’ and the June, 1994,

addendum).

(J) TNRCC certification letter dated

June 29, 1994, and signed by Gloria

Vasquez, Chief Clerk, TNRCC.

[FR Doc. 95–5352 Filed 3–3–95; 8:45 am]

BILLING CODE 6560–50–F

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.

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
Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations 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 offreservation 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 onreservation 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 nonIndians, 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 § 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
12130 Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations

1EPA’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.

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 nonIndian 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

§ 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).1

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 nonIndian 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
Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations 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-togovernment’’ 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 selfgovernment 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 EPAapproved 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 nonuniform, 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
12132 Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations

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
Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations 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
12134 Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations

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
Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations 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
12136 Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations

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
Federal Register / Vol. 60, No. 43 / Monday, March 6, 1995 / Rules and Regulations 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

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 32, 36 and 65

[CC Docket No. 93–50; FCC 95–56]

Accounting and Rate Treatment of

Allowance for Funds Used During

Construction (‘‘AFUDC’’) and

Telephone Plant Under Construction

(‘‘TPUC’’)

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The Commission has adopted

a report and order to amend its rules

regarding the accounting and

ratemaking treatment for TPUC and

interest costs incurred to finance

construction projects. This action is to

make FCC rules consistent with

generally accepted accounting

principles and as fair and reasonable as

possible for ratemaking purposes.

EFFECTIVE DATE: September 6, 1995.

FOR FURTHER INFORMATION CONTACT:

Kim Yee, Common Carrier Bureau,

Accounting and Audits Division, (202)

418–0810.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Report

and Order in CC Docket No. 93–50,

adopted February 13, 1995 and released

February 28, 1995. The complete text of

this Report and Order is available for

inspection and copying during normal

business hours in the FCC Dockets

Branch (Room 230), 1919 M Street NW.,

Washington, DC, and may also be

purchased from the Commission’s copy

contractor, International Transcription

Service, Inc., at 2100 M Street, NW.,

Suite 140, Washington, DC 20037, or

call (202) 857–3800.

Synopsis of Report and Order

1. This Report and Order amends Part

32, Uniform Systems of Accounts, and

65, Interstate Rate of Return Prescription

Procedures and Methodologies, with

respect to the proper accounting and

ratemaking treatment for telephone

plant under construction and allowance

for funds used during construction.

2. Specifically, this Report and Order

amended Part 32 to require carriers to

capitalize AFUDC for both short-term

and long-term TPUC using a

capitalization rate based on the carrier’s

average cost of debt. It amended Part 65

to include the interstate portion of the

TPUC balances in the interstate rate

base and to require carriers to reduce

their interstate revenue requirement by

the amount of AFUDC capitalized in the

current year.