34202 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Parts 9, 55 and 71

[FRL–5526–7]

RIN 2060–AD68

Federal Operating Permits Program

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: This action promulgates

regulations setting forth the procedures

and terms under which the

Administrator will administer programs

for issuing operating permits to covered

stationary sources, pursuant to title V of

the Clean Air Act as amended in 1990

(Act). Although the primary

responsibility for issuing operating

permits to such sources rests with State,

local, and Tribal air agencies, EPA will

remedy gaps in air quality protection by

administering a Federal operating

permits program in areas lacking an

EPA-approved or adequately

administered operating permits

program. Federally issued permits will

clarify which requirements apply to

sources and will enhance understanding

of and compliance with air quality

regulations.

EFFECTIVE DATE: July 31, 1996.

FOR FURTHER INFORMATION CONTACT:

Candace Carraway (telephone 919–541–

3189) or Kirt Cox (telephone 919–541–

5399), U. S. Environmental Protection

Agency, Office of Air Quality Planning

and Standards, Information Transfer

and Program Integration Division, Mail

Drop 12, Research Triangle Park, North

Carolina 27711.

SUPPLEMENTARY INFORMATION:

Docket

Supporting information used in

developing the promulgated rules is

contained in Docket No. A–93–51.

Supporting information used in

developing 40 CFR part 70 is contained

in Dockets No. A–90–33 and No. A–93–

50. These dockets are available for

public inspection and copying between

8:30 a.m. and 3:30 p.m. Monday through

Friday at EPA’s Air Docket, Room M–

1500, Waterside Mall, 401 M Street SW,

Washington, D.C. 20460. A reasonable

fee may be charged for copying.

Background Information Document

A background information document

(BID) for the promulgated rule may be

obtained from the docket. Please refer to

‘‘Federal Operating Permits Program -

Response to Comments.’’ The BID

contains a summary of the public

comments made on the proposed

Federal Operating Permits Program rule

and EPA responses to the comments.

Regulated Entities

Entities potentially regulated by this

action are major sources, affected

sources under title IV of the Act (acid

rain sources), solid waste incineration

units required to obtain a permit under

section 129 of the Act, and those areas

sources subject to a standard under

section 111 or 112 of the Act which

have not been exempted or deferred

from title V permitting requirements.

Regulated categories and entities

include:

Category Examples of regulated entities

Industry Major sources under title I or section 112 of the Act; affected

sources under title IV of the Act

(acid rain sources); solid waste

incineration units required to

obtain a permit under section

129 of the Act; area sources

subject to new source performance standards or national

emission standards for hazardous air pollutants that are not

exempted or deferred from permitting requirements under title

V.

This table is not intended to be

exhaustive, but rather provides a guide

for readers regarding entities likely to be

regulated by this action. This table lists

the types of entities that EPA is now

aware could potentially be regulated by

this action. Other types of entities not

listed in the table could also be

regulated. To determine whether your

facility is regulated by this action, you

should carefully examine the

applicability criteria in section 71.3(a)

of the rule. If you have questions

regarding the applicability of this action

to a particular entity, consult the person

listed in the preceding FOR FURTHER

INFORMATION CONTACT section or the EPA

Regional Office that is administering the

part 71 permit program for the State or

area in which the relevant source or

facility is located.

Outline. The information presented in

this preamble is organized as follows:

I. Background

II. Summary of Promulgated Rule

III. Significant Changes to the Proposed Rule

IV. Administrative Requirements

A. Docket

B. Executive Order 12286

C. Regulatory Flexibility Act

D. Paperwork Reduction Act

E. Unfunded Mandates Reform Act

I. Background

A. Background of EPA’s Development of

the Proposed Part 71 Rule

Title V of the Act requires that if a

permits program meeting the

requirements of title V has not been

approved for any State by November 15,

1995, EPA must promulgate, administer,

and enforce a Federal title V program for

that State (42 U.S.C. section

7661a(d)(3)). Thus, from the date of

enactment of the 1990 Amendments to

the Act, EPA was subject to a 5-year

deadline to establish a Federal program

for States that do not obtain EPA

approval of their State programs within

that time. The Act had also placed EPA

under a 1-year deadline to promulgate

regulations establishing the minimum

elements of approvable State permit

programs (42 U.S.C. section 7661a(b)).

The EPA promulgated its regulations

establishing these criteria, codified at 40

CFR part 70 (the part 70 rule), on July

21, 1992 (57 FR 32250). States were then

to submit their title V programs for EPA

review by November 15, 1993, and EPA

was to approve or disapprove those

submitted programs within 1 year of

receiving them (42 U.S.C. section

7661a(d)(1)). Thus, under the temporal

scheme of title V, EPA was to approve

or disapprove timely submitted State

title V programs by November 15, 1994,

exactly 1 year before EPA’s duty to

establish a Federal program for

unapproved States would ripen.

Almost immediately upon

promulgation of part 70, numerous

industry, State and local government,

and environmentalist petitioners

challenged EPA’s final rule in litigation

in the Court of Appeals. See Clean Air

Implementation Project v. EPA, No. 92–

1303 (D.C. Cir.). Petitioners identified

dozens of issues to which they objected

in the part 70 rule, and EPA decided to

conduct broad-based settlement

discussions with all petitioners

concerning these issues. These

discussions occurred for over a year

following the commencement of the

litigation, and resulted in EPA, with the

consultation of all of the litigants,

developing proposed revisions to many

provisions in the part 70 rule. These

provisions mainly concerned the

flexibility provisions of part 70, which

governed when permits would need to

be revised to reflect changes in

operation at sources, and the procedures

by which permits would be revised. On

August 29, 1994, EPA published

proposed substantial revisions to part 70

reflecting the outcome of these

discussions (59 FR 44460) (hereafter

‘‘August 1994 proposed revisions to part

70’’). That proposal reflected EPA’s
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34203

most current thinking at the time

concerning the proper implementation

of title V, and departed in numerous

respects from positions taken in the

existing promulgated part 70 rule.

When EPA began developing part 71

in the fall of 1993, settlement

discussions concerning part 70 were

still ongoing and were yielding what

appeared to be fruitful results. The

Agency believed at the time that any

needed revisions to part 70 would be

finalized well in advance of the

deadline for establishing any necessary

Federal programs, and so decided to

develop part 71 based on contemplated

proposed revisions to part 70, as EPA

wished to model part 71 on its longterm implementation goals for title V,

rather than on provisions of a part 70

rule that EPA did not believe would

remain as promulgated in the current

rule.

When EPA published its proposed

revisions to part 70 in August 1994, the

Agency still believed that the revisions

would be finalized in time for EPA to

base its part 71 Federal program rule on

the revised part 70. Consequently, when

EPA published its proposed part 71

regulations on April 27, 1995, the

proposal was based on the August 1994

proposed revisions to part 70 (60 FR

20804; hereafter, ‘‘part 71 proposal’’).

The part 71 proposal thus contained

provisions concerning critical

definitions under title V, the scope of

applicability of the program to sources,

requirements governing applications

and permit content, and, most

significantly, operational flexibility and

permit revisions that departed from the

current part 70 rule’s corresponding

provisions. In the proposal notice, the

Agency specifically solicited comment

on whether the Agency had

appropriately based part 71 upon the

relevant provision of the existing part 70

rule and the recently proposed revision

to part 70. See 60 FR at 20805.

At the time of proposal of part 71, the

Agency was aware of many adverse

comments on the August 1994 proposed

revisions to part 70, and EPA had

engaged in discussions with

stakeholders to obtain recommendations

for publishing a supplemental proposal

to revise the flexibility provisions of

part 70. See 60 FR at 20805, 20817. The

part 71 proposal notice indicated that

the Agency believed it might not be

possible to promulgate final permit

revision procedures for part 71, in light

of the ongoing discussions to develop

part 70 permit revision procedures in

time to meet the statutory deadline for

establishing Federal programs in States

lacking approved part 70 programs. As

a result, the notice suggested that EPA

may have to finalize the part 71 rule in

two phases, the first without any

provisions for revising permits, which

would be addressed in a later

supplemental proposal. Id. Indeed,

EPA’s supplemental proposal for both

parts 70 and 71, published on August

31, 1995, described how part 71’s future

permit revision procedures would be

modelled upon the part 70 procedures

for permit revisions proposed in that

notice (60 FR 45530; hereafter, ‘‘August

1995 supplemental proposal’’).

B. The Need for Part 71 To Facilitate

Transition

In the part 71 proposal notice, EPA

stressed the need for implementation of

part 71 to facilitate a smooth transition

to State implementation of title V

through approved part 70 programs. See

60 FR at 20805, 20816. The EPA

continues to believe that Congress

envisioned that States would have

primary responsibility for implementing

title V, just as they do for implementing

much of the rest of the Act. See, for

example, section 101(a)(3) of the Act, in

which Congress found that air pollution

prevention and air pollution control at

its source is the primary responsibility

of States and local governments (42

U.S.C. section 7401(a)(3)). Note also that

under title V of the Act, Congress gave

States the initial opportunity to develop

and administer title V programs, while

directing EPA to function as a backstop

if States are unable to adopt provisions

under State law to take on title V

responsibilities, rather than directing

EPA to establish the Federal program

first and then allowing States to apply

to take over title V administration, as

under prior permitting programs such as

the prevention of significant

deterioration (PSD) and the national

pollutant discharge elimination system

(NPDES) under the Clean Water Act.

The EPA believes that granting States

primary responsibility to implement

title V makes good policy sense. States

are far better positioned than EPA to

administer permitting programs

covering their resident sources for

several reasons. First, States are more

familiar with the operational

characteristics of resident sources, and

with the applicable requirements to

which they are subject. In having had

the lead on developing State

implementation plans (SIP’s) and

implementing other provisions of the

Act that apply to these sources, States

have developed substantial expertise in,

among other things, running air permit

programs that govern new construction

and changes in emissions of air

pollutants such as the new source

review (NSR) and PSD programs. States

have developed enforcement programs

based on this structure, and are able to

coordinate their permitting programs

with the goals and needs of their overall

air pollution control programs. Finally,

compared to EPA Regional offices,

States are simply closer to their sources,

have greater resources, and are better

able to respond to the regulated

community and its needs for

expeditious permit processing.

In light of this, EPA has repeatedly

stated its belief that federallyimplemented part 71 programs would

be of short duration, lasting only until

the few remaining States that have not

developed approvable part 70 programs

are able to submit title V programs that

meet the requirements of the Act. Rather

than viewing part 71 only as a means of

exerting leverage in States that have not

yet adopted adequate part 70 programs,

EPA has also viewed part 71 as an

opportunity to aid States in taking up

responsibility to implement title V. To

this end, EPA has attempted to structure

the rule so that States in which part 71

programs are established will be able to

use the program as an aid to adopting

and implementing their own part 70

programs. For example, today’s rule

provides that States can take delegation

of administration of the Federal program

in their States. If a State that for

whatever reason has not been successful

in developing its own statutes and

regulations to implement title V is

nevertheless capable of running a

Federal program, EPA sees no reason

not to offer the State the opportunity to

more efficiently run the permit program

than EPA believes the Agency could.

The EPA also believes that the

experience of running the Federal

program may assist States in

overcoming any remaining hurdles that

have so far prevented them from

adopting adequate title V programs

under State law.

C. Basing Part 71 on the Part 70

Program

In the part 71 proposal notice, EPA

stated its view that it is appropriate to

model part 71 procedures on those

required by part 70, in order to promote

national consistency between title V

programs that are administered

throughout the country. See 60 FR at

20816. Such national consistency would

ensure that sources are not faced with

substantially different programs simply

because EPA, as opposed to State

agencies, is the relevant title V

permitting authority, would promote

uniformity in affected State and public

participation, and would provide a level

playing field for sources. Basing part 71

on part 70 would also encourage States
34204 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

that are still developing their title V

programs to take delegation of the part

71 program, as it would be more

consistent with the programs they are

preparing to implement under State law.

States taking delegation would in turn

ensure smoother transition to State

administration of part 70 programs, as

sources would have already become

familiar with the State as the title V

permitting authority and would not

need to restart their permit application

process anew when the State program

receives EPA approval.

Since at the time the part 71 proposal

was being developed it appeared to EPA

that part 70 would soon be revised in

many significant respects, EPA chose to

base the proposal upon the recent

proposed revisions to part 70, rather

than on the existing promulgated rule.

This was due in part to the fact that the

August 1994 proposed revisions to part

70 addressed a number of basic issues

under title V that necessarily would

govern how those issues are addressed

in part 71 (such as the definition of

major source and the necessary

provisions to implement section

502(b)(10) of the Act), and in part to the

Agency’s wish to provide in the Federal

rule many of the benefits of the August

1994 proposed revisions to part 70. As

noted above, however, EPA specifically

asked commenters to address whether

EPA had inappropriately either

followed or departed from the

approaches taken in both the current

part 70 rule and its proposed revisions.

Echoing their comments on the

August 1994 proposed revisions to part

70, industry commenters unanimously

argued that the permit revisions

procedures contained in the part 71

proposal were too complex and

confusing and would hinder sources’

abilities to make rapid changes in

response to market needs. In addition,

most industry commenters presented

three general arguments in response to

EPA’s proposal to establish a uniform

national part 71 rule based on the

August 1994 proposed revisions to part

70. The first type of argument was that

EPA should not promulgate a uniform

national part 71 rule at all, but rather

should develop part 71 programs caseby-case, taking into account the specific

characteristics of the State’s existing air

program, and basing the State’s part 71

program as much as possible on the

State’s part 70 program that it has

developed to date and that EPA had not

found to be inadequate. According to

this argument, the best way to facilitate

transition from Federal to State

implementation of title V is to make

sure the Federal and State programs are

virtually identical in each relevant

State, even if that means the Federal

programs would differ from State to

State. It would follow that EPA should

approve whatever adequate elements a

State had adopted for its title V

program, and then only fill the

remaining gaps with Federal provisions

as necessary. This argument also held

that section 502 of the Act actually

requires a case-by-case approach to

developing part 71 programs for States,

and that the Act does not authorize EPA

to promulgate a nationally uniform rule.

While EPA agrees that in theory the

smoothest transition from Federal to

State implementation might occur

where the Federal program is identical

to the State’s, the Agency does not agree

that it is inappropriate to promulgate a

nationally uniform rule for part 71. At

the outset, EPA disagrees with the

assertion that the Agency lacks legal

authority to establish a nationally

uniform rule for part 71. While section

502(d)(3) of the Act does require EPA to

promulgate, administer and enforce a

title V program ‘‘for’’ any State that does

not obtain part 70 approval, 42 U.S.C.

section 7661a(d)(3), that language does

not compel a separate State-by-State

approach to establishing a Federal title

V program; nor does it compel a Federal

program that is based on the State’s

existing but as yet unapproved State

program. Indeed, EPA would be hardpressed to base a Federal program on a

State program where no State program

has ever been adopted or submitted for

EPA evaluation. Even if a State had

adopted and submitted a program, EPA

stresses that the Agency can only

evaluate the adequacy of State programs

through notice and comment

rulemaking, which might not occur

before a Federal program is due. The

EPA believes Congress must have

recognized the possibility that EPA

would be called upon to establish a

Federal program even where a State has

never adopted any State program of its

own or where a program had not been

submitted in time for EPA to find it

adequate; in such situations, it would be

impossible for EPA to base the Federal

program on the State’s. The EPA also

believes that the resource burden of

establishing and implementing different

case-by-case programs for States would

overwhelm EPA Regional offices and

establishing a generic template for part

71 is a far more efficient use of Agency

resources to get the Federal program up

and running. The EPA has consequently

concluded that a nationally uniform

regulation is necessary for purposes of

carrying out the Agency’s functions

under title V. Section 301(a)(1) of the

Act authorizes EPA to prescribe such

regulations as are necessary to carry out

the Administrator’s functions under the

Act (42 U.S.C. section 7601(a)(1)). Thus,

EPA believes it has ample statutory

authority to establish the most efficient

and nationally consistent part 71

regulation possible. Finally, EPA notes

that EPA’s other permitting programs

under its environmental statutes, such

as the NPDES program and the PSD

program, are governed by nationally

uniform regulations, implementation of

which have been very successful. The

EPA sees no reason to depart from this

established approach for purposes of

running Federal title V programs,

especially since Congress clearly did

anticipate that EPA would first address

title V through establishing regulations

that would govern the minimum

elements of title V programs to be

administered by any air pollution

control agency. See section 502(b) of the

Act, 42 U.S.C. section 7661a(b).

The second type of industry argument

in response to basing the part 71

proposal on the proposed revisions to

part 70 stressed that EPA should delay

promulgation of any part 71 rule until

the revisions to part 70 are finalized.

This argument pointed out that

promulgating part 71 based on the

August 1994 proposed revisions to part

70 would result in the part 71 rule being

based on an approach that the Agency

itself had begun to revise in developing

the supplemental proposed revisions to

part 70 (which were eventually

published just 4 months after the date

of the part 71 proposal). The argument

noted that since EPA is envisioning

substantial changes to the part 70 rule,

the part 71 rule should not finalize title

V issues that will remain in transition

until the part 70 rule is finally revised.

This argument also specifically

responded adversely to EPA’s statement

in the proposal that it may be necessary

to split finalization of part 71 into two

phases in which the operational

flexibility and permit revision

procedures would remain reserved until

a second phase. In the view of these

commenters, such provisions are critical

components of any part 71 rule that is

adopted, and it would not be

appropriate to leave them out of part 71

for any unspecified time. This argument

also stated that finalizing part 71 now

based upon the proposed revisions to

part 70 would actually impede

transition to approved State part 70

programs, since the Federal program,

and the approved State program based

on the current part 70 that replaces it,

would take very different approaches to

such fundamental issues as applicability

of the program, operational flexibility
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34205

and permit revision procedures. Finally,

this argument offered a theory that title

V actually does not require EPA to

adopt part 71 programs for States until

May 15, 1997; under this theory, a

commenter argued that the Act actually

gives States until May 15, 1995, rather

than November 15, 1993, to submit

initial title V programs, since States

have 18 months following the first ‘‘due

date’’ to submit any remedies to

deficient programs and avoid sanctions

that would fall after that 18-month

period. The commenter would interpret

the date on which the 18-month period

expires as the date referred to in section

502(d)(3) and argues that EPA is not

required to promulgate a Federal

program until 2 years after the

expiration of the 18-month period.

First, EPA is not persuaded by the

commenter’s argument that part 71

programs are not due until May 15,

1997. Section 502(d)(1) of the Act

clearly provides that States are to

submit their title V programs ‘‘[n]ot later

than 3 years after the date of enactment

of the Clean Air Act Amendments of

1990,’’ 42 U.S.C. section 7661a(d)(1),

which occurred on November 15, 1990.

Moreover, section 502(d)(3) clearly

refers to ‘‘the date required for

submission of such a program under

paragraph (1) (of section 502),’’ 42

U.S.C. section 7661a(d)(3), as the trigger

for the 2-year period after which EPA

must establish Federal programs. There

is no reference to any 18-month graceperiod in section 502(d)(3), and EPA

disputes the assertion that the date on

which a sanctions clock expires under

section 502(d)(2) can be viewed as the

‘‘real’’ deadline for submission of State

programs in the face of the plain

language of section 502(d)(1) and

section 502(d)(3)’s reference to the

deadline in section 502(d)(1). Thus,

while EPA is sympathetic to concerns

that finalizing part 71 in advance of the

Agency finally revising part 70 could

result in the Agency promulgating

provisions that are essentially moving

targets in the Federal rule, EPA does not

believe it has the authority to delay

issuance of part 71 beyond the deadline

prescribed by Congress. Moreover, as a

policy matter, EPA believes it is

necessary to put part 71 in place to aid

States that to date have unsuccessfully

struggled to develop approvable title V

programs, as it is a potential vehicle for

State administration of title V (through

delegation of part 71) even where

obstacles remain that block certain

States from obtaining part 70 approval.

The EPA does not believe that the

environmental benefits of title V should

be delayed simply due to the fact that

some States have not been successful at

developing title V programs. Moreover,

EPA does not feel it would be

appropriate to attempt to justify

delaying promulgation and

implementation of the Federal program

because of the continuing difficulties in

revising the part 70 rule. However, EPA

is persuaded by commenters that the

part 71 rule should not contain gaps to

be filled in at a second stage for

provisions for operational flexibility and

permit revisions, and is sympathetic to

concerns that basing these provisions on

the August 1994 proposed revisions to

part 70 might even interfere with

transition to State programs approved

under the current part 70 rule. These

latter points are discussed in more

detail below.

The third general type of industry

argument in response to basing part 71

on the August 1994 proposal was that if

EPA must establish a Federal program

now, it should do so based on the

existing part 70 rule, and revise the

program later when part 70 is revised.

This argument recognized that EPA may

simply be unable in certain cases to base

a State-specific part 71 program on an

existing State program, but stressed the

fact that any program that the State is

still struggling to adopt would be based

on the existing part 70 rule, rather than

on the proposed revisions thereto. The

argument pointed out the fact that under

the August 1994 proposed revisions to

part 70, EPA planned to allow States

several years following final

promulgation before States would be

expected to implement new part 70

programs based on the revised rule.

Thus, commenters observed, States

would likely be developing and

implementing part 70 programs based

on the July 1992 rule for considerable

time. In light of this, it would actually

interfere with smooth transition from

Federal to State implementation to base

part 71 on the future part 70 rule,

especially in light of the fact that at this

point how part 70 will be ultimately

revised is only speculative; rather,

transition could be facilitated only

where the Federal rule resembles the

model that the State rule is expected to

follow. States might be less inclined to

take delegation of a Federal rule that

does not resemble existing part 70 and

the State analogues that are being

developed, and thus sources would be

more likely to be faced with different

permitting authorities under part 71 and

part 70 programs. Moreover, the

relevant guidance that EPA had issued

to date to aid implementation of the

current rule, such as the Agency’s

‘‘White Paper for Streamlined

Development of Part 70 Permit

Applications’’ (herein referred to as the

‘‘first white paper’’) and the March 5,

1996 guidance document entitled

‘‘White Paper Number 2 for Improved

Implementation of the Part 70 Operating

Permits Program, could be less valuable

as an aid in implementing a Federal rule

that is not based on the current part 70,

and both sources and part 71 permitting

authorities could be forced to start

somewhat from scratch in implementing

the program.

The EPA agrees that the most

appropriate course of action is to

promulgate, on an interim basis, part 71

based on the current part 70 rule. In

reaching this conclusion, EPA was

persuaded by concerns about impeding

transition to part 70 approval under the

current rule and by industry concerns

about issuing a rule containing gaps

regarding operational flexibility and

permit revisions. Moreover, as many

issues in part 70 are still outstanding

following the August 1994 and August

1995 proposals, and as many of those

issues concern key definitions and

procedures under title V, it would be

premature for EPA to finalize part 71

based upon the proposed revisions to

part 70 until it makes final decisions on

these issues in part 70. Thus, the only

way EPA can fulfill its mandate to step

in as the title V permitting authority for

States that have not obtained part 70

approval at this time, and to do so by

establishing a complete part 71 program

that provides the flexibility needed by

industry and mandated by title V, is to

promulgate the rule based upon the

current part 70 regulation. The EPA

stresses, however, that by finalizing this

interim approach in part 71, the Agency

does not preclude itself from revising

part 71 in the future as based on

appropriate aspects of either the August

1994, April 1995, or August 1995

proposals for parts 70 and 71. In fact,

EPA intends to issue a second round of

final rulemaking for part 71 (hereafter

‘‘phase II rulemaking) in the future once

the Agency has resolved with relevant

stakeholders the outstanding issues and

is prepared to promulgate final revisions

to part 70. As a general matter, EPA

stresses that the most current reflection

of the Agency’s intended policy

regarding many of these provisions is

the August 31, 1995 supplemental

proposal. Consequently, while the

provisions adopted today in part 71 that

relate to outstanding issues under the

definitions, applicability, permit

application, permit content, permit

revisions and reopenings, and affected

State and EPA review sections are

consistent with the corresponding
34206 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

provisions in the existing part 70 rule,

rather than with provisions in the

proposals mentioned above, it should be

expected that EPA will issue a second

final rulemaking, without a second

round of proposal, to conform part 71 to

the revised part 70 rule when the

Agency is prepared to issue it.

The EPA believes that this approach

is a logical outgrowth of the part 71

proposal issued in April 1995. While

that proposal only contained regulatory

provisions based on the August 1994

proposed revisions to part 70, EPA

explicitly solicited comment on whether

the proposal was in any way

inappropriately inconsistent with the

current part 70 rule. Clearly, the

commenters noted such inconsistencies,

and the proposal facilitated meaningful

comment on what approach the Agency

should take in promulgating part 71 visa-vis the outstanding issues in the part

70 revision process. As discussed above,

the proposal enabled industry

commenters to fall into three basic

categories in response to the proposal—

in fact, many commenters advanced

more than one of the basic types of

arguments in their comments, realizing

that the different arguments might have

different force depending upon the

extent to which States had actually

developed and submitted their own

programs. The approach adopted today

was urged by numerous industry

commenters as the most reasonable in

light of the need to issue a part 71

program now, as opposed to leaving

gaps to be filled in later at a second

stage of final rulemaking. In addition,

today’s rule is consistent with the

existing part 70 rule under which States

continue to submit programs, and under

which EPA continues to approve those

programs. Thus, EPA does not believe

that a second round of proposed

rulemaking is necessary before

finalizing part 71 to conform to the

Agency’s currently effective regulation

implementing title V, part 70.

In the following sections of this

notice, the specific provisions that are

being finalized based upon current part

70 rather than upon the provisions of

the part 71 proposal are identified and

further discussed. For each of them, the

general governing principle is that while

the Agency has proposed to revise part

70 to modify many of the provisions

corresponding to the part 71 provisions

adopted today, EPA is not yet prepared

to adopt final positions on those issues

and so, in the interests of promoting

smooth transition from Federal to State

implementation of title V, is choosing to

issue, on an interim basis, a part 71 rule

that matches as closely as possible the

existing part 70 rule. The EPA’s

finalization of those provisions today in

no way reflects the Agency’s ultimate

decision to renounce any of the

positions articulated in the proposed

revisions to part 70 or the corresponding

proposals for part 71.

II. Summary of Promulgated Rule

A. Applicability

The Federal operating permits

program requires all part 71 sources to

submit permit applications to the

permitting authority no later than

within 1 year of the effective date of the

program. The operating permit program

applies to the following sources:

1. Major sources, defined as follows:

a. Air toxics sources, as defined in

section 112 of the Act, with the

potential to emit 10 tons per year (tpy),

or more, of any hazardous air pollutant

(HAP) listed pursuant to 112(b); 25 tpy,

or more, of any combination of HAP

listed pursuant to 112(b); or a lesser

quantity of a given pollutant, if the

Administrator so specifies (501(2)(A)).

b. Sources of air pollutants, as defined

in section 302, with the potential to

emit 100 tpy, or more, of any pollutant

(501(2)(B)).

c. Sources subject to the

nonattainment area provisions of title I,

part D, with the potential to emit,

depending on the nonattainment area

designation 10 or more tpy of volatile

organic compound (VOC) or oxides of

nitrogen, 50 or more tpy of carbon

monoxide, and seventy or more tpy of

particulate matter (501(2)(B)).

2. Any other sources subject to a

standard under section 111 or 112.

3. Sources subject to the acid rain

program (501(1)).

4. Any source subject to the PSD

program or the NSR program under title

I, part C or D.

5. Any other stationary source in a

category EPA designates, in whole or in

part, by regulation, after notice and

comment.

For purposes of determining

applicability, a source’s total emissions

of a pollutant are found by summing the

potential emissions of that pollutant

from all emissions units under common

control at the same plant site. If a source

is a major source, even if only due to the

total emissions from one pollutant, then

a source must submit (with few

exceptions) a permit application that

includes all emissions of all regulated

air pollutants from all emissions units

located at the plant.

Part 71 follows the approach of part

70 in deferring nonmajor sources from

permitting requirements. The permitting

requirements for nonmajor sources

subject to a standard under section 111

or 112 of the Act prior to July 21, 1992

are deferred for 5 years from the

effective date of the first approved part

70 program that deferred nonmajor

sources. The EPA may determine on a

case-by-case basis permitting

requirements for nonmajor sources

when they become subject to new

section 111 or 112 standards. Sources

subject to the new source performance

standard for new residential wood

heaters or the national emission

standards for hazardous air pollutants

for asbestos as it applies to demolition

and renovation activities are

permanently exempt from permitting

requirements.

B. Program Implementation

The EPA will administer a part 71

program for those portions of a State

that lack EPA approval for its operating

permits program or for a State that fails

to adequately administer and enforce an

approved program. However, the

requirement that EPA establish a

Federal program for States lacking a

fully approved program is suspended if

a State program is granted interim

approval. The EPA will also administer

part 71 programs in Tribal areas. Should

a part 71 program become effective prior

to the issuance of part 70 permits to all

sources (under an approved part 70

program), EPA will require part 71

permit applications from sources that

have not received part 70 permits.

Applications shall be due within a year

of the effective date of the part 71

program. The EPA will take final action

on at least one-third of the applications

annually.

Section 71.4 also establishes

procedures that would be used for

issuing permits to certain sources

located on the Outer Continental Shelf

(OCS) and after EPA objects to a

proposed or issued State permit.

The EPA may also delegate the

responsibility for administering the part

71 program to the State or eligible Tribe

if the requirements of section 71.10 have

been met. However, delegation will not

constitute approval of a State or Tribal

operating permits program under part

70.

The EPA will suspend the issuance of

part 71 permits upon publication of

notice of approval of a State or Tribal

operating permits program under part

70. The EPA or the delegate agency will

continue to administer and enforce part

71 permits until they are replaced by

permits issued under the approved part

70 program.

The EPA will publish a notice in the

Federal Register informing the public of

the effective dates or delegation of any

part 71 programs for States, Tribal areas,
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34207

and OCS sources. Where practicable,

EPA will also publish notice in a

newspaper of general circulation within

the area subject to the part 71 program

and will notify the affected government.

C. Permit Applications

Each source meeting the applicability

criteria of this part is required to submit

timely and complete information on

standard application forms provided by

the permitting authority. Streamlined

forms for electronic formats may be

provided.

An initial part 71 permit application

is required within 12 months of the later

of:

1. The effective date of this part in a

State, Tribal area, or OCS area where a

source is located, unless the source has

an existing part 70 permit;

2. The expiration of any deferral for

a nonmajor source;

3. The date a source commences

operation; or

4. The date a source meets any of the

applicability criteria of section 71.3.

Sources with part 70 permits in force

at the time part 71 becomes effective in

the area where they are located would

not have to apply for a part 71 permit

until their part 70 permit expires. Prior

to its expiration, the part 70 permit may

be modified by EPA.

Sources would be notified of the

requirement to submit an application at

least 180 days prior to when the

application is due.

The permitting authority will perform

a completeness determination within 60

days of receipt of an application, or the

application will be deemed complete by

default. A complete application would

contain all the information needed to

begin processing the permit application,

including, at a minimum, a completed

standard application form (or forms)

and a compliance plan.

The compliance plan describes how

the source plans to maintain or to

achieve compliance with all applicable

air quality requirements under the Act.

This plan must include a schedule of

compliance and a schedule for the

source to submit progress reports to the

permitting authority. Each source must

submit a compliance certification report

in which it certifies its status with

respect to each requirement, and the

method used to determine the status.

Each operating permit application,

report, or compliance certification

submitted pursuant to part 71 must

include a certification signed by a

responsible official attesting to the truth,

accuracy, and completeness of the

information submitted.

Applicants may be required to update

information in the application after the

filing date and prior to the release of the

draft permit.

D. Permit Content

Part 71 permits must meet all

applicable requirements of the Act and,

among other things, must contain:

1. A 5-year term for acid rain sources,

up to a 12-year term for certain

municipal waste combustors, and up to

a 5-year term for all other sources.

2. Limits and conditions to assure

compliance with all applicable

requirements under the Act.

3. A schedule of compliance, where

applicable.

4. Inspection, entry, monitoring,

compliance certification, recordkeeping,

and reporting requirements to assure

compliance with the permit terms and

conditions.

5. A provision describing permit

reopening conditions.

6. Provisions under which the permit

can be revised, terminated, modified, or

reissued for cause.

7. Provisions ensuring operational

flexibility so that certain changes can be

made within a permitted facility

without a permit revision.

8. A provision that nothing in the

permit or compliance plan affects

allowances under the acid rain program.

All terms and conditions in a part 71

permit, including any provisions

designed to limit a source’s potential to

emit, are enforceable by the

Administrator and citizens under the

Act.

Like part 70, part 71 would allow

sources to apply for a permit shield, i.e.,

a provision in the permit that states that

if the source complies with terms and

conditions of the permit, the source

shall be deemed in compliance with any

applicable requirements reflected in the

permit as of the date of permit issuance.

E. Permit Issuance and Review

Regulations concerning the processes

for permit issuance, review, renewal,

revision, and reopening are found in

sections 71.7 and 71.11. Briefly, these

include:

1. Action on Applications for Permit

Issuance and Permit Renewal

Section 71.7(a) describes the

conditions that must be satisfied before

EPA or a delegate agency may issue a

permit. These include receipt of a

complete application, compliance with

public participation requirements, and

notification of affected States, Indian

Tribes, and EPA (if the program has

been delegated). Except during the

initial phase-in of the program, the

permitting authority is required to act

on permit applications within 18

months after receiving a complete

application.

The timely submittal of a complete

application and any additional required

information creates a ‘‘shield’’ against

enforcement for failure to have a part 70

or part 71 permit. Permits being

renewed are subject to the same

procedural requirements that apply to

initial permit issuance, as provided in

section 71.7(c). The administrative

procedures for permit issuance are

contained in section 71.11 and are

generally based on analogous provisions

governing other EPA permitting

programs at 40 CFR part 124.

2. Permit Revisions

Sections 71.7 (d) and (e) outline the

mechanisms for permit modification

and administrative amendments that are

needed to revise part 71 permits to

accommodate changes that would

otherwise violate terms and conditions

of the permit.

Administrative amendments can be

accomplished by the permitting

authority without public or EPA review.

These permit revisions include

correction of typographical errors,

changes in address or source ownership,

as well as incorporation of requirements

established under State preconstruction

review that meet certain procedural and

compliance requirements.

If a change is not prohibited or

addressed by the permit, the permittee

may make the change after submitting a

notice, and the permit is revised at

renewal.

The regulations establish minor and

significant permit modification

procedures for changes that go beyond

the activities allowed in the original

permit or that increase the total

emissions allowed under the permit.

Minor permit modifications reflect

increases in permitted emissions that do

not amount to modifications under any

requirement of title I and that do not

meet certain other requirements. Minor

permit modification procedures require

a source to provide advance notice of

the proposed change, but allow a change

to take effect prior to the conclusion of

the revision procedures.

A source that makes a change before

the minor permit modification has been

issued does so at its own risk. It is not

protected from underlying applicable

requirements by any shield. It is only

afforded a temporary exemption from

the formal requirement that it operate in

accordance with the permit terms that it

seeks to change in its modification

application. Should the proposed

permit modification be rejected, the

source would be subject to enforcement
34208 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

proceedings for any violation of these

requirements.

Significant permit modifications are

inherently more complex, and will

require additional time to accomplish.

Permitting authorities will initiate their

review of the proposed changes after

receipt of an application.

Sources subject to requirements of the

acid rain program must hold allowances

to cover their emissions of sulfur

dioxide (SO2). Allowance transactions

registered by the Administrator will be

incorporated into the source’s permit as

a matter of law, without following either

the permit modification or amendment

procedures described above.

3. Reopening for Cause

The permitting authority may

terminate, modify, or revoke and reissue

a permit for cause. Reopening and

reissuing procedures follow the same

procedures as apply to initial issuance.

Advance notice is required before

permit reopenings may be initiated.

Section 71.7(f) requires that permits

issued to major sources with 3 or more

years remaining in the permit’s term be

reopened to incorporate applicable

requirements which are promulgated

after the issuance of the permit.

Revisions must be made as

expeditiously as practicable, but no later

than 18 months after the promulgation

of such additional requirements.

4. Permit Notification to EPA and

Affected States

Consistent with 40 CFR section

70.8(b), EPA or the delegate agency

would be required to provide notice of

draft permits to all affected States and

to certain Indian Tribes.

Affected States are those whose air

quality may be affected and that are

contiguous to the State in which the

source is located, or that are within 50

miles of the source. The permitting

authority must give affected States an

opportunity to submit written

recommendations for the permit and

notify any affected State in writing of

any refusal to accept all of its

recommendations.

Although Indian Tribes are not

considered affected States unless they

establish their compliance with criteria

for being treated in the same manner as

States pursuant to section 301(d) of the

Act, the Agency believes federally

recognized Tribes should be given

notice of draft permits that may be

issued to sources that could affect Tribal

air quality. The regulation requires that

the permitting authority send such

notices.

The Act authorizes EPA to object to

any permit that would not be in

compliance with the applicable

requirements of the Act. In the case of

a delegated program, the permitting

authority may not issue a part 71 permit

if the Administrator has objected to its

issuance in writing within 45 days of

receipt of the proposed permit.

5. Administrative and Judicial Review

After the close of the public comment

period on a draft permit, the permitting

authority will issue a final permit

decision. Within 30 days of the final

permit decision, anyone who filed

comments on the draft permit or

participated in the public hearing may

petition the Environmental Appeals

Board (EAB) to review any condition of

the permit. In general, the objections in

the petition must have been raised

during the public participation period

on the permit. The petition will stay the

effectiveness of the specific terms of the

permit which are the subject of the

request for review, pending conclusion

of the appeal proceedings.

The EAB will issue an order either

granting or denying the petition for

review. To the extent review is denied,

the conditions of the final permit

decision become final agency action and

are subject to judicial review in the

United States Court of Appeals under

section 307(b) of the Act. The decision

of the EAB to issue or deny the permit

is also subject to judicial review.

Interested persons (including

permitees) are authorized to petition the

Administrator to reopen an already

issued permit for cause. Petitions would

be required to be in writing and to

contain facts or reasons supporting the

request.

F. Permit Fees

Section 71.9 establishes the Federal

operating permits program fee

requirements for owners or operators of

part 71 sources. The fees must be

sufficient to cover the permits program

costs, including the following:

1. Reviewing and acting on any

permit, permit revision, or permit

renewal, and processing permit

reopenings.

2. Administering the permit program.

3. Implementing and enforcing the

terms of any part 71 permit.

4. Monitoring, modeling,

manipulating, and tracking emissions.

5. Providing support to small business

stationary sources.

Consistent with the two-phased

approach to part 71 promulgation

described in this notice, EPA is today

implementing a two-phased approach to

part 71 fee requirements. Phase I fee

collection will be sufficient to cover

Phase I costs. Since Phase II fee

collection is associated with permit

revision procedures, a fee amount for

Phase II cannot be finalized in today’s

rule. The Phase II fee will add the costs

for the permit revision procedures that

are finalized in that rulemaking.

The dollar per ton fee will vary

depending on the implementation

mechanism EPA uses to administer a

part 71 program. A program that is

administered completely by EPA would

charge $32 per ton per year (ton/yr).

Permit fees for a program for which EPA

relies on contractor assistance to the

greatest extent possible would be

approximately $57 per ton/yr. Program

costs (and fees) would vary among part

71 programs depending on the hourly

rate paid to the contractor for its work

on the particular State’s part 71

program. The costs of a program that is

staffed in part by EPA employees and in

part by contractors or by the delegate

agency would vary in accordance with

the percentage of personnel time

allocated to non-EPA staff and the

hourly rate paid to the contractor for its

work on the State’s part 71 program.

The EPA may suspend collection of

part 71 fees for part 71 programs which

are fully delegated to States and for

which EPA incurs no administrative

costs.

The EPA may promulgate a separate

fee schedule for a particular part 71

program if the Administrator determines

that the fee schedule in the rule does

not adequately reflect the cost of

administering the program.

Sources are required to submit fee

calculation worksheets and fees at the

same time as their initial permit

applications are due and thereafter on

an annual basis.

Part 71 program costs and permit fees

will be reviewed by the Administrator at

least every 2 years, and changes will be

made to the fee schedule as necessary to

reflect permit program costs.

G. Federal Oversight of Delegated

Programs

Section 71.10 establishes the

procedures EPA would follow when

delegating the authority to administer a

part 71 program to a State, eligible

Indian Tribe, or other air pollution

control agency. The EPA will delegate

authority to run the program where

possible in order to take advantage of

existing expertise of the delegate agency

or where it seems probable that the

delegate agency’s submitted part 70

program will be approved within a short

time by EPA, provided in both cases

that the delegate agency has the

authority to administer the program that

would be delegated.
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34209

A delegate agency must submit a

formal request for delegation and other

documentation that shows the agency or

eligible Tribe has adequate legal

authority and capacity to administer

and enforce the part 71 program. If the

request for delegation is accepted, EPA

and the delegate agency will enter into

an agreement that sets forth the terms

and conditions of the delegation.

As part of its oversight of delegated

programs, EPA would review copies of

applications, compliance plans,

proposed permits and final permits that

the delegate agency would be required

to send to EPA. The EPA would have 45

days in which to review proposed

permits. If EPA objects to the issuance

of a permit within that time, the

delegate agency would be required to

revise and resubmit the proposed permit

to EPA.

Delegation of a part 71 program would

not relieve a State of its obligation to

submit an approvable part 70 program,

nor from any sanctions that the

Administrator may apply for the State’s

failure to have an approved part 70

program.

H. Enforcement

The Federal enforcement authority

available under section 113 of the Act

for violations of title V and the

regulations thereunder provides broader

enforcement authority than States are

required to have under the part 70

regulations. Examples of the Federal

enforcement authorities available under

the Act include, but are not limited to,

the authority to: (1) restrain or enjoin

immediately any person by order or by

suit in court from engaging in any

activity in violation of the Act that is

presenting an imminent and substantial

endangerment to the public health or

welfare, or the environment; (2) seek

injunctive relief in court to enjoin any

violation of the Act; (3) issue

administrative orders that assess civil

administrative penalties; (4) assess and

recover civil penalties; and (5) assess

criminal fines.

III. Significant Changes to the Proposed

Regulations

A. Section 71.2—Definitions

The Agency has adopted definitions

in today’s rulemaking that are consistent

with and are mainly modelled on

corresponding definitions in the current

part 70 rule, rather than on the part 71

proposal. Consequently, many of the

definitions adopted today differ from

those contained in the part 71 proposal

which were largely based upon the

August 1994 proposed revisions to

corresponding definitions in part 70

which the Agency is not yet prepared to

finalize.

Several definitions found in the

proposed section 71.2 have been revised

to conform more closely to the

definitions used in the current part 70

rule. These include ‘‘affected State,’’

‘‘applicable requirements,’’ ‘‘final

permit,’’ ‘‘major source,’’ ‘‘permit

revision,’’ ‘‘permitting authority,’’ and

‘‘responsible official,’’ each of which is

discussed briefly below. Similarly, EPA

adopted definitions for ‘‘permit

modification’’ and ‘‘section 502(b)(10)

change’’ from the current part 70 rule,

because these terms are integral parts of

today’s rulemaking, which is based on

the existing part 70 regulations. Also,

several definitions in the part 71

proposal describe terms and concepts

that the Agency has concluded are

either not necessary or are not ready to

be finalized in today’s rulemaking. The

terms for which EPA has not adopted a

definition include ‘‘insignificant activity

or emissions,’’ ‘‘major new source

review,’’ ‘‘minor new source review,’’

‘‘potential to emit,’’ ‘‘title I

modification,’’ and ‘‘Tribal area.’’ To the

extent these proposed terms were based

on the August 1994 proposed revisions

to part 70, EPA will finally address

them in the Phase II rulemaking.

In addition, the Agency has retained

several definitions found in the part 71

proposal that are not found in the

current part 70 rule, but are needed for

part 71. These include definitions for

‘‘delegate agency,’’ ‘‘part 71 permit,’’

‘‘part 71 program,’’ and ‘‘part 71

source.’’ The Agency has also adopted

definitions for ‘‘eligible Indian Tribe,’’

‘‘Federal Indian reservation,’’ and

‘‘Indian Tribe,’’ which were added to

clarify which Tribes would be eligible to

receive delegation of the part 71

program and to be considered ‘‘affected

States.’’

The part 71 proposal and the August

1995 supplemental proposal reflect the

Agency’s position on what definitions

would be appropriate in conjunction

with the permit revision procedures,

operational flexibility provisions, and

other provisions that have been

proposed for finalization in the Phase II

rulemaking. Subsequent to reviewing all

of the comments on both of these

proposals, EPA may finalize definitions

that differ from those adopted today.

1. Affected States

a. Indian Tribes. The EPA received

numerous comments from Indian Tribes

suggesting that federally recognized

Indian Tribes should be considered to

be ‘‘affected States’’ if their air quality

may be affected or the Tribal area is

contiguous to the State in which the

permittee is located or is within 50

miles of the permittee. They contended

that Tribes should not have to meet any

type of eligibility criteria in order to be

considered an ‘‘affected State.’’ Contrary

to the view of these commenters, the

EPA interprets section 301(d)(2) of the

Act as authorizing the Agency to treat

Indian Tribes in the same manner as a

State for purposes of being an ‘‘affected

State’’ only when EPA has determined

that the Indian Tribe has demonstrated

that it has met the eligibility criteria of

section 301(d)(2) of the Act. The second

paragraph of the proposed definition of

‘‘affected State’’ was inconsistent with

this interpretation in that it would have

treated Tribes in the same manner as

States if the permitting action concerned

a source located in a Tribal area,

regardless of the Tribe’s eligibility

status. Therefore, EPA has amended this

paragraph to include the same eligibility

requirement as the first paragraph. That

is, that the Indian Tribe must have

demonstrated that it has met the

eligibility criteria of section 301(d)(2).

However, in the interest of furthering

government-to-government

relationships with Tribes, EPA has

adopted a provision in section 71.8 that

requires the part 71 permitting authority

to provide notice of draft permits to any

federally recognized Indian Tribe whose

air quality may be affected by the

permitting actions and whose

reservation or Tribal area is contiguous

to the jurisdiction in which the part 71

permit is proposed or is within 50 miles

of the permitted source. (See discussion

at section III.G. of this notice.)

b. Local agencies. The proposed

definition of ‘‘affected State’’ in the part

71 proposal added language not found

in the current part 70 definition of

‘‘affected State’’ to the effect that, when

a part 71 permit, permit modification, or

permit renewal is proposed for a source

located within the jurisdiction of a local

agency, that agency would be

considered an affected State. Today’s

rulemaking retains this approach

because it pertains to a situation which

is unique to part 71, i.e., when EPA

administers a part 71 program in an area

where the local agency would normally

be the permitting authority of record

under an approved part 70 program. The

proposal also differed from today’s

rulemaking in that under the proposal,

local agencies would not otherwise be

considered affected States. Since the

approach taken to such jurisdictions is

an issue for both parts 70 and 71, it will

be addressed in the Phase II rulemaking.

In the interim, the proposed language

has been deleted to comport with the

current part 70 definition.
34210 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

2. Applicable Requirements

The part 71 proposal expanded the

part 70 definition of ‘‘applicable

requirement’’ to include the provision

that any requirement enforceable by the

Administrator and by citizens under the

Act which limits emissions for the

purpose of creating offset credits or

avoiding any applicability requirement

is itself an applicable requirement. This

addition, while helpful for

understanding what constitutes an

applicable requirement, was based on

the August 1994 proposed revisions to

part 70, which EPA is not yet prepared

to finally promulgate. As such, EPA

believes it is not appropriate to finalize

this change for purposes of part 71 at

this time, but intends to address this

issue in the Phase II rulemaking. It was

therefore deleted to comport with the

current part 70 definition.

The definition of ‘‘applicable

requirement’’ in the part 71 proposal

also differed from the definition in the

current part 70 rule in that it limited the

title VI requirements that would have to

be included in a title V permit. This

proposed language, while consistent

with the August 1994 proposed

revisions to part 70, which, again, EPA

is not yet prepared to finalize, was

removed so that the definition would

conform to the definition in the current

part 70 regulation.

3. Final Permit

The proposal contained a proposed

definition of ‘‘final action or final

permit action.’’ The final rule changes

this term to ‘‘final permit’’ in order to

better harmonize the definition with the

term ‘‘final permit’’ in the current part

70 regulation promulgated at section

70.2.

4. Major Source

The proposed part 71 rule contained

a definition of ‘‘major source’’ that was

based on the proposed change to the

term contained in the August 1994

proposed revisions to part 70. Since

publication of the part 71 proposal, EPA

has also proposed additional changes to

the term in the August 1995

supplemental proposal for parts 70 and

71. The EPA is currently in the process

of reviewing, evaluating and developing

positions in response to comments on

this very important term and other

issues raised in the August 1995

proposal. Consequently, EPA is not yet

prepared to promulgate part 71 in

general, or the major source definition

in particular, as based on the August

1994, April 1995 or August 1995

proposals. The only exception to this

approach is in regard to source

categories for which fugitive emissions

are to be counted in determining

whether a source is a major source

under section 302 of the Act.

Consistent with PSD and

nonattainment NSR, current part 70

requires the counting of fugitive

emissions from source categories which

have been listed pursuant to section

302(j) in major source applicability

determinations. See the definition of

‘‘major source’’ at 40 CFR section 70.2.

The one difference, however, between

the list of source categories under PSD

and nonattainment NSR and current

part 70 is in regard to the 27th category

of sources that are required to count

fugitive emissions. In parts 51 and 52,

the 27th category is stated as follows:

Any other stationary source category

which, as of August 7, 1980, is being

regulated under section 111 or 112 of the Act.

In current part 70, the 27th category

reads as follows:

All other stationary source categories

regulated by a standard promulgated under

section 111 or 112 of the Act, but only with

respect to those air pollutants that have been

regulated for that category;

As can be seen from the above, one of

the principal differences between these

two paragraphs is the date of August 7,

1980, which is specified in the PSD and

nonattainment NSR regulations, but is

absent from the current part 70

regulation. The result of this difference

is that part 70 literally requires sources

to count fugitives even where those

sources are not required to do so in

determining whether they are major for

purposes of PSD or nonattainment NSR.

As stated in the preamble to the August

1994 part 70 proposal, EPA

acknowledges that it did not follow the

procedural steps necessary under

section 302(j) to expand the scope of

sources in this category for which

fugitives must be counted in part 70

major source determinations. See

memorandum of June 2, 1995, entitled

‘‘EPA Reconsideration of Application of

Collocation Rules to Unlisted Sources of

Fugitive Emissions for Purposes of Title

V Permitting,’’ from Lydia Wegman,

Deputy Director, Office of Air Quality

Planning and Standards, to Regional Air

Directors. Instead of perpetuating this

problem by following this aspect of

current part 70, and even though the

Agency is not yet ready to finalize the

approach taken in the August 1995

supplemental proposal for parts 70 and

71, EPA believes that an appropriate

interim solution is to finalize this

category similar to how it was proposed

in the April 1995 part 71 proposal and

consistent with the provisions in the

PSD and nonattainment NSR

regulations. As a result, the 27th

category will read as follows:

Any other stationary source category

which, as of August 7, 1980, is being

regulated under section 111 or 112 of the Act.

Use of the above language best ensures

that, until EPA is prepared to finalize

part 70’s proposed revisions, there will

be no discrepancy between the

treatment of fugitive emissions under

PSD and nonattainment NSR and the

corresponding provision in this phase I

part 71 rule. This language further

ensures that sources which are

considered major sources under PSD

and nonattainment NSR are also major

sources under part 71. This consistency

is compelled by section 501(2) which

requires any stationary source to be

considered major under title V if it is a

major source under section 112 or a

major stationary source under section

302 or part D of title I.

It is important to remember that EPA

has proposed additional modifications

to the list of source categories, including

this 27th category, in the August 1995

proposal for parts 70 and 71. However,

as EPA is currently in the process of

reviewing and evaluating comments

regarding these revisions, EPA cannot at

this time finalize any of these proposed

modifications.

The EPA stresses that the definition of

major source in today’s rulemaking does

not constitute a decision to reject other

proposed changes to the term contained

in the recent proposals. Rather, EPA

expects the Phase II part 71 rulemaking

to make whatever changes to the term

are necessary in order to maintain

harmonization with part 70, if the part

70 definition of major source is

ultimately revised as the Agency

intends. In the meantime, however, in

order to avoid delay in fulfilling the

Agency’s responsibilities under title V,

and in order to avoid repeating a

procedural mistake that occurred in the

development of the first part 70 rule,

EPA has concluded, in response to the

commenters, that at this point it is most

reasonable to promulgate a definition

that is consistent with the major source

definition contained in the current part

70 rule, except for the 27th category of

sources listed pursuant to section 302(j).

As EPA has already told States that they

may receive interim approval of their

State programs even if they do not

literally match with current part 70’s

27th category, due to EPA’s concession

that the Agency did not take the

procedural steps necessary in part 70 to

constitute a section 302(j) rulemaking,

EPA believes it is reasonable to take this

limited departure from part 70. The EPA

will respond to specific comments on
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34211

the major source definition as proposed

in April 1995 and August 1995 in the

context of finalizing the Phase II part 71

rule.

5. Permit Modification and Permit

Revision

For the purposes of this rulemaking,

EPA adopted the definition of permit

modification in the current part 70

regulation and revised the definition of

‘‘permit revision’’ to be consistent with

the current part 70 definition.

6. Permitting Authority

The final rule changes the proposed

definition of ‘‘permitting authority’’ to

more closely match the definition of the

term currently promulgated at section

70.2.

7. Potential to Emit

Today’s rule does not include a final

regulatory definition of the term

‘‘potential to emit.’’ The part 71

proposal contained a proposed

definition of potential to emit that was

based on the August 1994 proposed

revisions to part 70. The current part 70

definition of the term provides that

physical or operational limits on a

source’s capacity to emit an air

pollutant shall be considered part of the

source’s design if the limitation is

enforceable by the Administrator. Under

the proposed definition, the phrase

‘‘and by citizens under the Act’’ would

have been added. The EPA is still in the

process of evaluating comments on the

proposed revisions to part 70 with

respect to this issue, and is not yet

prepared to adopt the revision to the

definition into a final rule.

Consequently, it is premature to adopt

this change into the final part 71 rule at

this time.

In addition, EPA also received

substantial adverse comment on the

proposed requirement that limitations

on potential to emit be enforceable by

the Administrator (i.e., ‘‘federally

enforceable’’). Industry commenters

noted that EPA’s policy on Federal

enforceability was the subject of several

pending lawsuits against the Agency in

the Court of Appeals. These commenters

have long held that emissions

limitations enforceable under State law

should not have to be federally

enforceable in order to be considered

part of a source’s physical or operational

design and a valid limit on potential to

emit. These commenters also urged EPA

to codify the Agency’s January 25, 1995,

memorandum in which EPA stated it

would not require certain sources that

otherwise have the potential to emit an

air pollutant in major amounts to obtain

permits under state part 70 programs.

See, memorandum of January 25, 1995,

entitled ‘‘Options for Limiting the

Potential to Emit (PTE) of a Stationary

Source Under Section 112 and Title V

of the Clean Air Act (Act),’’ from John

Seitz, Director, Office of Air Quality

Planning and Standards, to Regional Air

Division Directors (hereafter ‘‘January

25, 1995 memorandum from John

Seitz’’).

Since the close of the comment

period, the U.S. Court of Appeals for the

District of Columbia Circuit has ruled

on two occasions that EPA in two

separate regulations had failed to

explain why the Agency had adopted a

restrictive interpretation of ‘‘potential to

emit.’’ See National Mining Association

v. EPA, 59 F.3d 1351 (D.C. Cir. July 21,

1995), and Chemical Manufacturers

Association v. EPA, No. 89–1514 (D.C.

Cir. Sept. 15, 1995). In response to these

rulings, EPA has begun a rulemaking

effort that would consistently apply to

all of its regulations and programs that

base applicability on sources’ potential

to emit. This rulemaking will address

potential to emit not only in the

regulations that were the subject of the

two court rulings (EPA’s ‘‘General

Provisions’’ regulations under section

112 of the Act promulgated at 40 CFR

part 63, and the NSR and PSD

regulations at parts 51 and 52), but also

to parts 70 and 71.

In the meantime, however, the

Agency believes it would not be

appropriate to delay issuance of the part

71 regulation (and implementation of

the Federal operating permit program in

States that have not yet obtained part 70

approval) due to the pendency of the

Agency’s general potential to emit

rulemaking. At the same time, EPA does

not believe it would be appropriate to

merely recodify the part 70 definition of

potential to emit in this Phase I part 71

rule, in light of the recent court

decisions concerning the section 112

and NSR and PSD regulations.

Consequently, for this interim part 71

rule, EPA is not adopting a regulatory

definition of potential to emit for

purposes of part 71. This definition will

be added to part 71 at a later time, when

the Agency completes its general

rulemaking to define potential to emit

for its various stationary source

programs under the Act.

Nevertheless, the absence of a

regulatory definition of potential to emit

in today’s rule should not prevent

sources from being able to determine

whether they are subject to the part 71

program because they are major sources.

The EPA stresses that the term ‘‘major

source’’ is already defined as a statutory

matter in title V at section 501(2) of the

Act to mean a major source as defined

in section 112 and a major stationary

source as defined in section 302 or part

D of title I of the Act. Moreover, the

definition of major source adopted

today also tracks these statutory

provisions, and, as discussed in the

recent memorandum entitled ‘‘Interim

Policy on Federal Enforceability

Requirement for Limitations on

Potential to Emit,’’ from John Seitz,

Director, Office of Air Quality Planning

and Standards (hereafter January 22,

1996 memorandum from John Seitz),

most current regulatory requirements

and policies regarding potential to emit,

including the interim policy discussed

in the January 25, 1995 Seitz

memorandum, remain in effect while

EPA conducts expedited rulemaking to

address these issues in detail.

Consequently, in determining whether a

source is major, the part 71 permitting

authority and source operator should

look to the regulatory definition of

major source adopted in today’s rule

and the statutory definitions in section

112, section 302, and part D of title I (as

those provisions are implemented by

applicable regulations thereunder) as

controlling for purposes of this Phase I

part 71 rule.

In National Mining Association v.

EPA, 59 F.3d 1351 (D.C. Cir. July 21,

1995), the Court dealt with the potential

to emit definition under the hazardous

air pollutant programs promulgated

pursuant to section 112. In this

decision, the Court agreed with EPA

that only ‘‘effective’’ State-issued

controls should be cognizable in

limiting potential to emit. In addition,

the Court did not question the validity

of current federally enforceable

mechanisms in limiting potential to

emit. However, the Court found that

EPA had not adequately explained why

only federally enforceable measures

should be considered in assessing the

effectiveness of State-issued controls.

Accordingly, the Court remanded the

section 112 General Provisions

regulation to EPA for further

proceedings. Thus, EPA must either

provide a better explanation as to why

Federal enforceability promotes the

effectiveness of State controls, or

remove the exclusive Federal

enforceability requirement. The Court

did not vacate the section 112

regulations, and they remain in effect

pending completion of EPA rulemaking

proceedings in response to the Court’s

remand.

The EPA reiterates that independent

from the decision in National Mining,

current EPA policy already recognizes

State-enforceable potential to emit

limits under section 112 and title V in

many circumstances under the
34212 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

transition policy discussed in the

January 25, 1995 John Seitz

memorandum, as recently revised by the

January 22, 1996 John Seitz

memorandum. In recognition of the

absence in some States of suitable

federally enforceable mechanisms to

limit potential to emit applicable to

sources that might otherwise be subject

to section 112 major source

requirements or to title V, EPA’s policy

provides for the consideration of Stateenforceable limits as a gap-filling

measure during a transition period that

extends until January 1997. Under this

policy, restrictions contained in State

permits issued to sources that actually

emit more than 50 percent, but less than

100 percent, of a relevant major source

threshold are treated by EPA as

acceptable limits on potential to emit,

provided that the permit and the

restriction in particular are enforceable

as a practical matter. In addition,

sources with consistently low levels of

actual emissions relative to major source

thresholds can avoid section 112 major

source requirements even absent any

permit or other enforceable limit on

potential to emit. Specifically, the

policy provides that sources which

maintain their emissions at levels that

do not exceed 50 percent of any

applicable major source threshold are

not treated as major sources and do not

need a permit to limit potential to emit,

so long as they maintain adequate

records to demonstrate that the 50

percent level is not exceeded.

Under today’s Phase I part 71 rule,

sources that are not treated as major

under this policy would also not be

treated as major for purposes of part 71.

However, if a source would be treated

as major under the applicable

regulations implementing section 112

and this policy, the source would be

required to obtain a part 71 permit. The

EPA notes that this policy is to end in

January 1997. In conjunction with the

general rulemaking on potential to emit,

EPA will consider whether it is

appropriate to extend the transition

period beyond January 1997.

In Chemical Manufacturers

Association v. EPA, No. 89–1514 (D.C.

Cir. Sept. 15, 1995), the Court addressed

the potential to emit definition in the

PSD and NSR programs. Specifically,

this case challenged the June 1989

rulemaking in which EPA reaffirmed the

requirement for Federal enforceability of

potential to emit limits taken to avoid

major source permitting requirements in

these programs. In a briefly worded

judgment, the Court, in light of National

Mining, remanded the PSD and NSR

regulations to EPA. In addition, in

contrast to its disposition of the section

112 regulations in National Mining, the

Court in Chemical Manufacturers

vacated the federal enforceability

requirement of the potential to emit

definitions in the PSD and NSR

regulations.

The EPA interprets the Court’s

decision to vacate the PSD/NSR Federal

enforceability requirement as causing an

immediate change in how EPA

regulations should be read, although

EPA expects that the effect of this

change will be limited. Specifically,

regarding provisions of the definitions

of potential to emit and related

definitions requiring that physical or

operational changes or limitations be

‘‘federally enforceable’’ to be taken into

account in determining PSD/NSR

applicability, the term ‘‘federally

enforceable’’ should now be read to

mean ‘‘federally enforceable or legally

and practically enforceable by a State or

local air pollution control agency.’’

However, the effects of the vacatur

will be limited during the period prior

to completion of new EPA rulemaking

on this issue. Thus, during this interim

period, Federal enforceability is still

required to create ‘‘synthetic minor’’

new and modified sources in most

circumstances pending completion of

EPA rulemaking. This is because EPA

interprets the order vacating certain

provisions of the PSD/NSR regulations

as not affecting the provisions of any

current State or Federal implementation

plan (SIP or FIP), or of any permit

issued under any current SIP or FIP.

Thus, previously issued federally

enforceable permits issued under such

programs remain in effect.

Moreover, new or modified sources

that seek to lawfully avoid compliance

with the major source requirements of

PSD or nonattainment NSR by limiting

potential to emit to achieve synthetic

minor status must still obtain a general

or ‘‘minor’’ NSR preconstruction permit

under section 110(a)(2)(C) of the Act

and 40 CFR section 52.23. (This

requirement was not at issue in the

Chemical Manufacturers case, and is

unaffected by the Court’s ruling.) Every

SIP contains a minor NSR program that

applies generally to new or modified

sources of air pollutants, and permits

issued under such programs are, like all

other SIP measures, federally

enforceable. In sum, the precise impact

of the vacatur on PSD/NSR applicability

in any State, and hence the applicability

of part 71 under the section 302 and

part D of title I prongs of the definition

of major source adopted in part 71, can

be definitively established only by

reviewing the provisions of the

particular SIP or FIP to which the

source is subject.

8. Regulated Air Pollutant

In the August 1995 supplemental

proposal, EPA proposed a less inclusive

definition than is currently promulgated

in part 70 or was proposed for part 71

in the April 1995 notice. However, for

purposes of today’s rulemaking, EPA is

retaining the definition in the part 71

proposal, which is consistent with the

current part 70 definition. The EPA

intends to take final action on the term

as proposed in the supplemental

proposal in the Phase II rulemaking.

9. Responsible Official

Although EPA has proposed, in the

August 1994 proposed revisions to part

70, to clarify that the criteria for

selecting the designated representative

is the same at an affected source as at

other sources, the Agency has adopted

a definition of this term for purposes of

today’s rulemaking that is consistent

with the definition in current part 70.

The EPA will take final action in Phase

II consistent with the Agency’s final

resolution of this issue in response to

comments on the August 1994 notice.

10. Section 502(b)(10) Changes

The part 71 proposal, in omitting the

definition of ‘‘section 502(b)(10)

changes’’ from section 71.2, followed

the approach used in the August 1994

proposed revisions to part 70. The

Agency’s reasons for the omission are

articulated in that proposal at 59 FR

44467–8. As indicated in the August

1995 supplemental proposal, this is still

the Agency position. However, EPA will

not adopt a final position on proposed

revisions regarding operational

flexibility for part 70 or 71 until the

Phase II rulemaking. For purposes of

today’s rulemaking, EPA has adopted a

definition of the section 502(b)(10)

changes that comports with the current

part 70 regulation, in order to better

harmonize the Phase I part 71 rule and

the current part 70 regulation.

11. Title I Modification

The part 71 proposal, based on the

August 1994 proposed revision to part

70, contained a proposed definition of

the phrase ‘‘Title I modification or

modification under any provision of

title I of the Act.’’ Subsequently, EPA

issued a revised proposed definition in

the August 1995 supplemental proposal

for parts 70 and 71. The EPA is in the

process of reviewing and developing a

position in response to the comments on

the several proposals with respect to

this issue, and is not yet prepared to

define the term in a final rule. The EPA

will add a definition in the Phase II

rulemaking that is consistent with how
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34213

EPA ultimately defines the term under

part 70.

A detailed discussion of the history of

this definition is contained in the

preamble to the August 1995 part 70

proposal (60 FR 45545). At issue is

whether the phrase ‘‘modifications

under any provision of title I’’ as used

in section 502(b)(10) of the Act includes

not only modifications subject to major

NSR requirements of parts C and D of

title I but also modifications subject to

minor NSR programs established by the

States pursuant to section 110(a)(2)(C).

In August 1994, EPA proposed to

interpret the title I modification

language of part 70 to include minor as

well as major NSR modifications (55 FR

44527). The EPA received many

comments from industry and States

contesting this interpretation. The

commenters argued that EPA had

defined title I modification in the

preamble to the May 1991 proposed part

70 rule to exclude minor NSR (56 FR

21746–47 and footnote 6) and did not

redefine it in the final July 1992 rule. As

a result, they argued that they were

relying on the current rule to be

interpreted consistent with the

proposed rule preamble and that EPA

could not change its interpretation

without undertaking further rulemaking.

Based in part on the arguments raised

by commenters, EPA revised its

proposed interpretation of the definition

of title I modification in the August

1995 supplemental notice to exclude

modifications subject to minor NSR. In

addition, EPA proposed regulatory

language defining title I modification

which excluded the reference to section

110(a)(2) of the Act.

While EPA is not yet prepared to

adopt a final definition for the term, in

implementing the Phase I part 71

program EPA will treat the issue

consistently with the approach the

Agency has advised States to take under

the current part 70 regulation.

Consequently, it will not consider title

I modifications to include changes

subject to State minor NSR programs.

B. Section 71.3—Sources Subject to

Permitting Requirements

The final rule promulgates provisions

regarding applicability of the program at

section 71.3. These provisions are based

on their counterparts in the currently

promulgated part 70 rule at section 70.3.

Consequently, in several aspects, they

differ from section 71.3 as proposed,

which was based on the August 1994

proposed revisions to section 70.3

which the Agency is not yet prepared to

finalize.

Paragraph (a)(1) of the part 71

proposal contained an exemption from

title V for major sources that would be

subject to title V only if they have the

potential to accidentally release

pollutants listed pursuant to section

112(r)(3) in major amounts. This

exemption has been deleted, even

though it garnered reviewer support,

consistent with the decision to match

the part 70 requirements except where

unique circumstances make a change

necessary. If EPA ultimately revises part

70 to add the deleted language, the

Agency would intend to revise part 71

consistently.

Proposed section 71.3(a)(4) which was

modelled upon the August 1994

proposed revisions to part 70 and would

have stated that any source subject to

title I parts C or D would be required to

obtain a permit was also deleted from

the final regulation to comport with the

part 70 regulation. The purpose of this

provision was to ensure that all sources

subject to preconstruction permitting as

major sources under parts C or D of the

Act are also subject to title V permitting.

Again, if part 70 is ultimately revised to

add this provision, EPA would intend to

revise part 71 to add it as well.

Similarly, paragraph (b)(2) has been

changed to conform with section

70.3(b)(2), which addresses applicability

for sources subject to section 111 or 112

standards promulgated after July 21,

1992. Proposed section 71.3(b)(2)

differed from both existing section

70.3(b)(2) and the August 1994

proposed revisions thereto. If section

70.3(b)(2) is ultimately revised, EPA

would expect to revise section 71.3(b)(2)

to harmonize it with part 70.

Paragraphs (c) and (d) of this section,

found in the proposal at sections

71.6(a)(1)(iv) and 71.5(f)(3)(i),

respectively, were moved to this section

for compatibility with the current part

70 provisions at sections 70.3 (c) and

(d).

C. Section 71.4—Program

Implementation

The major issues raised by

commenters on proposed section 71.4

related to the need to base part 71 on

finalized (as opposed to proposed)

provisions of part 70, how the part 71

program should be customized to fit the

unique needs of the State or area for

which the program is administered, and

jurisdictional issues with respect to

programs on Tribal lands. The Agency’s

approach to the first issue is discussed

at length in section II of this document.

This section addresses the second and

third issues in addition to several minor

changes to the proposed rule that were

adopted today.

1. National Template Approach

With respect to the second issue, EPA

received divergent comments. For

example, commenters suggested that a

national template should be flexible,

that a national template should be used

only to fill in the gaps of deficient State

programs, and that there should be no

national template because title V does

not authorize EPA to develop such a

rule.

The Agency carefully considered the

statutory framework for the program and

interprets title V as authorizing a

national template approach. For a

further discussion of this issue, see

section II of this document. The EPA

chose a national template approach

because EPA believes the national

template is flexible enough to be an

effective program in nearly all areas,

and individual rulemakings for each

area that has a part 71 program would

be needlessly burdensome on the

Agency. Since the national template

will serve the needs of most areas, it is

more efficient to promulgate the

program once while allowing for

separate rulemakings, as needed, in

some areas. The EPA recognizes the

desirability of providing a flexible

approach to administering the program,

as the commenters have suggested,

when the national template does not

adequately fit the unique State or Tribal

situation. Such flexibility is already

contained in section 71.4. When EPA

determines that the national template

rule is not appropriate for a State, EPA

may adopt, through a separate

rulemaking, appropriate portions of a

State or Tribal program in combination

with provisions of part 71 in order to

craft a suitable part 71 program, as

provided in section 71.4(f).

Furthermore, section 71.9(c)(7) provides

that when the national fee structure

would not reflect the cost of

administering a part 71 program, the

Administrator shall through a separate

rulemaking set an appropriate fee.

Finally, as provided in section 71.5 and

as discussed in section III.D of this

document, EPA has designed part 71 to

provide significant flexibility to

accommodate the localized air quality

issues. For example, EPA will use State

application forms whenever possible

and will try to match the list of trivial

activities which may be left off

application forms to the lists established

in the State operating permit program.

2. Part 71 Programs in Tribal Areas

The EPA is deferring promulgation of

regulations that would describe how the

Agency would determine the

boundaries of a part 71 program for a
34214 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

Tribal area. The EPA has published a

proposed rule, pursuant to section

301(d)(2) of the Act, specifying the

provisions of the Act for which EPA

believes it is appropriate to treat Indian

Tribes in the same manner as States and

outlining the Agency’s position on the

authority of Indian Tribes to administer

air programs under the Act. See 59 FR

43956 (Aug. 25, 1994)(‘‘Indian Tribes:

Air Quality Planning and Management,’’

hereafter ‘‘proposed Tribal rule’’). As

indicated in the part 71 proposal, EPA

intends to follow the approach of the

Tribal rule with respect to issues of

jurisdiction and resolution of

jurisdictional disputes. The EPA agrees

that it would be more practical to defer

addressing jurisdictional issues until the

promulgation of the Tribal rule. The

Agency will finalize an approach to

jurisdiction as well as a definition of

Tribal area in the Phase II rulemaking or

in conjunction with finalizing the Tribal

rule. In the interim, the Agency will not

be able to implement part 71 programs

in Tribal areas unless it completes a

rulemaking that establishes the

boundaries of the part 71 program in the

Tribal area. Rulemakings for the Tribal

rule and Phase II will be completed well

in advance of the November 1997

deadline for EPA to implement part 71

programs on Tribal lands. Therefore,

EPA does not expect that the deferral of

jurisdictional issues will delay

implementation of the part 71 program.

Although part 71 contains no definition

of ‘‘Tribal area,’’ EPA will provide (and

will require delegate agencies to

provide) notice of proposed permitting

actions pursuant to section 71.8(d) even

prior to the Phase II rulemaking. In the

interim, federally recognized Indian

Tribes will receive notice with respect

to permitting actions related to sources

whose emissions may affect Tribal air

quality and that are located in

contiguous jurisdictions or are within

50 miles of the exterior boundaries of

the reservation.

3. Expiration of Part 71 Permits

The Agency received comments

suggesting that part 71 permits should

be rescinded automatically, without the

Agency taking any action, when they are

replaced by a part 70 permit. The EPA

agrees that no separate agency action

should be required when a part 71

permit is replaced by a part 70 permit

issued under the approved part 70

program because unless the rescission

happens simultaneously with the

issuance of the part 70 permit, a source

could be subject to a part 70 and a part

71 permit which may contain different

requirements. Accordingly, EPA has

deleted proposed section 71.4(l)(3)

which provided that the Administrator

would rescind part 71 permits when

they were replaced with part 70 permits.

Further, the EPA has adopted section

71.6(a)(11) which provides that part 71

permits shall contain a provision to

ensure that a part 71 permit will expire

when the source is issued a part 70

permit.

4. Suspension of Issuance of Part 71

Permits

The EPA revised the first paragraph of

proposed section 71.4(l) to clarify,

consistent with EPA’s original intent,

that EPA may suspend issuance of part

71 permits whenever the Agency has

granted full or interim approval to a

State part 70 program. Section 502(e),

which addresses suspension of the

issuance of part 71 permits, provides

that the triggering event for suspension

is publication of notice of approval.

Thus, there is no statutory requirement

that a State program must ‘‘fully’’ meet

the requirements of part 70 or be fully

approvable in order for EPA to suspend

permit issuance. The Agency believes it

is appropriate to suspend issuance of

part 71 permits when a State program

substantially meets the requirements of

part 70 and has received interim

approval because it would be confusing

and burdensome to have two title V

permit programs operating

simultaneously in the same jurisdiction.

Therefore, EPA has deleted the word

‘‘fully’’ from the first paragraph of

proposed section 71.4(l).

5. Delegation Agreements

The final rule makes a minor change

to proposed section 71.4(j) in parallel

with a change to proposed section

71.10(b) to reflect the fact that under the

final rule, EPA will not publish its

delegation agreement with a delegate

agency. Therefore, section 71.4(j)

provides that the roles of the delegate

agency and EPA in administering the

part 71 program will be defined in a

delegation agreement, not in a Federal

Register notice. The EPA will follow the

procedures for delegation agreements

established for the PSD program under

which EPA does not publish its

delegation agreements. Delegation

agreements reflect the understanding of

EPA and the delegate agency as to their

respective responsibilities and are not

subject to any notice requirement. This

approach allows EPA and the delegate

agency to modify their agreement as

circumstances change, without the

burden of publishing a Federal Register

notice.

6. Early Reductions Permits

The Agency retained in section

71.4(i)(3) the requirement that the

permitting authority take action on

complete permit applications containing

an early reduction demonstration within

12 months of receipt of the complete

application. Although the current part

70 regulation sets a 9 month deadline

for State action, EPA Regional offices

are allowed 12 months to take action on

the permit applications submitted under

the interim permitting rule for early

reduction sources that EPA adopted

prior to the approval of any State part

70 programs. See 40 CFR section

71.26(a)(2). The Agency believes that

this time frame is reasonable given the

effort required to process the permits

and the need for sources qualifying for

a compliance extension under the Early

Reductions Rule to obtain a permit prior

to certain deadlines set by the rule.

D. Section 71.5—Permit Applications

The part 71 proposal addressed

permit applications at proposed section

71.5 (a) through (i). This proposed

section was based upon a combination

of corresponding provisions in the

existing part 70 rule and in the August

1994 proposed revisions to part 70, and

was presented in a slightly different

structure from the part 70 rule. In light

of EPA’s decision to promulgate part 71

on an interim basis, more consistently

with the existing part 70 rule, the

provisions based upon the August 1994

proposal are not being adopted today.

Moreover, in order to facilitate

transition from implementing part 71 to

part 70 programs, the final rule is being

adopted in a structure that is more

consistent with that of the current part

70 rule.

1. Timely Application

Under section 71.5(b)(1) of the

proposal all initial permit applications

would have to be submitted within 12

months or an earlier date after the

source becomes subject to part 71. The

proposal would have required that the

permitting authority provide notice of

the earlier date to the source and that

this notice would be given at least 120

days in advance of the application

submittal date.

Several commenters argued that the

120 days (4 months) minimum notice

would not give sources sufficient time

to prepare an application. They also

argued that 4 months was insufficient

time for sources to submit their

applications early for purposes of

addressing deficiencies and ensuring

they receive the application shield.

In response to these comments, EPA

has lengthened the notice period from 4
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34215

months to 6 months. Section 503(c) of

the Act requires the submittal of all

applications within 12 months of the

effective date of a permit program or

such earlier date as the permitting

authority may establish and that onethird of these applicants be issued

permits in this first year. In order to

issue one-third of the permits in the first

year, EPA must receive at least one-third

of the applications prior to 12 months

after the effective date of the program.

The EPA considered and rejected

commenters’ suggestions for 8 to 12

months’ advance notice because they

would interfere with EPA’s requirement

to issue one-third of the permits in the

first year. The EPA believes that the 6

month alternative will allow EPA

enough time to process and issue

permits. The EPA believes that 6

months is sufficient time for sources to

prepare applications for several reasons

that had not been announced at time of

proposal. First, on July 10, 1995, EPA

issued the first white paper that

examines options for simplifying part 70

permit applications and sets minimum

expectations concerning how much

information must be included in order

for the application to be found

complete. In today’s notice EPA

announces its intention to implement

both of the white papers for part 71

program purposes. Second, EPA has

revised the rule to clarify that part 71

permit application forms may be

developed by the delegate agency or the

EPA allowing a part 71 application form

to be based on a State form developed

for part 70 purposes, as long as the form

meets the minimum requirements of

part 71 (discussed in more detail

below). Third, because the final rule

more closely follows the part 70

program upon which most State

operating programs are based, sources

will be familiar with most part 71

permit application requirements.

In addition, proposed sections 71.5(b)

(2) and (3) have been deleted because

they referred to off-permit changes and

a four-track permit revision system

which the Agency is not finalizing

today.

2. Complete Applications

The final rule adopts the language

from the current part 70 rule concerning

complete applications. However, EPA

believes that several clarifications will

help applicants understand the

flexibility available for submitting

simplified permit applications that can

be found complete. The terms

‘‘simplified permit application’’ or

‘‘streamlined permit application’’ refer

to applications that require less

information.

In the part 71 proposal, EPA proposed

to adopt language from the August 29,

1994 part 70 revision notice (59 FR

44518) that would have clarified that an

application would be found complete if

it contained information ‘‘sufficient to

begin processing the application.’’ As

stated previously, today’s rulemaking is

based on provisions of current part 70;

therefore, this language does not appear

in today’s rulemaking. However, EPA

believes, as stated more fully in the first

white paper, that considerable

flexibility already exists in the part 70

rule to find simplified permit

applications complete. Since the white

papers will be implemented for part 71

purposes, this flexibility also exists in

the part 71 permit program.

Furthermore, the proposed revisions

to part 70 (August 29, 1994) and the part

71 proposal discussed several additional

options currently available to States for

developing simplified permit

applications and finding them complete,

and did not propose any rule changes

necessary to implement these options.

These options were: (1) a two-step

application completeness determination

process for simplified applications and

(2) simplified application content

requirements for applicable

requirements with future compliance

dates. After the publication of these

proposal notices, the first white paper

included these two flexibility options,

as well as many additional options, and

reaffirmed EPA’s interpretation that

implementation of these options does

not depend on making changes to the

part 70 rule or State part 70 programs.

The EPA believes this approach will

provide flexibility for sources to prepare

simplified permit applications and for

permitting authorities to find them

complete. This approach will also

promote consistency between the part

71 and part 70 programs, which in turn,

will provide for a smoother transition

between the programs. Guidance on the

implementation of the white papers and

other flexibility options for

completeness determinations for a part

71 program implemented in a particular

State may be provided by the EPA or

delegate agency soon after the program

takes effect.

Additionally, proposed section

71.5(d), concerning the treatment of

business confidential information, has

been revised in the final rule. The

language of the proposal discussed the

responsibilities of permitting authorities

to process requests for confidential

treatment and included a general

reference to 40 CFR part 2. Considering

the structure of these regulations and

this section’s position in these

regulations, the Agency believes that the

promulgated language clarifies the

procedures that applicants must follow

to request confidential treatment for

business information in applications,

provides a more precise cross-reference

to those procedures, and does not add

any new requirements regarding the

treatment of confidential information

not intended by the proposal.

Note also that certain technical

changes are being made to part 71’s

completeness provisions as a result of

the final rule’s greater harmonization

with the existing part 70 rule. First, the

completeness criteria are being

promulgated at section 71.5(a)(2) while

the proposal addressed completeness at

section 71.5(c). In addition, the final

rule references section 71.5(c) as the

provision setting out required

information in permit applications,

while the proposal referenced proposed

section 71.5(f). Moreover, the final rule

cites section 71.5(d) as the provision

concerning certification by a responsible

official, while the proposal cited

proposed section 71.5(i). Finally, the

citation in the proposal to section

71.7(a)(3) has been changed in the final

rule to section 71.7(c)(4) as a result of

the changes to section 71.7.

3. Standard Application Form and

Required Application

Proposed section 71.5(f) would have

required part 71 sources to submit

‘‘applications provided by the

permitting authority, or if provided by

the permitting authority, an electronic

reporting method’’ and did not include

any preamble discussion of the

interpretation of this phase. One

commenter on the proposal encouraged

EPA to use existing State forms in States

where EPA assumes part 71 authority.

Final section 71.5(c) has been revised to

more closely follow the corresponding

language of section 70.5(c). The EPA

agrees with the commenter and will

provide forms developed by delegate

agencies (States), or the EPA, including

electronic application methods, for

purposes of applying for part 71

permits. This approach to application

development is possible because

‘‘permitting authority’’ is defined in

section 71.2 as including the EPA or the

delegate agency. This approach to

providing part 71 forms will lead to less

disruption and a smoother transition for

sources preparing initial part 71

applications because, in many cases,

sources will be familiar with the State

form on which the part 71 form is based.

For example, sources may already be

collecting information and drafting an

operating permit using the State form in

expectation of part 70 program approval

by EPA. In addition, commenters asked
34216 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

that EPA clarify and simplify the

requirements for emissions-related

information in part 71 applications

consistent with EPA’s guidance in the

first white paper. In response to these

comments, EPA intends to implement

the white paper guidance with respect

to the collection and reporting of

emission-related information and EPA

believes that no changes to part 71 are

necessary to do so.

Numerous technical changes have

been made to the final rule regarding

information to be required in permit

applications to better match the current

part 70 rule. In the proposal,

information requirements were

addressed at proposed sections 71.5(f)

through (i), while the final rule follows

part 70 by covering these requirements

in sections 71.5(c) and (d). New

citations to other provisions of part 71

are also due to the final rule’s

harmonization with part 70.

4. Insignificant Activities and Emission

Levels

Extensive comments were received on

the proposed insignificant activity and

emission levels provisions of proposed

section 71.5(g). Commenters argued, in

part, that activities subject to applicable

requirements should be eligible for the

exemption for insignificant activities

and emission levels, that the

requirement that applications not

exclude information needed to

determine whether a source is subject to

the requirement to obtain a part 71

permit would be too restrictive, that the

list of insignificant activities in the final

rule should be expanded, that the list of

trivial activities in the first white paper

should be codified in part 71, that the

exemption for mobile sources as

insignificant activities should be

removed, that the single emissions unit

emissions thresholds for insignificant

emissions should be raised, and that the

aggregate source-wide emission

thresholds for insignificant emissions

should be deleted.

a. Eligibility for Insignificant

Treatment and Information Required in

Applications. Section 71.5(c) of the final

rule addresses, in part, information that

must not be omitted from permit

applications. These requirements have

special relevance for applicants when

determining what information must be

included in applications for emission

units that are eligible for insignificant

treatment. To be consistent with current

part 70, final section 71.5(c) deletes

certain proposed provisions that do not

follow the corresponding language of

section 70.5(c) and that were based

upon the proposed revisions to part 70

published in August 1994. Accordingly,

deleted from final section 71.5(c) is the

proposed language that would have not

allowed the application to omit

information needed to: (1) Determine

whether a source is major, and (2)

determine whether a source is subject to

the requirement to obtain a part 71

permit. Notwithstanding these

deletions, EPA continues to believe that

the definition of major source at section

71.2 controls the determination of

which units are counted for major

source applicability purposes and that

emissions of units that qualify for

insignificant treatment in the

application are not exempt from these

determinations. Consistent with the

Agency’s approach in implementing the

current part 70 rule, the EPA is

reversing its interpretation, first

expressed in the proposed preamble,

that would have excluded the eligibility

of activities for treatment as

insignificant when such activities are

subject to applicable requirements. The

EPA believes that no change to the final

rule is necessary to implement this new

interpretation.

Industry commenters were

particularly concerned that EPA’s

interpretation that proposed section

71.5(g) would not allow activities with

applicable requirements to be eligible

for insignificant treatment would render

the insignificant activity and emissions

level provisions meaningless because

few sources would be eligible for

streamlined treatment in the

application.

The EPA now believes that it was

overly broad in stating that emission

units were precluded from eligibility as

‘‘insignificant’’ if such units would be

subject to applicable requirements. As

discussed below, EPA believes there are

circumstances in which an emission

unit or activity can be treated as

‘‘insignificant’’ under a Federal

operating permits program, even if it is

subject to an applicable requirement.

However, a title V application must still

contain information needed to

determine the applicability of or to

impose any applicable requirement or

any required fee and a permit must still

meet the requirements of section 71.6

for all emission units subject to

applicable requirements, including

those eligible for insignificant treatment.

Both sections 71.5(c) and 71.5(c)(3)(i)

require sufficient information to verify

the requirements applicable to the

source and to collect appropriate permit

fees.

This means that some of the

information required by sections 71.5(c)

(3) through (9) may be needed in the

permit application for insignificant

activities in order for the permitting

authority to draft an adequate operating

permit. As an example, where an

insignificant activity is not in

compliance with an applicable

requirement at the time of permit

issuance, the permit application would

need to contain a compliance plan,

including a compliance schedule, for

achieving compliance with the

applicable requirement. As another

example, if a source has some

insignificant activities within a category

that are subject to an applicable

requirement and some within that same

category that are not subject to that

applicable requirement because the

applicability criteria for the applicable

requirement are different from the

applicability criteria for insignificant

activities, the permit application would

generally be required to include

sufficient information on the

insignificant activity for the permitting

authority to determine which units are

subject to the applicable requirement

and to include that applicable

requirement in the permit for the subject

insignificant activity. The EPA believes

that a part 71 permit application may

simply list the applicable requirements

that apply to insignificant activities

generally, rather than requiring the

permit application to explicitly identify

which insignificant activities are subject

to which applicable requirements. The

permitting authority would then issue a

permit imposing the applicable

requirements in the permit, but not

specifically identifying which

insignificant activities are subject to

those applicable requirements. (For a

more detailed discussion, see the first

white paper and the proposed interim

approval and proposed notice of

correction for the State of Washington’s

part 70 program, 60 FR 50166

(September 28, 1995).)

b. Insignificant Activity Lists. Section

70.5(c), in part, allows States to develop

lists of insignificant activities and

emission levels that need not be

included in applications and requires

activities (or equipment) exempted due

to size or production rate to be listed in

the application. State part 70 program

submittals were approved by EPA that

implement this provision in a variety of

ways. The structure of the proposed

regulations was based on the structure

of these State implementing regulations,

and included a short list of insignificant

activities and provisions setting

insignificant emissions levels. The

proposed list of insignificant activities,

section 71.5(g)(1), included a list of

specific source categories, activities, or

equipment that could be left off the

application. The proposed insignificant
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34217

emissions provisions, section 71.5(g)(ii),

allowed sources the flexibility to treat

additional source categories, equipment,

or activities as insignificant, provided

certain eligibility criteria were met,

including not exceeding certain

emissions levels, and provided that the

activities were listed in the application.

The EPA believed that the proposed

insignificant emissions approach was

flexible enough that extensive lists of

insignificant activities would not be

needed in the final rule. The EPA

reasoned that no list of insignificant

activities would ever be so inclusive as

to list every type of activity potentially

eligible for insignificant treatment at

industrial sources, and therefore,

additions to the list would require

resource-intensive notice and comment

rulemaking on an ongoing basis. The

proposal asked for comment on its

approach and asked whether the

proposed approach would be

compatible with approaches developed

by States.

Numerous industry commenters

argued, in general, that the proposed

part 71 list was not extensive enough to

provide meaningful relief for industry

from the administrative burdens

associated with submitting detailed

information for emission units or

activities that pose little or no

environmental risk and that the part 71

list was not as extensive as lists

developed by States for their part 70

programs.

The EPA is finalizing the proposed

list of insignificant activities with one

revision. The EPA believes that the

commenters’ concerns that there be

more opportunities for streamlining the

information required by part 71 permit

applications is best addressed by

implementing the white papers for part

71 purposes, and that no changes to the

final rule are necessary to implement

this approach. The EPA believes that the

white papers provide for application

streamlining that is comparable and, in

many ways, superior to approaches

based on omitting certain emission unit

or activities from the application only

when eligibility for insignificant

treatment is established in a rule. In

general, the white papers allow sources

to provide little or no detailed sourcespecific information for emissions units

or activities where the information is

not reasonably available and to the

extent the information is not needed to

resolve disputed questions of major

source status, applicability of

requirements, compliance with

applicable requirements, or needed to

calculate fees.

For example, section B.3. Insignificant

Activities of the first white paper allows

trivial activities to be completely

omitted from applications. The white

paper defines trivial activities as

activities without specific applicable

requirements (although they may have

‘‘generic’’ applicable requirements,

explained below) and with extremely

small emissions and included a list of

trivial activities in Appendix A. Many

of the trivial activities identified in the

first white paper are common to State

lists of insignificant activities. Under

part 71, sources may rely on this list,

and EPA or the delegate agency may add

to it without the need for Federal

rulemaking. This allows EPA to expand

the list of trivial activities for a part 71

program in a specific location,

consistent with trivial activity lists

established in the State operating permit

program, thus tailoring the program for

a specific program implemented in a

State.

Also providing considerable

streamlining is section B.4 Generic

Grouping of Emission Units and

Activities of the first white paper which

allows emissions units or activities with

‘‘generic’’ applicable requirements to be

omitted from the application,

independent of eligibility for

insignificant treatment. Under this

section, sources may provide little or no

detailed source-specific information,

even for units with ‘‘generic’’

requirements, provided that the

‘‘generic’’ requirements are described in

the application such that their scope

and manner of enforcement are clear.

‘‘Generic’’ requirements are certain

broadly applicable requirements that

apply and are enforced in the same

manner for all subject units or activities

and that are often found in the SIP.

Examples of such requirements include

requirements that apply identically to

all emissions units at a facility (e.g.,

source-wide opacity limits), general

housekeeping requirements, and

requirements that apply identical

emissions limits to small units (e.g.,

certain process weight requirements).

Where the applicable requirement is

amenable to this approach, part 71

permitting authorities may follow this

approach regardless of whether subject

activities have been listed as trivial or

insignificant. A lengthy list of the types

of requirements suitable for this

treatment is not possible here because,

among other reasons, the examples of

which EPA is aware are SIP

requirements, and so vary from State to

State. The EPA or delegate agency will

decide which SIP requirements can be

treated in this generic fashion for

specific locations where part 71

programs are implemented.

The EPA has determined that the

insignificant activity exemption for airconditioning units used for human

comfort at final section 71.5(c)(11)(i)(B)

should be changed to clarify that

substances other than class I or II

substances may be regulated under title

VI of the Act. This change is necessary

because effective November 15, 1995,

title VI requires recycling or recovery of

substitute refrigerants regardless of

whether or not they are ozone depleting

substances (Class I and Class II

substances) unless EPA makes a

refrigerant-specific decision that the

substitute will not harm human health

or the environment and can, therefore,

be vented.

c. Insignificant Emissions Levels. In

response to comments, EPA has revised

proposed section 71.5(g)(2)(i), which is

section 71.5(c)(11)(ii)(A) of the final

rule, to increase the insignificant

emissions threshold for regulated air

pollutants other than (HAP) from a

single emissions unit from 1 tpy to 2 tpy

and to delete the 1,000 pounds (lb) per

year threshold in extreme ozone

nonattainment areas. The EPA believes

this decision is appropriate since, as

commenters pointed out, EPA has

previously stated in part 70 approval

notices that insignificant emissions

thresholds set at 2 tpy would be

approvable in most locations. The EPA

believes that due to the similarity

between part 70 and part 71 programs

it can logically conclude that this level

is also appropriate for a part 71

program, regardless of where it is

located. This level will provide a

measure of additional flexibility for

sources to exempt insignificant

activities, thus simplifying the

application, with little additional risk

that significant emission units will be

excluded from the application. As

further discussed below, there are

several safeguards available in the final

rule that should ensure that significant

units are not excluded from applications

due to their eligibility for insignificant

treatment. In addition, EPA is deleting

the proposed 1,000 lb per year threshold

for extreme ozone nonattainment areas.

This will simplify the rule by setting the

same tpy emission thresholds for

attainment and nonattainment

pollutants, while requiring the

thresholds in relative terms to be no

more than 20 percent of the major

source threshold for nitrogen oxides and

VOC and 2 percent of the major source

threshold for the remaining criteria

pollutants. Two tpy is considered trivial

by EPA for all pollutants other than

HAP in relation to major source

thresholds in all attainment or
34218 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

nonattainment areas and will not

prevent the EPA from collecting

information of a consequential or

significant nature. In addition, these

levels are more commonly found in

State part 70 programs and therefore

should help to ease the transition from

part 71 to part 70 operating permit

programs.

In response to comments, EPA has

decided to delete the aggregate sourcewide emissions criteria for insignificant

emissions of regulated air pollutants

(sections 71.5(c)(11)(ii) (A) and (B) of

the final rule). The EPA proposed these

aggregate source-wide emissions criteria

as an additional means to ensure that

emissions that might otherwise trigger

the applicability of applicable

requirements or major source status

would not be excluded from

applications. However, EPA now

believes that the proposed aggregate

emissions thresholds would have

significantly limited the value of the

insignificant emissions provisions for

most medium to large sources. This

deletion should not impede the

permitting authority’s ability to write

permits which assure compliance with

applicable requirements and the

requirements of part 71. The EPA also

believes that the utility of aggregate

plant-wide thresholds is negligible

because of various other safeguards

already provided in the rule; in

particular, section 71.5(c)(11) requires

applications to not exclude information

needed to determine the applicability

of, or to impose, any applicable

requirement. In addition, the

requirement of section 71.5(c)(11)(ii)

that units or activities with insignificant

emissions be listed in the application

provides an opportunity for the

permitting authority to review the

source’s decision to treat emissions as

insignificant, while the single-unit

emissions thresholds of sections

71.5(c)(11)(ii) (A) and (B) limit the size

of emissions to levels that would

normally ensure that the units are not

covered by extensive control

requirements.

5. Compliance Certification

The part 71 proposal would have

required sources to submit certifications

that they were in compliance with all

applicable requirements. Commenters

requested further clarification of the

certification requirements and argued

that it was not clear exactly what efforts

a source was required to make to

determine its compliance status prior to

certifying that it was in compliance with

all applicable requirements, and that it

was unclear whether or not a source was

obliged to reconsider past applicability

determinations prior to making such a

certification. The EPA does not believe

that any revisions to the rule are

necessary to address the commenters’

points. This is true because the white

papers for part 70 address these issues

and sources may follow that guidance

for purposes of completing part 71

permit applications.

E. Section 71.6—Permit Content

Today’s permit content provisions

more closely track the provisions

contained in current 70.4 and 70.6 than

did those in the proposal. Thus, the

order of the paragraphs in section 71.6

is more similar to the permit content

section of current part 70 than to the

part 71 proposal. For example, the

provisions dealing with the permitting

authority’s duty to address emissions

units in the permit has been moved

from section 71.6(a)(iv) to section

71.3(c), consistent with current part 70.

In addition, using current part 70 as the

template for permit content means that

the provisions for ‘‘off-permit’’

contained in today’s rulemaking mirror

those found at section 70.4(b), while the

off-permit provisions of the proposed

rule tracked those contained in the

August 1994 proposed revisions to part

70. Similarly, today’s rulemaking adopts

the requirements for emissions trading

and operational flexibility that are

found in current part 70.

In addition, EPA retains a provision

related to the prompt reporting of

deviations from permit conditions from

the part 71 proposal. Current part 70

requires States to define ‘‘prompt’’ in

their own programs, and today’s

rulemaking defines the term for the part

71 program and closes this gap in the

proposed rule. Today’s rulemaking also

establishes a part 71 permit expiration

date.

The EPA reiterates that today’s

rulemaking finalizes provisions for

permit content on an interim basis in

order to better facilitate smooth

transition from implementation of part

71 to approved State programs

established pursuant to the current part

70 rule. With respect to permit content

provisions, the April 1995 and August

1995 proposals contain provisions

which reflect the Agency’s current best

thinking, and subsequent to reviewing

all of the comments on both proposals,

EPA may finalize provisions for permit

content that differ from those adopted

today consistent with the approaches

EPA eventually takes in promulgating

final revisions to part 70.

1. Off-permit Operations

Under today’s rulemaking, sources are

allowed to make changes at a facility

that are not addressed or prohibited by

the permit terms, provided they meet

the requirements of section 71.6(a)(12).

The provision adopted today is

patterned on 70.4(b) (14) and (15), the

analogous provisions in current part 70.

Like part 70, part 71 requires that the

source provide the permitting authority

with contemporaneous written

notification for these types of changes,

that these changes be incorporated into

the permit at renewal, and that the

source keep certain records of these

changes. Consistent with current part

70, section 71.6(a)(12) limits off-permit

changes to those that do not constitute

title I modifications, are not subject to

any requirements under title IV of the

Act, and meet all applicable

requirements of the Act. In applying this

provision, the Agency will use the

interpretation of the term ‘‘title I

modification’’ that States are allowed to

use under the current part 70 rule. EPA

expects that allows a significant number

of minor NSR changes, to the extent that

they are not prohibited by the title V

permit, to qualify for off-permit

treatment.

Like part 70, part 71 does not allow

off-permit changes to alter the permitted

facility’s obligation to comply with the

compliance provisions of its title V

permit and does not grant the permit

shield to off-permit changes. For a more

thorough discussion of the concept of

off-permit changes, see the rationale for

part 70’s off-permit provision found at

57 FR 32269.

The part 71 proposal contained a

modified off-permit provision at

proposed section 71.6(q) that was

designed in light of the four-track

permit revision procedures contained in

the proposal and modeled on the offpermit provision contained in the

August 1994 proposed revisions to part

70. Proposed section 71.6(q) would have

allowed certain changes to remain offpermit but would have required the

source to submit an application to revise

its permit to reflect that change within

6 months of commencing operation of

that change. In the August 1995

supplemental proposal to parts 70 and

71, the Agency indicated that off-permit

provisions may be unnecessary if the

streamlined permit revisions procedures

for parts 70 and 71 are adopted as

proposed therein. After reviewing

comments on both proposals, EPA will

decide whether to retain an off-permit

provision in the Phase II rulemaking,

consistent with the approach EPA takes

in finalizing permit revisions

procedures. Off-permit treatment is

available in the interim, consistent with

that provided by current part 70, but

EPA does not believe that many permits
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34219

will be issued prior to the Phase II

rulemaking and that the off-permit

provision therefore will not be greatly

utilized.

2. Operational Flexibility

Under the rule adopted today, sources

will enjoy the same operational

flexibility as is provided to part 70

sources under current part 70. Section

502(b)(10) of the Act requires that the

minimum elements of an approvable

permit program include provisions to

allow changes within a permitted

facility without requiring a permit

revision. In the current part 70 rule at

section 70.4(b)(12) (i)–(iii), and the rule

adopted today, there are three different

methods for implementing this

mandate. Accordingly, section

71.6(a)(13)(i) provides for sources to

make certain changes within a

permitted facility that contravene

specific permit terms without requiring

a permit revision, as long as the source

does not exceed the emissions allowable

under the permit and the change is not

a title I modification. Under the

interpretation of the term ‘‘title I

modification’’ that EPA is allowing

States to take under the current part 70

rule, section 502(b)(10) changes may

include changes subject to minor NSR,

provided the change does not exceed

the emissions allowable under the

permit. Section 71.6(a)(13)(ii) also

allows emissions trading at the facility

to meet limits in the applicable

implementation plan when the plan

provides for such trading on 7-days

notice in cases where trading is not

already provided for in the permit.

Additionally, section 71.6(a)(13)(iii)

allows emissions trading for the purpose

of complying with a federallyenforceable emissions cap that is

established in the permit independent

of otherwise applicable requirements.

For a thorough discussion of the

flexibility allowed under the analogous

part 70 provisions, see 57 FR 32266.

The part 71 proposal contained an

approach to operational flexibility that

was modeled on the August 1994

proposed revisions to part 70, not

current part 70. The August 1995

supplemental proposal suggested

further refinements to the concept. After

reviewing comments on both proposals,

EPA may adopt an approach to

operational flexibility that is different

from the one found in today’s

rulemaking, consistent with the

approach EPA takes in finally revising

part 70. While the approach adopted

today differs significantly from that of

the proposal, the Agency is adopting it

on an interim basis in order to better

facilitate transition to the State part 70

programs that are similarly based on the

provisions governing operational

flexibility under the current part 70

rule.

3. Affirmative Defense

In order to remain consistent with

current part 70, EPA is adopting a

provision from the part 71 proposal that

would allow sources to assert an

affirmative defense to an enforcement

action based on noncompliance with

certain requirements due to an

emergency. Such a defense would be

independent of any emergency or upset

provision contained in an applicable

requirement. See section 71.6(g). This

provision is consistent with that found

in the current part 70 rule at section

70.6(g).

As a result of concerns identified in

legal challenges to part 70, the Agency,

in the August 1995 supplemental

proposal, solicited comment on the

need for, scope and terms of an

emergency affirmative defense

provision. The Agency is reviewing

those comments, but has not yet made

a decision on whether or not to modify

or remove this additional affirmative

defense provision from part 70. The

Agency will make part 71 consistent

with the decision reached for part 70 in

the part 71 Phase II promulgation. In the

interim, sources may rely on the

affirmative defense offered by section

71.6(g).

4. Definition of Prompt Reporting

The proposal contained provisions

concerning prompt reporting of

deviations from permitting requirements

at proposed sections 71.6(f) (3) and (4).

The final rule at section 71.6(a)(3)(iii)

requires that each permit contain

provisions for prompt notification of

deviations.

Two commenters requested that the

prompt reporting deadlines in part 71 be

adjusted to reflect other environmental

regulation timelines or to reflect State

program guidelines that have been

approved by the Agency for part 70

programs. The Agency disagrees with

the request. Section 503(b)(2) of the Act

requires permittees to promptly report

any deviations from permit

requirements to the permitting

authority. Since individual permitting

authorities are responsible for having

programs to attain and/or maintain air

quality within their geographical

boundaries, they are obligated under the

operating permits program to determine,

among other things, what constitutes a

prompt notification. Included as factors

in determining prompt notification

would be elements such as pollutant

concentration, deviation duration, and

authority response time. Because

sources and pollutants of concern vary

among permitting authorities, States

have adopted differing prompt reporting

schedules. The Agency has reviewed its

obligation to protect air quality on a

national level, and has determined that

its prompt reporting deadline is

appropriate for this obligation.

Therefore the deadlines contained in

part 71 remain unchanged from the

proposal.

Two commenters requested that part

71 clarify prompt reporting

requirements for deviations other than

those associated with hazardous, toxic,

or regulated air pollutants, as described

in sections 71.6(a)(3)(iii)(B)(1) and (2).

The Agency believes that the

requirement contained in section

71.6(a)(3)(iii)(A), in which sources are to

report all instances of deviations from

permit requirements at least every 6

months, provides the basis for prompt

reporting of all other deviations.

However, the Agency is willing to

clarify this reporting requirement and

has modified section 71.6(a)(3)(iii)(B) by

adding a statement that directs sources

to submit all other deviation reports in

accordance with the timeframe given in

section 71.6(a)(3)(iii)(A).

5. Inclusion of Federally Enforceable

Applicable Requirements in Permits

Two commenters requested that EPA

include in part 71 the analogue to

section 70.6(b)(2), a provision that

requires the permitting authority to

identify in the permit any applicable

requirements that are not federally

enforceable. The EPA disagrees with

this request because part 71 permits will

not include any non-federally

enforceable applicable requirements;

therefore, a requirement for the Agency

to identify such terms as non-federally

enforceable would be moot, and a part

71 analogue to section 70.6(b)(2) is not

needed. Part 71 differs from part 70 in

this respect. However, section 71.6(b) is

consistent with the first paragraph of

section 70.6(b), which provides that part

70 permit terms and conditions are to

otherwise be federally enforceable.

6. General Permits

The proposal contained provisions at

proposed section 71.6(l) addressing

general permits, which were based on

the proposed revisions to the general

permits provisions in the August 1994

notice. Under part 70, the EPA afforded

other permitting authorities the choice

of utilizing general permits, and the

Agency intended to provide this

flexibility to itself. The Agency believes

that general permits offer cost-effective

means of issuing permits for certain
34220 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

source categories. The Agency has not

yet decided on the proper approach

concerning opportunities for public

review and judicial review associated

with general permits, and in the interim,

has decided to remain consistent with

the current part 70 rule. Therefore,

under today’s notice, EPA’s

authorization to allow a source to

operate pursuant to a general permit

may proceed without public notice and

does not constitute final permit action

for judicial review purposes. Today’s

part 71 general permit provisions are

found at section 71.6(d) and are

patterned after the analogous provisions

at current section 70.6(d). In the Phase

II rulemaking, EPA intends to revise the

part 71 general permit provisions if

necessary to remain consistent with the

approach the Agency ultimately takes in

the final revisions to part 70.

7. Permit Expiration

The proposed rule contained a

provision for rescinding part 71 permits

at proposed section 71.4(l)(3). Under

today’s rulemaking at section

71.6(a)(11), part 71 permits would

contain a provision that automatically

cancels the part 71 permit upon

expiration of the initial permit term or

upon issuance of a part 70 permit,

without the need for separate action to

rescind the permit. The Agency believes

that a clear expiration date is necessary

in order to avoid potential confusion

over which title V permit terms and

conditions are valid. The majority of

permitting authorities are moving

towards final approval of part 70

programs. In those few instances where

a particular permitting authority may

not have final part 70 program

acceptance by the deadline for

implementation of part 71, the Agency

expects that final program approval will

occur well before the 5-year part 71

permit term (12 years for certain

municipal waste combustors) has

expired. Once the part 70 program is

approved, sources and permitting

authorities may desire to begin

implementation as soon as possible. The

Agency has no desire to be a stumbling

block in those efforts, nor does the

Agency wish to promote confusion over

which permit (part 71 or 70) would be

in effect at a particular time.

One of the purposes of title V was to

provide sources with certainty as to

their applicable requirements. Part 71

and part 70 permits will be similar, but

not necessarily congruent, e.g., part 71

permits would contain only federallyenforceable requirements, insignificant

activities could differ, and reporting

provisions would differ. In order to

prevent the potential confusion

stemming from an unexpired part 71

permit remaining in effect concurrent

with a part 70 permit, the Agency has

decided to preclude the event from

occurring. No such comparable

provisions are needed in part 70

because that program provides just one

title V permit per source. Consequently,

section 71.6(a)(11) provides that a part

71 permit automatically expires upon

the earlier of the expiration of its term

or the issuance of a part 70 permit to the

source.

F. Section 71.7—Permit Review,

Issuance, Renewal, Reopenings, and

Revisions

As discussed above, EPA is, on an

interim basis, promulgating final

regulations regarding permit issuance,

renewal, reopenings, and revisions for

part 71 that are based upon the existing

provisions governing State title V

programs at 40 CFR, section 70.7.

Consequently, the provisions adopted

today differ from those contained in the

part 71 proposal, which were based

upon the August 1994 proposed

revisions to part 70. The EPA is still in

the process of adopting revisions to part

70, and thus is not able at this time to

base part 71’s provisions on the

expected future changes to part 70. As

a result, EPA has concluded, in

response to comments, that the most

reasonable approach is to model part

71’s permit issuance, renewal,

reopenings, and revisions procedures on

the corresponding provisions in the

existing part 70 rule. These changes

from the proposal, in addition to other

changes in response to comments, are

identified below.

1. Permitting Authority’s Action on

Permit Application

First, the organization of the

paragraphs has been changed from the

proposal to be consistent with 40 CFR

section 70.7(a). In addition, in section

71.7(a)(1), the word ‘‘modification’’ is

now used in place of the word

‘‘revisions,’’ which was used in the

proposal. This is a technical change to

the rule to make it conform with the

language used in corresponding

provisions in the current part 70 rule.

Also, section 71.7(a)(1)(ii) has been

changed to track section 70.7(a)(1)(ii) by

explicitly providing that changes subject

to minor permit modification

procedures need not comply with the

public participation requirements of

sections 71.7 and 71.11. This change

from the proposal is a result of the

Agency’s adoption in today’s rule of

permit revision procedures modelled on

those contained in the existing part 70

rule. Moreover, section 71.7(a)(1)(iv) has

been adopted without the language

providing that, in some cases, the terms

of the permit need not provide for

compliance with all applicable

requirements that are in force as of the

date of permit issuance. Again, this

change is necessary to make section

71.7(a)(1)(iv) consistent with the

corresponding provision at section

70.7(a)(1)(iv), which does not contain

the proposal’s language. That language

was first proposed in the August 1994

proposed revisions to part 70, and the

Agency is not yet prepared to adopt it

into a final title V rule. Likewise,

section 71.7(a)(1)(v) is being

promulgated without references to the

administrative amendment and de

minimis permit revision procedures

contained in the proposal in order to

better match the current part 70

provisions at section 70.7(a)(1)(v).

Section 71.7(a)(2) is being adopted

without the language in the proposal

which would have required permitting

authorities to take final action within 12

months after receipt of a complete

application for early reductions permits

under section 112(i)(5) of the Act

because regulatory language addressing

this requirement was moved to section

71.4(i)(3). Furthermore, this provision is

being adopted without the language in

the proposal that would have allowed

permitting authorities to delay final

action where an applicant fails to

provide additional information in a

timely manner as requested by the

permitting authority, as section

70.7(a)(2) currently does not provide

such authority.

A new section 71.7(a)(3) is being

promulgated to require the permitting

authority to ensure that priority is given

to taking action on applications for

construction or modification under title

I of the Act. This change is made to

make part 71 consistent with the

corresponding provision in current part

70 at section 70.7(a)(3).

Section 71.7(a)(4) (section 71.7(a)(3)

in the proposal) deletes the references in

the proposal to the proposed regulatory

provisions addressing administrative

amendments, de minimis permit

revisions, and minor permit revisions,

and tracks current section 70.7(a)(4) by

providing that permitting authorities

need not make completeness

determinations for applications for

minor permit modifications. This

change is a result of EPA’s basing

section 71.7 on the current section 70.7.

In addition, sections 71.7(a) (5) and (6)

(sections 71.7(a) (4) and (5) in the

proposal) are renumbered in order to

track existing sections 70.7(a) (5) and

(6).
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34221

The proposal contained a provision at

proposed section 71.7(a)(6) addressing

how draft and final permits may be

issued with respect to applicable

requirements that are approved or

promulgated by EPA during the permit

process. This provision was proposed in

the August 1994 proposed revisions to

part 70 and is not contained in the

current part 70 rule. For the reasons

stated above, EPA is not yet prepared to

adopt it into part 71, and so is deleting

the proposed provision from today’s

final rule.

2. Requirement To Apply for a Permit

One commenter suggested revising

71.7(b) regarding the application shield

to say that the permitting authority must

set a reasonable deadline for the

submission of additional information,

and commented that EPA should not be

able to request information that is

‘‘needed to process the application’’ but

only that which is ‘‘reasonable and

necessary to issue the permit’’. The

Agency disagrees that the regulation

should set a specific deadline for the

submission of additional information

because the determination of what is a

reasonable time will vary depending on

the information requested. Also, EPA

disagrees that there is a distinction

between information needed to process

the application and information that is

reasonable and necessary to issue the

permit.

One commenter suggested revising

section 71.7(b) to allow sources to

operate subsequent to submission of a

complete, but late, application or

application for renewal. The Agency

believes that extending an application

shield to sources that fail to submit

timely applications is inconsistent with

the Act. The proposal for part 70

contained a provision that would have

provided a grace period of up to three

months to submit applications after the

required submittal date. The EPA

deleted this provision from the final

part 70 rule because extending the

application shield to sources that did

not submit a timely application would

have been inconsistent with section

503(c) of the Act. The Agency is

promulgating section 71.7(b) to closely

track the corresponding provision at

current section 70.7(b). Consequently,

the references in proposed section

71.7(b) to the proposed provisions

addressing administrative amendments,

de minimis permit revisions, and minor

permit revisions have been deleted and

replaced by references to provisions

addressing section 502(b)(10) changes

and minor permit modifications. In

addition, the proposal’s reference to

section 71.7(a)(3) has been replaced

with a reference to section 71.7(a)(4),

due to the restructuring of section

71.7(a).

3. Permit Renewal and Expiration

Section 71.7(c) is being promulgated

to more closely match the

corresponding provision under current

section 70.7(c) than did the proposal.

The references in proposed section

71.7(c)(2) to proposed sections 71.5(b)

and 71.5(c) have been replaced by a

reference to section 71.5(a)(1)(iii), due to

the restructuring of section 71.5.

Moreover, section 71.7(c)(2) (section

71.7(c)(3) in the proposal) is being

promulgated without the language that

would have provided that, where the

permitting authority fails to act on a

timely renewal application before the

end of the term of title V permit, the

permit shall remain in effect until the

permitting authority does take final

action. Instead that language (which is

based upon the existing section

70.4(b)(10) of the current part 70 rule)

is being promulgated at section

71.7(c)(3).

4. Permit Revisions

Commenters remarked that the

Federal title V permit program as

proposed in April 1995 would establish

a new, added layer of permitting which

would add unacceptably to the amount

of time needed before a source could

implement process changes. They

suggested that even though the April

1995 permit revision tracks attempt to

build on existing preconstruction

programs, they still pose substantial

new requirements (e.g., new criteria for

adequate prior review in NSR). These

commenters opined that if EPA believes

that insufficient public review is

afforded by existing programs, the

Agency should address those

shortcomings, not start a new process.

Another commenter suggested that

clerical changes should be handled

through notification of the change by an

amendment letter to the permitting

authority that would then be attached to

the permit without any EPA review

until permit renewal. The commenter

further suggested that all minor source

changes which do not violate any

permit term and do not render the

source newly subject to an applicable

requirement should be allowed to

follow this amendment procedure.

Other commenters opined that the April

1995 proposed four track permit

revision procedures were fundamentally

flawed and must be replaced with

simpler procedures. One commenter

suggested that EPA Regions, not just

delegated States, should be authorized

to conduct ‘‘merged processing’’ to add

NSR or section 112(g) terms to title V

permits, if such processing is retained in

the final rule. Some suggested that EPA

promote consistency between part 70

and part 71 permit programs to reduce

confusion for sources that have to make

a transition between different regulatory

programs.

In light of these and other comments,

EPA proposed in August 1995 a revised

permit revision process, developed with

extensive stakeholder input, which

proposes several ways of streamlining

permit revisions, particularly for those

changes subject to prior State review

(e.g., NSR changes). In the interim, as

discussed earlier in this preamble,

rather than adopting the four-track

permit revision system that the Agency

proposed for part 71 on April 25, 1995,

the EPA has decided to adopt, for the

first phase of part 71, the permit

revision system in the current (July

1992) part 70 rule. Current part 70

provides three ways to revise a permit:

the administrative amendment process,

the minor permit modification process

and the significant permit modification

process. The specific regulatory changes

to proposed part 71 taken to adopt these

procedures are described below.

One commenter requested that EPA

not follow the approach to ‘‘title I

Modification’’ in the August 1994

proposed revisions to part 70 in

defining the term for part 71. In

implementing the current part 70 permit

revision procedures during the interim

period, EPA would apply the

interpretation of ‘‘title I modifications’’

that States are allowed to apply under

the current part 70 rule. Under this

interpretation, minor NSR actions may

be incorporated into the title V permit

using the minor permit modification

procedures of current part 70, or

alternatively, may be made as off-permit

changes if they are eligible.

a. Rationale for Providing Interim

Permit Revision Procedures. The

proposal indicated that due to the

ongoing discussions with stakeholders

regarding permit revision procedures

under title V, EPA was considering

finalizing part 71 in the interim without

provisions for permit revision

procedures. Several commenters

suggested that EPA not finalize any

portion of part 71 until permit revision

procedures are finalized because they

will influence how sources design their

initial permit applications. The

commenters argued that sources will

need the ability to obtain expeditious

revisions to permits, and that there is

thus a need for provisions governing

modifications. As discussed previously,

EPA has decided to include the permit

revision procedures of current part 70 in
34222 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

this interim part 71 rule, while reserving

the right to adopt procedures based

upon future changes to part 70, when

part 70 revisions are promulgated and

Phase II of this rule is completed.

The EPA agrees with commenters that

including current part 70 revision

procedures is most appropriate for

several reasons. First, EPA believes that

it is premature to adopt the procedures

proposed in April 1995 for part 71, or

in August 1995 for part 70, because both

of these proposals involve outstanding

issues. Although the August 1995

proposal contains the latest thinking on

streamlined permit revision procedures,

it would be inappropriate to rush to

promulgate a proposed system before

the Agency has taken time to consider

comments on the August 1995 proposal

and arrive at a final position. In the

meantime, the Agency has at its

disposal the permit procedures of the

current part 70 rule under which the

Agency continues to approve State

programs.

Second, industry commenters note

that a clear understanding of permit

revision procedures is important as

sources prepare their part 71 permit

applications. The revision procedures of

part 70 are more clearly understood

than any proposed procedures, having

been promulgated by EPA and adopted

by many State programs. Third,

adopting the existing part 70 permit

revision procedures insures a smooth

transition from a Federal operating

permits program to a State program due

to the similarity between the two

programs.

Finally, the Agency does not believe

that many permit revisions will occur

during Phase I of this program. The

timing of permit issuance under part 71

is such that the Agency believes that

few part 71 permits will be issued and

fewer will need to be revised before

States receive part 70 approval or before

Phase II of part 71 is promulgated.

Permit revision procedures in Phase I of

the part 71 rule become more essential

the longer part 71 programs are in place

without a Phase II rule, which is

possible if the Phase II rulemaking is

delayed.

b. Description of Permit Revision

Procedures. The part 71 proposal

addressed permit revisions at proposed

sections 71.7(d)–(h) using proposed

provisions from the August 1994 part 70

notice. Proposed section 71.7(d) would

have defined when a permit revision is

necessary; proposed section 71.7(e)

would have addressed administrative

amendments; proposed sections 71.7 (f)

and (g) would have addressed de

minimis permit revisions and minor

permit revisions, respectively; and

proposed section 71.7(h) would have

covered significant permit revisions. All

of these provisions have been deleted in

today’s rule, and replaced with new

provisions at sections 71.7 (d) and (e)

that track the corresponding provisions

in the current part 70 rule governing

administrative amendments, minor

permit modifications, and significant

permit modifications. The EPA directs

interested persons to the preamble to

the final part 70 rule, 57 FR 32250 (July

21, 1992) for a detailed description of

these permit revision procedures.

Under section 71.7(d), changes

eligible to be processed as

administrative amendments include

administrative changes such as

correction of typographical errors,

changes in mailing address, ownership

of the source (or part of the source)

unless restricted by title IV, contact

persons, and changes in individuals

who have assigned responsibilities,

(including the responsibility to sign

permit applications). Administrative

permit amendments can be handled by

direct correspondence from the

permitting authority to the facility after

the appropriate information related to

the changes has been supplied by the

facility. As under current part 70,

administrative amendments could also

be used to address ‘‘enhanced NSR’’

changes, to which the permitting

authority could also extend the permit

shield. Sections 71.7(e) (1) and (2),

which address minor permit

modification procedures, are designed

for small changes at a facility which will

not involve complicated regulatory

determinations. A source may make a

change immediately upon filing an

application for a minor permit

modification, prior to the time the

permitting authority, affected States,

and EPA (in the case of a program

delegated pursuant to section 71.10)

review the application. Eligible changes

could be processed individually or in

groups, but the permit shield may not

extend to these changes. Section

71.7(e)(3) covers significant

modifications. In this track, the public,

the permitting authority, affected States,

and EPA (in the case of a program

delegated pursuant to section 71.10)

will review the modification in the same

manner as review during permit

issuance. The permit shield may extend

to changes processed under this track.

5. Permit Reopenings

The proposal addressed permit

reopenings at proposed 71.7 (i) and (j).

These provisions were modeled on the

existing provisions at section 70.7 (f)

and (g), as proposed to be revised in the

August 1994 notice. One of the features

of that approach was a specific

provision for reopening permits to

incorporate new maximum achievable

control technology (MACT) standards

promulgated under section 112 of the

Act. As part 70 has not yet been finally

revised to adopt this approach, it is

premature at this time to adopt it for

part 71. Consequently, in order to more

closely track the current part 70 rule

and promote consistency with State

programs developed and approved

under the current rule, the part 71

provisions for permit reopenings

adopted today at sections 71.7 (f) and (g)

are modeled on the existing provisions

at sections 70.7 (f) and (g), and do not

include the proposed provisions

concerning reopening permits to

incorporate new MACT standards.

G. Section 71.8—Affected State Review

The provisions of section 71.8 differ

from provisions proposed in the part 71

proposal in several respects. First,

because today’s rulemaking adopts

permit revision procedures based on the

current part 70 rule, rather than those

that were proposed in April, the cross

references to section 71.7 were changed

and the reference to de minimis permit

revisions has been deleted. In addition,

the final rule specifically provides,

consistent with part 70, that timing of

notice to affected States of major permit

modifications is not tied to the timing

of notice to the public.

Second, section 71.8(b) is being

adopted to more consistently follow

section 70.8(b)(2) in providing that

where EPA delegates administration of

a part 71 program, the permitting

authority shall transmit notice of refusal

to accept recommendations of an

affected State as part of the permitting

authority’s submittal of the proposed

permit to EPA.

Third, as discussed in section III.B of

this document, a new paragraph (d) has

been added to section 71.8 that requires

that part 71 permitting authorities

provide notice of certain permitting

actions to federally recognized Indian

Tribes. While this is a departure from

what part 70 currently requires of State

permitting authorities, EPA agrees with

commenters who suggested that

federally recognized Indian Tribes

should not be required to establish

compliance with any eligibility criteria

in order to be entitled to notice of

Federal permitting decisions that may

affect Tribal air quality. One commenter

suggested that applying for treatment in

the same manner as a State was a time

consuming and burdensome process for

Indian Tribes and urged the elimination

of that requirement for Tribes to receive

notice of permitting actions. Consistent
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34223

with the Agency’s policy of maintaining

government-to-government

relationships with Indian Tribes, EPA

(and delegate agencies) will notify

federally recognized Indian Tribes of

draft permits that may be issued to

sources that could affect Tribal air

quality, including all draft permits

issued by EPA for the Tribal area and all

draft permits for sources that are within

50 miles of the reservation boundary or

the Tribal area. Accordingly, the Agency

has added a new paragraph that

provides that the part 71 permitting

authority shall send notices of draft

permits to federally recognized Indian

Tribes whose air quality may be affected

by the permitting action. The EPA is

imposing upon itself this responsibility

in order to further its government-togovernment relationship with Tribes.

H. Section 71.9—Permit Fees

1. Two-Phase Promulgation of Fee

Requirements

Consistent with the two-phased

approach to part 71 promulgation

described in this notice, EPA is today

adopting a two-phased approach to part

71 fee requirements. Upon Phase I

promulgation, collection of fees should

be sufficient to cover the anticipated

program costs of Phase I. On the other

hand, because the cost of Phase II is tied

to procedures which will not be

finalized until the Phase II rulemaking

(i.e., revised and streamlined permit

revision procedures), a fee amount for

Phase II cannot be finalized in today’s

rule. Thus, the Phase I fee covers all

program costs except those associated

with permit revisions which are

excluded because the Phase II

rulemaking will finalize streamlined

permit revision procedures that will

ultimately differ substantially from

those contained in today’s rule. Instead,

the Phase II rulemaking will add to the

fee the costs for the new permit revision

procedures when they are finalized.

More information on the determination

of specific activities and costs

associated with each phase is contained

in the document entitled ‘‘Federal

Operating Permits Program Costs and

Fee Analysis (Revised),’’ which is

contained in the docket for this

rulemaking.

The two-phased approach to fee

requirements will not impact the

ultimate fee amount owed by a source.

For the majority of sources, EPA expects

that the part 71 application and

associated fee submittal will occur after

the Phase II rulemaking. For these

sources, the fee will be paid all at once.

Sources that submit their applications

prior to the Phase II rulemaking will pay

a Phase I fee in full at the time of

application. The balance of the fee

necessary to cover the costs of the Phase

II provisions will be collected once the

Phase II rule is promulgated. The

specific timing and amount of the Phase

II fee collection will be discussed in the

Phase II rulemaking.

The EPA fully expects that the Phase

II rulemaking finalizing permit revision

procedures will be completed before

any part 71 permits are issued and that

no program costs will be incurred in the

interim period as a result of permit

revisions. However, EPA recognizes that

in the unlikely event that a part 71

permit is both issued and revised (under

the interim revision procedures in

today’s rule) fees will not have yet been

collected to cover the cost of the

revision and that if the Phase II fee is

finalized based on a streamlined permit

revision process, there may be a

shortfall in revenue. However, the

alternative would be to finalize today a

Phase I fee based on the interim revision

procedures that potentially overcharges

sources and would necessitate, if and

when the permit revision procedures are

streamlined as expected, a refund. The

EPA wishes to avoid this unnecessary

and burdensome process.

2. Fee Amount

The part 71 proposal proposed a base

fee amount of $45 per ton/year which

was based on a fee analysis which

projected EPA’s direct and indirect costs

for implementing the part 71 program

nationwide and dividing that by the

total emissions subject to the fee. A

detailed discussion of this methodology

is found in ‘‘Federal Operating Permits

Program Costs and Fee Analysis,’’

which is contained in the docket for this

rulemaking. Using the same basic

methodology as the original fee analysis,

EPA has calculated the costs of Phase I

and has set the base Phase I fee amount

at $32 per ton/year to cover these costs.

The determination of this amount is

contained in the report entitled,

‘‘Federal Operating Permits Program

Costs and Fee Analysis (Revised)’’

(hereafter ‘‘Revised Fee Analysis’’),

which is contained in the docket for this

rulemaking. As proposed, the fee will be

adjusted based on the level of contractor

support needed for those programs

where it is necessary for EPA to use

contractors.

One commenter suggested that the $3

per ton surcharge to cover EPA

oversight of contractor and delegated

programs should be eliminated, noting

that EPA does not charge oversight fees

for State part 70 programs. The EPA

agrees and believes that such a

surcharge would be inconsistent with

the approach taken in part 70. A full

evaluation of the April 1995 comments

was made after the development of the

August 1995 proposal, in which EPA

proposed to eliminate the surcharge.

This evaluation of comments confirmed

the direction EPA took in the August

1995 proposal. Therefore, today’s action

both responds to the April comments

and is consistent with the August 1995

proposal. Accordingly, EPA is today

deleting the surcharge provisions from

sections 71.9(c)(2) and (3). The EPA will

continue to consider any comments

received on the supplemental proposal,

and, if necessary, will take any

additional action on the surcharge in the

Phase II rulemaking.

For reasons similar to those described

in the preceding paragraphs on the

surcharge, the EPA is deleting

‘‘preparing generally applicable

guidance regarding the permit program

or its implementation or enforcement’’

from the list of activities in section

71.9(b) whose costs are subject to fees.

The EPA believes that this category

partially duplicates the fourth category

under section 71.9(b), general

administrative costs. To the extent that

it is not duplicative, it refers to guidance

that is issued before an individual part

71 program is in place. The EPA does

not require that States charge fees for

these activities for part 70 programs,

and the Agency does not believe that

such costs should be included in part 71

fees. This change does not result in a

change in the fee structure because costs

of activities which occur before the

effective date of the part 71 program

were not included in the original fee

analysis. This change simply adjusts the

list of activities in section 71.9(b) to

more accurately reflect the activities

whose costs were included in the fee

analysis. Consistent with the deletion of

the surcharge, the EPA is taking this

action based on comments received on

the part 71 proposal. If adverse public

comment is received regarding this

change as proposed in the August 1995

supplemental proposal, the EPA will

take additional action as necessary in

the Phase II rulemaking.

3. Fees for Delegated Programs

As discussed in the part 71 proposal,

EPA intends to allow delegation of part

71 programs to States in many cases.

Originally, EPA envisioned funding

these delegated part 71 programs with

revenue generated from part 71 fees.

However, EPA is aware that many

delegate agencies have the authority

under State or local law to collect fees

adequate to fund delegated part 71

programs. In some cases, these agencies

could continue to collect fees even
34224 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

though EPA would be collecting part 71

fees. Several commenters pointed out

that this would result in the undesirable

situation of paying fees to two

permitting authorities. On the other

hand, one commenter noted that if a

delegate agency, in deference to part 71,

rescinds its authority to collect fees,

funding for the Small Business

Assistance Program (SBAP) in that State

could be adversely affected.

The EPA believes that the best way to

address both of these situations is to

suspend collection of part 71 fees for

part 71 programs which are fully

delegated to States and for which the

State has adequate authority under State

law to fund fully-delegated part 71

activities with fees collected from part

71 sources. This ensures that State

revenue is available to administer the

program, including the SBAP, while

addressing the commenters’ concerns

about double fees. However, EPA cannot

suspend fee collection for partially

delegated part 71 programs, since in

those situations EPA will still incur

substantial administrative costs.

Suspension of EPA fee collection does

not constitute approval of the State’s fee

structure for part 70 purposes. Rule

language codifying this approach has

been added to section 71.9(c)(2).

The suspension of part 71 fees for

delegated programs was proposed in the

August 1995 supplemental proposal.

While the timing of today’s

promulgation has not allowed thorough

evaluation of comments on that

proposal, the EPA agrees with the

concerns about duplicate fees and the

SBAP which were raised in reference to

the part 71 proposal. A full evaluation

of these comments was made after the

development of the August 1995

proposal on this issue. This evaluation

confirmed the direction EPA had taken

in the August 1995 proposal. Therefore,

today’s action both responds to the

April comments and is consistent with

the August proposal. Furthermore,

today’s action is consistent with EPA’s

position that its fees be based on

program costs, because EPA will not

incur any program costs after it fully

delegates a part 71 program. The EPA

will still evaluate all comments received

on the August 1995 proposal and will

take any necessary additional regulatory

action on the suspension of part 71 fees

for delegated programs in the Phase II

rulemaking.

For part 71 programs that are

delegated but for which EPA does not

waive fee collection, EPA’s policy will

be to continue to collect part 71 fees

itself. The proposed fee amount for part

71 programs was based on the

assumption that certain activities would

be more costly for EPA to implement

than for States due to increased travel,

unfamiliarity with individual sources,

etc. However, commenters pointed out

that when a program is delegated, this

assumption is not applicable. The EPA

agrees with this comment, and is today

promulgating language establishing a

lower part 71 fee for delegated programs

which omits the increased cost

assumption made for EPA-administered

part 71 programs. Where EPA continues

to collect part 71 fees for a fullydelegated program, the Phase I part 71

fee amount will be $24 per ton/year.

The determination of this amount is

contained in the Revised Fee Analysis.

Furthermore, for partially delegated

programs, the part 71 fee that EPA

collects will be lower than the fee for an

EPA-administered program because the

fee will be adjusted to account for the

proportion of effort performed by the

delegate agency at a lower cost. For

these programs, the Administrator will

determine the fee according to the

formula in section 71.9(c)(4).

4. Timing of Fee Payment

The part 71 proposal provided that

sources submitting their initial fee

calculation worksheets must pay onethird of the initial fee upon submittal,

and must pay the balance of the fee

within 4 months. However, EPA

believes that two changes discussed in

today’s preamble make this installment

approach to fee payment infeasible.

First, EPA is promulgating a later due

date for permit applications, which

would mean that under the proposed

installment approach, receipt of twothirds of the fee revenues would be

delayed until the end of the first year of

the program, which would not provide

adequate funding for initial program

activities. Second, EPA is promulgating

a two-phased approach to fee collection.

The EPA believes that it would be

unnecessarily complicated and

potentially confusing to provide for

installment payment of the fee for one

or both phases. For these reasons, EPA

is promulgating language at section

71.9(e)(1) which clarifies that payment

of the full fee amount for the first year

is due upon submittal of the initial fee

calculation worksheet.

In addition, because today’s rule

changes the due date for permit

applications, a change must also be

made to the deadlines for the initial part

71 fee calculation worksheets in the

event that EPA withdraws approval of a

part 70 program. The proposal

contained a schedule for submission of

the fee calculation worksheet based on

SIC code. The due dates ranged from 4

to 7 months after the effective date of

the part 71 program. Changes to section

71.9(f)(1) adjust the fee calculation

worksheet due dates to range from 6 to

9 months after the part 71 effective date,

depending on SIC code.

5. Computation of Emissions Subject to

Fees

A commenter pointed out that the

rule language in proposed section

71.9(c)(5)(ii) inadvertently limits the

4000 ton cap on emissions subject to

fees solely to programs administered by

EPA, not delegated or contractoradministered programs. Accordingly,

the EPA has amended this paragraph to

clarify that the 4000 ton cap applies to

all types of part 71 programs.

6. Penalties

The part 71 proposal contained a

penalty charge of 50 percent of the fee

amount if the fee is not paid within 30

days of the due date. In addition, the

proposal assessed a penalty of 50

percent on underpayments with the 50

percent penalty assessed on the amount

by which the source underpaid the fee

owed. The proposal also provided relief

from the penalty for certain

underpayments where the source is

making an initial fee calculation based

on estimated rather than actual

emissions. The proposal provided that

where the underpayment results from

an underestimate of future emissions

and where the underpayment does not

exceed 20 percent of the fee amount

(i.e., where the source pays more than

80 percent of the fee owed), no penalty

would be assessed.

Some industry commenters were

concerned that establishing a penalty for

underpayment for a source that

underpays by as little as 20 percent

would be too harsh in light of the

uncertainty in making emissions

estimates. Although title V requires a

penalty to be assessed for failure to pay

any fee lawfully imposed by the

Administrator, the EPA agrees that there

is a degree of uncertainty in estimating

emissions, particularly for HAP sources,

which are often smaller, and for which

emission factors are not well-defined.

Upon consideration of comments and

evaluation of the relative uncertainty of

emission estimates for HAP listed

pursuant to section 112(b) of the Act,

the EPA is today promulgating in

section 71.9(l)(4) an underpayment

penalty which differs slightly from the

proposal. For sources who base their

initial fee calculation worksheet on

estimated rather than actual emissions,

the EPA will, for HAP emissions, apply

the penalty to an underpayment of 50

percent or more. The penalty will still

apply to an underpayment of 20 percent
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34225

or more for non-HAP emissions. If a

source is subject to fees for both HAP

and non-HAP emissions, the

underpayment which would trigger a

penalty will be prorated based on what

portion of the source’s emissions are

HAP versus non-HAP. Thus, to

determine whether an underpayment

would incur a penalty, such a source’s

HAP emissions would be multiplied by

the 50 percent rate, and its non-HAP

emissions would be multiplied by the

20 percent rate. The sum of these

emissions rates determines the level of

underpayment which, if exceeded,

would incur the underpayment penalty.

The EPA believes that this approach

offers significant relief to sources faced

with difficulty in accurately estimating

their emissions, while still ensuring that

adequate fee revenues can be collected

in a fair and timely manner.

7. Certification Requirement

The EPA believes that the correct

interpretation of the part 71 certification

requirement at section 71.5(d) is that it

applies to all fee calculation documents.

However, for clarity, EPA is today

adding a requirement to sections 71.9(e)

and (h) which requires certification of

the fee calculation worksheets by a

responsible official. The added language

in section 71.9 is simply a cross

reference to the language in section

71.5(d).

I. Section 71.10—Delegation of Part 71

Program

1. Delegation of Authority Agreement

With respect to the content of

Delegation of Authority Agreements,

EPA wishes to clarify that the adequacy

of State permit fees must be addressed

when EPA waives collection of part 71

permit fees. As described in section

III.F.3 of this preamble, when EPA has

determined that a delegate agency has

raised adequate fee revenue from

sources subject to title V to administer

a fully-delegated part 71 program absent

any financial assistance from EPA, then

EPA will waive collection of part 71

fees. In such a case, the Delegation of

Authority Agreement would specify that

the delegate agency has sufficient

revenue and will collect sufficient

revenue from sources subject to title V

to administer all of its duties as outlined

in the Agreement. The EPA will not

waive fees when the part 71 program is

partially delegated or when the delegate

agency lacks sufficient revenue to fund

the delegated part 71 program.

2. Appeal of Permits

The Agency has revised proposed

section 71.10(i), which addresses the

petition process for permits issued by

delegate agencies. In lieu of restating

which persons and parties may submit

petitions to the Environmental Appeal

Board pursuant to section 71.11(l)(1),

section 71.10(i) provides that the

appeals of permits under delegated

program shall follow the procedures of

section 71.11(l)(1).

3. Transmission of Information to EPA,

Prohibition of Default Issuance, and

EPA Objections

The final rule also makes certain

changes to the proposed provisions

addressing transmission of information

to the Administrator, the prohibition of

default issuance of permits, and EPA

objections to proposed permits at

sections 71.10(d), (f) and (g). Essentially,

these changes are being made today in

order to better harmonize the final rule

with corresponding provisions in the

currently promulgated part 70 rule at

70.8(a), (c) and (e). Regarding

transmission of information to EPA, the

reference in proposed section

71.10(d)(1) to proposed section

71.7(a)(1)(v) has been rewritten, and

proposed paragraphs (2) and (3) have

been merged into it in order to more

closely track part 70. New paragraph (2)

has been adopted in order to achieve

consistency with section 70.8(a)(2).

The provision on prohibition of

default issuance has been changed to

follow the existing provision at section

70.8(e). In proposed section 71.10(f)(2),

EPA had provided that the prohibition

would not apply to permit revisions

processed through the proposed de

minimis permit revision track, following

the August 1994 proposed revisions to

part 70. As that track is not being

adopted in this Phase I rule, the

exception has been deleted.

Finally, section 71.10(g) on EPA

objections has been changed from the

proposal in order to follow the test

established under the current part 70

rule for when EPA would object to

proposed permits, and to follow the

promulgated part 70 language providing

for what shall happen when a

permitting authority refuses to respond

adequately to an EPA objection. This

change includes deletion of the

proposed reference to proposed section

71.7(a)(6), which is not being adopted as

proposed in this final rule.

J. Section 71.11—Administrative

Record, Public Participation, and

Administrative Review

The Agency has chosen to establish

part 71-specific rules in today’s

promulgated section 71.11 for

administrative procedures in order to

clarify for the public and the regulated

community those requirements

associated specifically with Federal

operating permits under title V of the

Act. Today’s promulgated section 71.11

is based closely on the provisions of 40

CFR part 124. Part 124 covers a number

of EPA permitting programs, and the

process of identifying the separate and

distinct requirements associated with

those individual programs can be

complex. The Agency feels that it is

advantageous in this case to describe the

administrative procedures for today’s

promulgated part 71 within the rule

itself, since that will avoid potential

confusion as to which provisions of part

124 apply to the part 71 program, and

since interested parties will not be

required to refer to separate regulations

in discerning applicable administrative

procedures.

Certain aspects of section 71.11 that

would correspond to proposed

streamlined part 71 permit revision

processes discussed in the preamble to

the supplemental part 70 and 71

proposed rules published on August 31,

1995 (60 FR 45529), are not addressed

in today’s notice because the Agency is

not yet prepared to conduct final

rulemaking for those processes. In the

meantime, EPA is promulgating permit

revision processes based on the current

part 70 rule in response to numerous

comments on the proposed part 71.

To accommodate basing part 71’s

permit revision procedures on the

existing part 70 rule, today’s notice

makes certain changes to the regulatory

language of section 71.11 as proposed

on April 27, 1995 (60 FR 20804) in order

to apply administrative procedures to

the permit revision tracks as

appropriate. Changes to the regulatory

language that make reference to permit

revision procedures were made in the

first paragraph of section 71.11 and in

section 71.11(l)(1). These sections make

reference to specific types of permit

revisions which in this promulgated

rule are those permit revision

procedures found in 40 CFR part 70,

rather than the four-track permit

revision procedures in the April 27,

1995 proposed part 71. Section

71.11(l)(1) describes the 30-day period

within which a person may request

review of a final permit decision. For

significant modifications, the 30-day

period begins with the service of notice

of the permitting authority’s action. This

is unchanged from the proposal. For

minor permit modifications and

administrative amendments, the 30-day

period begins on the date the minor

permit modification or administrative

amendment is effective.

Section 71.11(d)(3)(i)(D) has been

modified in response to comments
34226 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

received which noted that under the

proposal a requirement to notify any

unit of local government having

jurisdiction over the area where a source

is located would result in notices to

components of government which have

no relationship to air quality and its

impacts. Promulgated section

71.11(d)(3)(i)(D) stipulates that the local

emergency planning committee (not

‘‘any’’ unit of local government) and

State agencies having authority under

State law with respect to the operation

of the source are among the entities to

receive a copy of notices of activities

described in section 71.11(d)(1)(i).

Additional changes to the regulatory

language of section 71.11 relate to

treatment of a final permit decision as

enforceable and effective where review

by the EAB has been requested. In

proposed sections 71.11(i)(2) and

71.11(l)(6), the Agency proposed that a

final permit decision would become

effective immediately upon issuance of

that decision unless a later effective date

were specified in the decision. It was

pointed out by several commenters that,

in other EPA permitting programs, such

as the Resource Conservation and

Recovery Act and PSD programs, an

appeal request stays the effectiveness of

a final permit decision. See 40 CFR

section 124.15(b)(2). The EPA agrees

that it would be unfair to force

permittees to comply with permit terms

during the time that they are subject to

appeal, and that the proposal was

inappropriately inconsistent with part

124 on this point. Thus, sections

71.11(i)(2) and 71.11(l)(6) have been

promulgated to conform to the

longstanding Agency approach reflected

in 40 CFR section 124.15, so that

permittees are not unfairly required to

comply with permit terms pending their

review by the EAB. Under the final rule,

those specific permit terms and

conditions that are the subject of an

appeal to EAB would be stayed, while

the rest of the permit would become

effective as otherwise provided in

section 71.11(i)(2). Moreover, section

71.11 (i)(2) itself has been changed so

that it better tracks part 124, which

makes final permit issuance decisions

immediately effective only where no

comments requested a change in the

draft permit; otherwise, permits are

effective than sooner than 30 days after

the issuance decision or following the

conclusion of appeal proceedings, as

applicable.

In response to comments which

expressed concern that applicants

should be able to appeal a final permit

decision even in the absence of having

commented on a draft permit, the

Agency believes that applicants can

appeal if the final permit differs from

the draft permit, even if the applicant

did not submit comments on the draft

permit. The Agency does not believe it

would be appropriate to allow

applicants to appeal where the final

permit is identical to the draft permit,

and the applicant had not commented

on the draft permit. It is a far more

efficient use of resources to resolve

permitting issues in the administrative

issuance process, rather than to allow

applicants to raise issues on draft

permits for the first time on appeal. To

further clarify the ability of the

applicant to appeal a final permit, the

following language has been added to

section 71.11(l)(1): ‘‘or other new

grounds that were not reasonably

foreseeable during the public comment

period on the draft permit’’.

Section 71.11(l)(6) has been added,

incorporating language from 40 CFR

part 124. Part 124 establishes general

procedures clarifying the rules to which

appellants are subject in all permit

programs under part 124, and therefore

EPA believes it is appropriate to extend

these provisions to part 71 as well. This

section outlines procedures for motions

for reconsideration of appeals of final

orders. It stipulates a 10 day deadline

for motions, and notes that motions are

to be directed to the EAB, unless the

case had been referred to the

Administrator by the Board, and in

which the Administrator had issued the

final order. The effective date of the

final order is not stayed unless

specifically so ordered by the Board.

One commenter suggested that the

proposal’s requirement of a right to

appeal every permit decision would be

overly burdensome, commenting that

even de minimis revisions would be

subject to appeal. The EPA notes that

final part 71 permitting actions are final

actions for purposes of judicial review

under section 307(b)(1) of the Act.

Consequently, EPA does not have the

discretion to eliminate the opportunity

for judicial review of final part 71

permitting actions. Moreover, EPA

disagrees that requiring administrative

appeal to the EAB as a prerequisite to

judicial review is either redundant or

jeopardizes a source’s ability to rely on

its permit. Requiring administrative

exhaustion of remedies is longstanding

practice in EPA permit programs, and

EPA notes that States with approved

part 70 programs generally require

administrative appeal as a prerequisite

to challenging permits in State court.

Also, in requiring administrative

exhaustion, litigation in Federal court

over permit actions will often be

avoided, thus conserving both public

and private resources. Finally, since

pending administrative appeal sources

will be able to rely on the application

shield, they will not be placed in any

greater ‘‘jeopardy’’ than if they had

directly appealed the final permit to

Federal court.

Changes have been made to section

71.11(n) to replace the term

‘‘Administrator’’ with ‘‘permitting

authority,’’ to allow for those

circumstances where a State has been

delegated a part 71 program by EPA.

IV. Administrative Requirements

A. Docket

The docket for this regulatory action

is A–93–51. All the documents

referenced in this preamble fall into one

of two categories. They are either

reference materials that are considered

to be generally available to the public,

or they are memoranda and reports

prepared specifically for this

rulemaking. Both types of documents

can be found in Docket No. A–93–51.

B. Executive Order 12866

Under Executive Order 12866 (58 FR

51735 (October 4, 1993)), the Agency

must determine whether the regulatory

action is ‘‘significant’’ and therefore

subject to the Office of Management and

Budget (OMB) review and the

requirements of the Executive Order.

The Order defines ‘‘significant’’

regulatory action as one that is likely to

lead to a rule that may:

(1) Have an annual effect on the

economy of $100 million or more,

adversely and materially affecting a

sector of the economy, productivity,

competition, jobs, the environment,

public health or safety, or State, local or

Tribal governments or communities;

(2) Create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter the budgetary

impact of entitlements, grants, user fees,

or loan program or the rights and

obligation of recipients thereof;

(4) Raise novel legal or policy issues

arising out of legal mandates, the

President’s priorities, or the principles

set forth in the Executive Order.

Pursuant to the terms of Executive

Order 12866, it has been determined

that this rule is a ‘‘significant’’

regulatory action. As such, this action

was submitted to OMB for review.

Changes made in response to OMB

suggestions or recommendations will be

documented in the public record.

The EPA has estimated the

annualized cost of the part 71 program

based on the number of sources that

would be subject to part 71 permitting

requirements in the 8 States where EPA
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34227

believes the program will be

implemented. A survey of those States

showed that the number of part 71

sources in those States (many of which

are not heavily industrialized) is much

smaller than EPA’s original estimates.

The EPA had previously assumed that

part 71 sources in 8 States would

comprise 16 percent of all title V

sources. However, in the States where

EPA is likely to administer a part 71

program, the part 71 source population

comprises slightly less than 6 percent of

all title V sources. The estimated

annualized cost of implementing the

part 71 program is $19.8 million to the

Federal government and $18.1 million

to respondents, for a total of $37.9

million which reflects industry’s total

expected costs of complying with the

program. Since any costs incurred by

the Agency in administering a program

would be recaptured through fees

imposed on sources, the true cost to the

Federal government is zero. The

requirements for the costs result from

section 502(d) of title V which mandates

that EPA develop a Federal operating

permits program. The draft regulatory

impact analysis (RIA) was made

available for public comment as part of

the April 27, 1995 proposal. The

primary difference between the current

RIA and the prior draft is that the RIA

now assesses impacts based on the

streamlined permit revision procedures

that were proposed for part 70 and 71

in August of 1995, in lieu of the more

cumbersome 4-track permit revision

procedure that was contained in the part

71 proposal. The proposed program is

designed to improve air quality by:

indirectly improving the quality of

State-administered operating permits

programs; encouraging the adoption of

lower cost control strategies based on

economic incentive approaches;

improving the effectiveness of

enforcement and oversight of source

compliance; facilitating the

implementation of other titles of the

Act, such as title I; and improving the

quality of emissions data and other

source-related data.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (5

U.S.C. 601) requires EPA to consider

potential impacts of proposed

regulations on small entities. If a

preliminary analysis indicates that a

proposed regulation would have a

significant adverse economic impact on

a substantial number of small entities,

then a regulatory flexibility analysis

must be prepared.

The original part 70 rule and the

recently proposed revisions to part 70

were determined to not have a

significant adverse impact on small

entities. See 57 FR 32250, 32294 (July

21, 1992), and 60 FR 45530, 45563 (Aug.

31, 1995). Similarly, a regulatory

flexibility screening analysis of the part

71 rule revealed that the rule would not

have a significant adverse impact on a

substantial number of small entities,

since few small entities would be

subject to part 71 permitting

requirements as a result of the rule’s

deferral of the requirement to obtain a

permit for nonmajor sources.

Consequently, I hereby certify that the

part 71 regulations will not have a

significant adverse effect on a

substantial number of small entities.

D. Paperwork Reduction Act

The OMB has approved the

information collection requirements

contained in this rule under the

provisions of the Paperwork Reduction

Act, 44 U.S.C. 3501 et. seq. and has

assigned OMB control number 2060–

0336.

The information is planned to be

collected to enable EPA to carry out its

obligations under the Act to determine

which sources are subject to the Federal

Operating Permits Program and what

requirements should be included in

permits for sources subject to the

program. Responses to the collection of

information will be mandatory under

section 71.5(a) which requires owners or

operators of sources subject to the

program to submit a timely and

complete permit application and under

sections 71.6 (a) and (c) which require

that permits include requirements

related to recordkeeping and reporting.

As provided in 42 U.S.C. 7661b(e),

sources may assert a business

confidentiality claim for the information

collected under section 114(c) of the

Act.

The annual average burden on sources

for the collection of information is

approximately 678,000 hours per year,

or 329 hours per source. The annual

cost for the collection of information to

respondents is $18.1 million per year.

The EPA has estimated the annualized

costs based on the number of sources

that would be subject to part 71

permitting requirements in the 8 States

where EPA believes the program will be

implemented, most of which have fewer

than average number of part 71 sources

per State. There is no burden for State

and local agencies. The annual cost to

the Federal government is $19.8 million

(assuming part 71 programs are

delegated), which is recovered from

sources through permit fees. Thus, the

total annual cost to sources would be

$37.9 million. Burden means the total

time, effort, or financial resources

expended by persons to generate,

maintain, retain, or disclose or provide

information to or for a Federal agency.

This includes the time needed to review

instructions; develop, acquire, install,

and utilize technology and systems for

the purposes of collecting, validating,

and verifying information, processing

and maintaining information, and

disclosing and providing information;

adjust the existing ways to comply with

any previously applicable instructions

and requirements; train personnel to be

able to respond to a collection of

information; search data sources;

complete and review the collection of

information; and transmit or otherwise

disclose the information.

An Agency may not conduct or

sponsor, and a person is not required to

respond to a collection of information

unless it displays a currently valid OMB

control number. The OMB control

numbers for EPA’s regulations are listed

in 40 CFR Part 9 and 48 CFR Chapter

15. The EPA is amending the table in 40

CFR part 9 of currently approved

information collection request (ICR)

control numbers issued by OMB for

various regulations to list the

information requirements contained in

this final rule.

Send comments on the Agency’s need

for this information, the accuracy of the

provided burden estimates, and any

suggested methods for minimizing

respondent burden, including through

the use of automated collection

techniques, to the Director, Regulatory

Information Division, Office of Policy,

Planning, and Evaluation, U.S.

Environmental Protection Agency

(2136), 401 M Street, S.W., Washington,

DC 20460, and to the Office of

Information and Regulatory Affairs,

Office of Management and Budget, 725

17th St., N.W., Washington, DC 20503,

marked ‘‘Attention: Desk Officer for

EPA.’’ Include the ICR number in any

correspondence.

E. Unfunded Mandates Reform Act

As noted in the ICR document,

today’s action imposes no costs on

State, local and Tribal governments.

This is because the EPA incurs all costs

in cases where it implements a part 71

program. A State, local, or Tribal

government will incur costs where it

elects to take delegation of a part 71

program. As noted in the ICR document,

EPA expects that, of the estimated eight

part 71 programs, States will take

delegation of all eight programs.

However, the costs of running these

delegated programs do not represent

costs imposed by today’s action. This is

because the costs of running a delegated

part 71 program are essentially the same
34228 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

as those of running an approved part 70

program. Furthermore, taking delegation

is optional on the part of States.

Regardless of whether a State, local, or

Tribal agency chooses to take delegation

of a part 71 program, the costs to these

agencies imposed by this rule over and

above the costs of existing part 70

requirements are zero.

Regarding the private sector, the EPA

estimates that the total cost of

complying with the part 71 program

would be $37.9 million per year,

assuming that the part 71 program is in

effect in 8 States. The estimated costs of

collection of information would be

$18.1 million per year, and $19.8

million would be collected in fees.

For these reasons, EPA believes that

the total direct costs to industry under

today’s action would not exceed $100

million in any 1 year. Therefore, the

Agency concludes that it is not required

by Section 202 of the Unfunded

Mandates Reform Act of 1995 to provide

a written statement to accompany this

regulatory action because promulgation

of the rule would not result in the

expenditure by State, local, and Tribal

governments, in the aggregate or by the

private sector, of $100,000,000 or more

in any 1 year.

F. Submission to Congress and the

General Accounting Office

Under section 801(a)(1)(A) of the

Administrative Procedure Act (APA), as

amended by the Small Business

Regulatory Enforcement Fairness Act of

1996, EPA submitted a report containing

this rule and other required information

to the U.S. Senate, the U.S. House of

Representatives, and the Comptroller

General of the General Accounting

Office prior to publication of the rule in

today’s Federal Register. This rule is

not a ‘‘major rule’’ as defined by section

804(2) of the APA as amended.

List of Subjects

40 CFR Part 9

Reporting and Recordkeeping

Requirements

40 CFR Part 55

Environmental Protection Air

pollution control, Outer continental

shelf, Operating permits.

40 CFR Part 71

Air pollution control, Prevention of

significant deterioration, New source

review, Fugitive emissions, Particulate

matter, Volatile organic compounds,

Nitrogen dioxide, Carbon monoxide,

Hydrocarbons, Lead, Operating permits,

Indian Tribes, Air pollution control—

Tribal authority.

Dated: June 19, 1996.

Carol M. Browner,

Administrator.

For the reasons set out in the

preamble, title 40, chapter I of the Code

of Federal Regulations is amended as set

forth below.

PART 9—[AMENDED]

1. In Part 9:

a. The authority citation for part 9

continues to read as follows:

Authority: 7 U.S.C. 135 et seq., 136–136y;

15 U.S.C. 2001, 2003, 2005, 2006, 2601–2671;

21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33

U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318,

1321, 1326, 1330, 1342, 1344, 1345 (d) and

(e), 1361; E.O. 11735, 38 FR 21243, 3 CFR,

1971–1975 Comp. p. 973; 42 U.S.C. 241,

242b, 243, 246, 300f, 300g, 300g–1, 300g–2,

300g–3, 300g–4, 300g–5, 300g–6, 300j–1,

300j–2, 300j–3, 300j–4, 300j–9, 1857 et seq.,

6901–6992k, 7401–7671q, 7542, 9601–9657,

11023, 11048.

b. Section 9.1 is amended by adding

the new entries to the table under the

indicated heading in numerical order to

read as follows:

§ 9.1 OMB approvals under the Paperwork

Reduction Act.

* * * * *

40 CFR Citation OMB control No.

* * * * *

Federal Operating Permit Programs

71.5 ........................................... 2060–0336

71.6(a),(c),(d),(g) ....................... 2060–0336

71.7 ........................................... 2060–0336

71.9(e)–(j) ................................. 2060–0336

* * * * *

PART 55—[AMENDED]

2. The authority citation for part 55

continues to read as follows:

Authority: Section 328 of the Clean Air Act

(Act) (42 U.S.C. 7401, et seq.) as amended by

Public Law 101–549.

3. Section 55.6 is amended by adding

paragraph (c)(3) to read as follows:

§ 55.6 Permit requirements.

* * * * *

(c) * * *

(3) If the COA does not have an

operating permits program approved

pursuant to 40 CFR part 70 or if EPA has

determined that the COA is not

adequately implementing an approved

program, the applicable requirements of

40 CFR part 71, the Federal operating

permits program, shall apply to the OCS

sources. The applicable requirements of

40 CFR part 71 will be implemented and

enforced by the Administrator. The

Administrator may delegate the

authority to implement and enforce all

or part of a Federal operating permits

program to a State pursuant to § 55.11

of this part.

* * * * *

4. Section 55.10 is amended by

revising paragraph (a)(1) and by adding

paragraph (b) to read as follows:

§ 55.10 Fees.

(a) * * *

(1) The EPA will calculate and collect

operating permit fees from OCS sources

in accordance with the requirements of

40 CFR part 71.

* * * * *

(b) The OCS sources located beyond

25 miles of States’ seaward boundaries.

The EPA will calculate and collect

operating permit fees from OCS sources

in accordance with the requirements of

40 CFR part 71.

5. Section 55.13 is amended by

adding paragraph (f) to read as follows:

§ 55.13 Federal requirements that apply to

OCS sources.

* * * * *

(f) 40 CFR part 71 shall apply to OCS

sources:

(1) Located within 25 miles of States’

seaward boundaries if the requirements

of 40 CFR part 71 are in effect in the

COA.

(2) Located beyond 25 miles of States’

seaward boundaries.

(3) When an operating permits

program approved pursuant to 40 CFR

part 70 is in effect in the COA and a

Federal operating permit is issued to

satisfy an EPA objection pursuant to 40

CFR 71.4(e).

* * * * *

PART 71—[AMENDED]

6. The authority citation for part 71

continues to read as follows:

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

7. Subpart A of part 71 consisting of

§§ 71.1 through 71.12 is added to read

as follows:

Subpart A—Operating Permits

Sec.

71.1 Program overview.

71.2 Definitions.

71.3 Sources subject to permitting

requirements.

71.4 Program implementation.

71.5 Permit applications.

71.6 Permit content.

71.7 Permit issuance, renewal, reopenings,

and revisions.

71.8 Affected State review.

71.9 Permit fees.

71.10 Delegation of part 71 program.
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34229

71.11 Administrative record, public

participation, and administrative review.

71.12 Prohibited acts.

Subpart A—Operating Permits

§ 71.1 Program overview.

(a) This part sets forth the

comprehensive Federal air quality

operating permits permitting program

consistent with the requirements of title

V of the Act (42 U.S.C. 7401 et seq.) and

defines the requirements and the

corresponding standards and

procedures by which the Administrator

will issue operating permits. This

permitting program is designed to

promote timely and efficient

implementation of goals and

requirements of the Act.

(b) All sources subject to the operating

permit requirements of title V and this

part shall have a permit to operate that

assures compliance by the source with

all applicable requirements.

(c) The requirements of this part,

including provisions regarding

schedules for submission and approval

or disapproval of permit applications,

shall apply to the permitting of affected

sources under the acid rain program,

except as provided herein or as

modified by title IV of the Act and 40

CFR parts 72 through 78.

(d) Issuance of permits under this part

may be coordinated with issuance of

permits under the Resource

Conservation and Recovery Act (42

U.S.C. 6901 et seq.) and under the Clean

Water Act (33 U.S.C. 1251 et seq.),

whether issued by the State, the U.S.

Environmental Protection Agency

(EPA), or the U.S. Army Corps of

Engineers.

(e) Nothing in this part shall prevent

a State from administering an operating

permits program and establishing more

stringent requirements not inconsistent

with the Act.

§ 71.2 Definitions.

The following definitions apply to

part 71. Except as specifically provided

in this section, terms used in this part

retain the meaning accorded them under

the applicable requirements of the Act.

Act means the Clean Air Act, as

amended, 42 U.S.C. 7401 et seq.

Affected source shall have the

meaning given to it in 40 CFR 72.2.

Affected States are:

(1) All States and Tribal areas whose

air quality may be affected and that are

contiguous to the State or Tribal area in

which the permit, permit modification

or permit renewal is being proposed; or

that are within 50 miles of the permitted

source. A Tribe and any associated

Tribal area shall be treated as a State

under this paragraph (1) only if EPA has

determined that the Tribe is an eligible

Tribe.

(2) The State or Tribal area in which

a part 71 permit, permit modification, or

permit renewal is being proposed. A

Tribe and any associated Tribal area

shall be treated as a State under this

paragraph (2) only if EPA has

determined that the Tribe is an eligible

Tribe.

(3) Those areas within the jurisdiction

of the air pollution control agency for

the area in which a part 71 permit,

permit modification, or permit renewal

is being proposed.

Affected unit shall have the meaning

given to it in 40 CFR 72.2.

Applicable requirement means all of

the following as they apply to emissions

units in a part 71 source (including

requirements that have been

promulgated or approved by EPA

through rulemaking at the time of

issuance but have future compliance

dates):

(1) Any standard or other requirement

provided for in the applicable

implementation plan approved or

promulgated by EPA through

rulemaking under title I of the Act that

implements the relevant requirements of

the Act, including any revisions to that

plan promulgated in part 52 of this

chapter;

(2) Any term or condition of any

preconstruction permits issued pursuant

to regulations approved or promulgated

through rulemaking under title I,

including parts C or D, of the Act;

(3) Any standard or other requirement

under section 111 of the Act, including

section 111(d);

(4) Any standard or other requirement

under section 112 of the Act, including

any requirement concerning accident

prevention under section 112(r)(7) of the

Act;

(5) Any standard or other requirement

of the acid rain program under title IV

of the Act or 40 CFR parts 72 through

78;

(6) Any requirements established

pursuant to section 114(a)(3) or 504(b)

of the Act;

(7) Any standard or other requirement

governing solid waste incineration,

under section 129 of the Act;

(8) Any standard or other requirement

for consumer and commercial products,

under section 183(e) of the Act;

(9) Any standard or other requirement

for tank vessels, under section 183(f) of

the Act;

(10) Any standard or other

requirement of the program to control

air pollution from outer continental

shelf sources, under section 328 of the

Act;

(11) Any standard or other

requirement of the regulations

promulgated at 40 CFR part 82 to

protect stratospheric ozone under title

VI of the Act, unless the Administrator

has determined that such requirements

need not be contained in a title V

permit; and

(12) Any national ambient air quality

standard or increment or visibility

requirement under part C of title I of the

Act, but only as it would apply to

temporary sources permitted pursuant

to section 504(e) of the Act.

Delegate agency means the State air

pollution control agency, local agency,

other State agency, Tribal agency, or

other agency authorized by the

Administrator pursuant to § 71.10 to

carry out all or part of a permit program

under part 71.

Designated representative shall have

the meaning given to it in section

402(26) of the Act and 40 CFR 72.2.

Draft permit means the version of a

permit for which the permitting

authority offers public participation

under § 71.7 or § 71.11 and affected

State review under § 71.8.

Eligible Indian Tribe or eligible Tribe

means a Tribe that has been determined

by EPA to meet the criteria for being

treated in the same manner as a State,

pursuant to the regulations

implementing section 301(d)(2) of the

Act.

Emissions allowable under the permit

means a federally enforceable permit

term or condition determined at

issuance to be required by an applicable

requirement that establishes an

emissions limit (including a work

practice standard) or a federally

enforceable emissions cap that the

source has assumed to avoid an

applicable requirement to which the

source would otherwise be subject.

Emissions unit means any part or

activity of a stationary source that emits

or has the potential to emit any

regulated air pollutant or any pollutant

listed under section 112(b) of the Act.

This term is not meant to alter or affect

the definition of the term ‘‘unit’’ for

purposes of title IV of the Act.

EPA or the Administrator means the

Administrator of the U.S.

Environmental Protection Agency (EPA)

or his or her designee.

Federal Indian reservation, Indian

reservation or reservation means all

land within the limits of any Indian

reservation under the jurisdiction of the

United States Government,

notwithstanding the issuance of any

patent, and including rights-of-way

running through the reservation.

Final permit means the version of a

part 71 permit issued by the permitting
34230 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

authority that has completed all review

procedures required by §§ 71.7, 71.8,

and 71.11.

Fugitive emissions are those

emissions which could not reasonably

pass through a stack, chimney, vent, or

other functionally-equivalent opening.

General permit means a part 71

permit that meets the requirements of

§ 71.6(d).

Indian Tribe or Tribe means any

Indian Tribe, band, nation, or other

organized group or community,

including any Alaskan 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.

Major source means any stationary

source (or any group of stationary

sources that are located on one or more

contiguous or adjacent properties, and

are under common control of the same

person (or persons under common

control)), belonging to a single major

industrial grouping and that are

described in paragraph (1), (2), or (3) of

this definition. For the purposes of

defining ‘‘major source,’’ a stationary

source or group of stationary sources

shall be considered part of a single

industrial grouping if all of the pollutant

emitting activities at such source or

group of sources on contiguous or

adjacent properties belong to the same

Major Group (i.e., all have the same twodigit code) as described in the Standard

Industrial Classification Manual, 1987.

(1) A major source under section 112

of the Act, which is defined as:

(i) For pollutants other than

radionuclides, any stationary source or

group of stationary sources located

within a contiguous area and under

common control that emits or has the

potential to emit, in the aggregate, 10

tpy or more of any hazardous air

pollutant which has been listed

pursuant to section 112(b) of the Act, 25

tpy or more of any combination of such

hazardous air pollutants, or such lesser

quantity as the Administrator may

establish by rule. Notwithstanding the

preceding sentence, emissions from any

oil or gas exploration or production well

(with its associated equipment) and

emissions from any pipeline compressor

or pump station shall not be aggregated

with emissions from other similar units,

whether or not such units are in a

contiguous area or under common

control, to determine whether such

units or stations are major sources; or

(ii) For radionuclides, ‘‘major source’’

shall have the meaning specified by the

Administrator by rule.

(2) A major stationary source of air

pollutants or any group of stationary

sources as defined in section 302 of the

Act, that directly emits, or has the

potential to emit, 100 tpy or more of any

air pollutant (including any major

source of fugitive emissions of any such

pollutant, as determined by rule by the

Administrator). The fugitive emissions

of a stationary source shall not be

considered in determining whether it is

a major stationary source for the

purposes of section 302(j) of the Act,

unless the source belongs to one of the

following categories of stationary

source:

(i) Coal cleaning plants (with thermal

dryers);

(ii) Kraft pulp mills;

(iii) Portland cement plants;

(iv) Primary zinc smelters;

(v) Iron and steel mills;

(vi) Primary aluminum ore reduction

plants;

(vii) Primary copper smelters;

(viii) Municipal incinerators capable

of charging more than 250 tons of refuse

per day;

(ix) Hydrofluoric, sulfuric, or nitric

acid plants;

(x) Petroleum refineries;

(xi) Lime plants;

(xii) Phosphate rock processing

plants;

(xiii) Coke oven batteries;

(xiv) Sulfur recovery plants;

(xv) Carbon black plants (furnace

process);

(xvi) Primary lead smelters;

(xvii) Fuel conversion plants;

(xviii) Sintering plants;

(xix) Secondary metal production

plants;

(xx) Chemical process plants;

(xxi) Fossil-fuel boilers (or

combination thereof) totaling more than

250 million British thermal units per

hour heat input;

(xxii) Petroleum storage and transfer

units with a total storage capacity

exceeding 300,000 barrels;

(xxiii) Taconite ore processing plants;

(xxiv) Glass fiber processing plants;

(xxv) Charcoal production plants;

(xxvi) Fossil-fuel-fired steam electric

plants of more than 250 million British

thermal units per hour heat input; or

(xxvii) Any other stationary source

category which, as of August 7, 1980, is

being regulated under section 111 or

112 of the Act.

(3) A major stationary source as

defined in part D of title I of the Act,

including:

(i) For ozone nonattainment areas,

sources with the potential to emit 100

tpy or more of volatile organic

compounds or oxides of nitrogen in

areas classified as ‘‘marginal’’ or

‘‘moderate,’’ 50 tpy or more in areas

classified as ‘‘serious’’; 25 tpy or more

in areas classified as ‘‘severe,’’ and 10

tpy or more in areas classified as

‘‘extreme’’; except that the references in

this paragraph (3)(i) to 100, 50, 25, and

10 tpy of nitrogen oxides shall not apply

with respect to any source for which the

Administrator has made a finding,

under section 182(f) (1) or (2) of the Act,

that requirements under section 182(f)

of the Act do not apply;

(ii) For ozone transport regions

established pursuant to section 184 of

the Act, sources with the potential to

emit 50 tpy or more of volatile organic

compounds;

(iii) For carbon monoxide

nonattainment areas:

(A) That are classified as ‘‘serious,’’

and

(B) in which stationary sources

contribute significantly to carbon

monoxide levels as determined under

rules issued by the Administrator,

sources with the potential to emit 50 tpy

or more of carbon monoxide; and

(iv) For particulate matter (PM–10)

nonattainment areas classified as

‘‘serious,’’ sources with the potential to

emit 70 tpy or more of PM–10.

Part 70 permit means any permit or

group of permits covering a part 70

source that has been issued, renewed,

amended or revised pursuant to 40 CFR

part 70.

Part 70 program or State program

means a program approved by the

Administrator under 40 CFR part 70.

Part 70 source means any source

subject to the permitting requirements

of 40 CFR part 70, as provided in

§§ 70.3(a) and 70.3(b).

Part 71 permit, or permit (unless the

context suggests otherwise) means any

permit or group of permits covering a

part 71 source that has been issued,

renewed, amended or revised pursuant

to this part.

Part 71 program means a Federal

operating permits program under this

part.

Part 71 source means any source

subject to the permitting requirements

of this part, as provided in §§ 71.3(a)

and 71.3(b).

Permit modification means a revision

to a part 71 permit that meets the

requirements of § 71.7(e).

Permit program costs means all

reasonable (direct and indirect) costs

required to administer an operating

permits program, as set forth in

§ 71.9(b).

Permit revision means any permit

modification or administrative permit

amendment.

Permitting authority means one of the

following:

(1) The Administrator, in the case of

EPA-implemented programs;
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34231

(2) A delegate agency authorized by

the Administrator to carry out a Federal

permit program under this part; or

(3) The State air pollution control

agency, local agency, other State agency,

Indian Tribe, or other agency authorized

by the Administrator to carry out a

permit program under 40 CFR part 70.

Proposed permit means the version of

a permit that the delegate agency

proposes to issue and forwards to the

Administrator for review in compliance

with § 71.10(d).

Regulated air pollutant means the

following:

(1) Nitrogen oxides or any volatile

organic compounds;

(2) Any pollutant for which a national

ambient air quality standard has been

promulgated;

(3) Any pollutant that is subject to any

standard promulgated under section 111

of the Act;

(4) Any Class I or II substance subject

to a standard promulgated under or

established by title VI of the Act; or

(5) Any pollutant subject to a standard

promulgated under section 112 of the

Act or other requirements established

under section 112 of the Act, including

sections 112 (g), (j), and (r) of the Act,

including the following:

(i) Any pollutant subject to

requirements under section 112(j) of the

Act. If the Administrator fails to

promulgate a standard by the date

established pursuant to section 112(e) of

the Act, any pollutant for which a

subject source would be major shall be

considered to be regulated on the date

18 months after the applicable date

established pursuant to section 112(e) of

the Act; and

(ii) Any pollutant for which the

requirements of section 112(g)(2) of the

Act have been met, but only with

respect to the individual source subject

to section 112(g)(2) requirements.

Regulated pollutant (for fee

calculation), which is used only for

purposes of § 71.9(c), means any

regulated air pollutant except the

following:

(1) Carbon monoxide;

(2) Any pollutant that is a regulated

air pollutant solely because it is a Class

I or II substance subject to a standard

promulgated under or established by

title VI of the Act; or

(3) Any pollutant that is a regulated

air pollutant solely because it is subject

to a standard or regulation under section

112(r) of the Act.

Renewal means the process by which

a permit is reissued at the end of its

term.

Responsible official means one of the

following:

(1) For a corporation: a president,

secretary, treasurer, or vice-president of

the corporation in charge of a principal

business function, or any other person

who performs similar policy or

decision-making functions for the

corporation, or a duly authorized

representative of such person if the

representative is responsible for the

overall operation of one or more

manufacturing, production, or operating

facilities applying for or subject to a

permit and either:

(i) the facilities employ more than 250

persons or have gross annual sales or

expenditures exceeding $25 million (in

second quarter 1980 dollars); or

(ii) the delegation of authority to such

representative is approved in advance

by the permitting authority;

(2) For a partnership or sole

proprietorship: a general partner or the

proprietor, respectively;

(3) For a municipality, State, Federal,

or other public agency: Either a

principal executive officer or ranking

elected official. For the purposes of this

part, a principal executive officer of a

Federal agency includes the chief

executive officer having responsibility

for the overall operations of a principal

geographic unit of the agency (e.g., a

Regional Administrator of EPA); or

(4) For affected sources:

(i) The designated representative

insofar as actions, standards,

requirements, or prohibitions under title

IV of the Act or 40 CFR parts 72 through

78 are concerned; and

(ii) The designated representative for

any other purposes under part 71.

Section 502(b)(10) changes are

changes that contravene an express

permit term. Such changes do not

include changes that would violate

applicable requirements or contravene

federally enforceable permit terms and

conditions that are monitoring

(including test methods), recordkeeping,

reporting, or compliance certification

requirements.

State means any non-Federal

permitting authority, including any

local agency, interstate association, or

statewide program. The term ‘‘State’’

also includes the District of Columbia,

the Commonwealth of Puerto Rico, the

Virgin Islands, Guam, American Samoa,

and the Commonwealth of the Northern

Marianas Islands. Where such meaning

is clear from the context, ‘‘State’’ shall

have its conventional meaning. For

purposes of the acid rain program, the

term ‘‘State’’ shall be limited to

authorities within the 48 contiguous

States and the District of Columbia as

provided in section 402(14) of the Act.

Stationary source means any building,

structure, facility, or installation that

emits or may emit any regulated air

pollutant or any pollutant listed under

section 112(b) of the Act.

§ 71.3 Sources Subject to Permitting

Requirements.

(a) Part 71 sources. The following

sources are subject to the permitting

requirements under this part:

(1) Any major source;

(2) Any source, including an area

source, subject to a standard, limitation,

or other requirement under section 111

of the Act;

(3) Any source, including an area

source, subject to a standard or other

requirement under section 112 of the

Act, except that a source is not required

to obtain a permit solely because it is

subject to regulations or requirements

under section 112(r) of the Act;

(4) Any affected source; and

(5) Any source in a source category

designated by the Administrator

pursuant to this section.

(b) Source category exemptions. (1)

All sources listed in paragraph (a) of

this section that are not major sources,

affected sources, or solid waste

incineration units required to obtain a

permit pursuant to section 129(e) of the

Act are exempted from the obligation to

obtain a part 71 permit until such time

as the Administrator completes a

rulemaking to determine how the

program should be structured for

nonmajor sources and the

appropriateness of any permanent

exemptions in addition to those

provided for in paragraph (b)(4) of this

section.

(2) In the case of nonmajor sources

subject to a standard or other

requirement under either section 111 or

112 of the Act after July 21, 1992

publication, the Administrator will

determine whether to exempt any or all

such applicable sources from the

requirement to obtain a part 70 or part

71 permit at the time that the new

standard is promulgated.

(3) Any source listed in paragraph (a)

of this section exempt from the

requirement to obtain a permit under

this section may opt to apply for a

permit under a part 71 program.

(4) The following source categories

are exempted from the obligation to

obtain a part 71 permit:

(i) All sources and source categories

that would be required to obtain a

permit solely because they are subject to

40 CFR part 60, Subpart AAA—-

Standards of Performance for New

Residential Wood Heaters; and

(ii) All sources and source categories

that would be required to obtain a

permit solely because they are subject to

40 CFR part 61, Subpart M—National

Emission Standard for Hazardous Air
34232 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

Pollutants for Asbestos, § 61.145,

Standard for Demolition and

Renovation.

(c) Emissions units and part 71

sources. (1) For major sources, the

permitting authority shall include in the

permit all applicable requirements for

all relevant emissions units in the major

source.

(2) For any nonmajor source subject to

the part 71 program under paragraphs

(a) or (b) of this section, the permitting

authority shall include in the permit all

applicable requirements applicable to

emissions units that cause the source to

be subject to the part 71 program.

(d) Fugitive emissions. Fugitive

emissions from a part 71 source shall be

included in the permit application and

the part 71 permit in the same manner

as stack emissions, regardless of

whether the source category in question

is included in the list of sources

contained in the definition of major

source.

§ 71.4 Program implementation.

(a) Part 71 programs for States. The

Administrator will administer and

enforce a full or partial operating

permits program for a State (excluding

Tribal areas) in the following situations:

(1) A program for a State meeting the

requirements of part 70 of this chapter

has not been granted full approval

under § 70.4 of this chapter by the

Administrator by July 31, 1996, and the

State’s part 70 program has not been

granted interim approval under § 70.4(d)

of this chapter for a period extending

beyond July 31, 1996. The effective date

of such a part 71 program is July 31,

1996.

(2) An operating permits program for

a State which was granted interim

approval under § 70.4(d) of this chapter

has not been granted full approval by

the Administrator by the expiration of

the interim approval period or July 31,

1996, whichever is later. Such a part 71

program shall be effective upon

expiration of the interim approval or

July 31, 1996 whichever is later.

(3) Any partial part 71 program will

be effective only in those portions of a

State that are not covered by a partial

part 70 program that has been granted

full or interim approval by the

Administrator pursuant to § 70.4(c) of

this chapter.

(b) Part 71 programs for Tribal areas.

The Administrator may administer and

enforce an operating permits program

for a Tribal area, as defined in § 71.2, or

by a rulemaking, when an operating

permits program for the area which

meets the requirements of part 70 of this

chapter has not been granted full or

interim approval by the Administrator

by July 31, 1996.

(1) [Reserved]

(2) The effective date of a part 71

program for a Tribal area shall be

November 15, 1997.

(3) Notwithstanding paragraph (b)(2)

of this section, the Administrator, in

consultation with the governing body of

the Tribal area, may adopt an earlier

effective date.

(4) Notwithstanding paragraph (i)(2)

of this section, within 2 years of the

effective date of the part 71 program for

the Tribal area, the Administrator shall

take final action on permit applications

from part 71 sources that are submitted

within the first full year after the

effective date of the part 71 program.

(c) Part 71 programs imposed due to

inadequate implementation. (1) The

Administrator will administer and

enforce an operating permits program

for a permitting authority if the

Administrator has notified the

permitting authority, in accordance with

§ 70.10(b)(1) of this chapter, of the

Administrator’s determination that a

permitting authority is not adequately

administering or enforcing its approved

operating permits program, or any

portion thereof, and the permitting

authority fails to do either of the

following:

(i) Correct the deficiencies within 18

months after the Administrator issues

the notice; or

(ii) Take significant action to assure

adequate administration and

enforcement of the program within 90

days of the Administrator’s notice.

(2) The effective date of a part 71

program promulgated in accordance

with this paragraph (c) shall be:

(i) Two years after the Administrator’s

notice if the permitting authority has

not corrected the deficiency within 18

months after the date of the

Administrator’s notice; or

(ii) Such earlier time as the

Administrator determines appropriate if

the permitting authority fails, within 90

days of the Administrator’s notice, to

take significant action to assure

adequate administration and

enforcement of the program.

(d) Part 71 programs for OCS sources.

(1) Using the procedures of this part, the

Administrator will issue permits to any

source which is an outer continental

shelf (OCS) source, as defined under

§ 55.2 of this chapter, is subject to the

requirements of part 55 of this chapter

and section 328(a) of the Act, is subject

to the requirement to obtain a permit

under title V of the Act, and is either:

(i) Located beyond 25 miles of States’

seaward boundaries; or

(ii) Located within 25 miles of States’

seaward boundaries and a part 71

program is being administered and

enforced by the Administrator for the

corresponding onshore area, as defined

in § 55.2 of this chapter, for that source.

(2) The requirements of § 71.4(d)(1)(i)

shall apply on July 31, 1996.

(3) The requirements of § 71.4(d)(1)(ii)

apply upon the effective date of a part

71 program for the corresponding

onshore area.

(e) Part 71 program for permits issued

to satisfy an EPA objection. Using the

procedures of this part and 40 CFR 70.8

(c) or (d), or 40 CFR 70.7(g)(4) or (5) (i)

and (ii), as appropriate, the

Administrator will deny, terminate,

revise, revoke or reissue a permit which

has been proposed or issued by a

permitting authority or will issue a part

71 permit when:

(1) A permitting authority with an

approved part 70 operating permits

program fails to respond to a timely

objection to the issuance of a permit

made by the Administrator pursuant to

section 505(b) of the Act and § 70.8(c)

and (d) of this chapter.

(2) The Administrator, under § 70.7(g)

of this chapter, finds that cause exists to

reopen a permit and the permitting

authority fails to either:

(i) Submit to the Administrator a

proposed determination of termination,

modification, or revocation and

reissuance, as appropriate; or

(ii) Resolve any objection EPA makes

to the permit which the permitting

authority proposes to issue in response

to EPA’s finding of cause to reopen, and

to terminate, revise, or revoke and

reissue the permit in accordance with

that objection.

(3) The requirements of this paragraph

(e) shall apply on July 31, 1996.

(f) Use of selected provisions of this

part. The Administrator may utilize any

or all of the provisions of this part to

administer the permitting process for

individual sources or take action on

individual permits, or may adopt

through rulemaking portions of a State

or Tribal program in combination with

provisions of this part to administer a

Federal program for the State or Tribal

area in substitution of or addition to the

Federal program otherwise required by

this part.

(g) Public notice of part 71 programs.

In taking action to administer and

enforce an operating permits program

under this part, the Administrator will

publish a notice in the Federal Register

informing the public of such action and

the effective date of any part 71 program

as set forth in § 71.4 (a), (b), (c), or

(d)(1)(ii). The publication of this part in

the Federal Register on July 1, 1996
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34233

serves as the notice for the part 71

permit programs described in

§ 71.4(d)(1) (i) and (e). The EPA will

also publish a notice in the Federal

Register of any delegation of a portion

of the part 71 program to a State, eligible

Tribe, or local agency pursuant to the

provisions of § 71.10. In addition to

notices published in the Federal

Register under this paragraph (g), the

Administrator will, to the extent

practicable, publish notice in a

newspaper of general circulation within

the area subject to the part 71 program

effectiveness or delegation, and will

send a letter to the Tribal governing

body for an Indian Tribe or the

Governor (or his or her designee) of the

affected area to provide notice of such

effectiveness or delegation.

(h) Effect of limited deficiencies in

State or Tribal programs. The

Administrator may administer and

enforce a part 71 program in a State or

Tribal area even if only limited

deficiencies exist either in the initial

program submittal for a State or eligible

Tribe under part 70 of this chapter or in

an existing State or Tribal program that

has been approved under part 70 of this

chapter.

(i) Transition plan for initial permit

issuance. If a full or partial part 71

program becomes effective in a State or

Tribal area prior to the issuance of part

70 permits to all part 70 sources under

an existing program that has been

approved under part 70 of this chapter,

the Administrator shall take final action

on initial permit applications for all part

71 sources in accordance with the

following transition plan.

(1) All part 71 sources that have not

received part 70 permits shall submit

permit applications under this part

within 1 year after the effective date of

the part 71 program.

(2) Final action shall be taken on at

least one-third of such applications

annually over a period not to exceed 3

years after such effective date.

(3) Any complete permit application

containing an early reduction

demonstration under section 112(i)(5) of

the Act shall be acted on within 12

months of receipt of the complete

application.

(4) Submittal of permit applications

and the permitting of affected sources

shall occur in accordance with the

deadlines in title IV of the Act and 40

CFR parts 72 through 78.

(j) Delegation of part 71 programs.

The Administrator may promulgate a

part 71 program in a State or Tribal area

and delegate part of the responsibility

for administering the part 71 program to

the State or eligible Tribe in accordance

with the provisions of § 71.10; however,

delegation of a part of a program will

not constitute any type of approval of a

State or Tribal operating permits

program under part 70 of this chapter.

Where only selected portions of a part

71 program are administered by the

Administrator and the State or eligible

Tribe is delegated the remaining

portions of the program, the Delegation

Agreement referred to in § 71.10 will

define the respective roles of the State

or eligible Tribe and the Administrator

in administering and enforcing the part

71 operating permits program.

(k) EPA administration and

enforcement of part 70 permits. When

the Administrator administers and

enforces a part 71 program after a

determination and notice under

§ 70.10(b)(1) of this chapter that a State

or Tribe is not adequately administering

and enforcing an operating permits

program approved under part 70 of this

chapter, the Administrator will

administer and enforce permits issued

under the part 70 program until part 71

permits are issued using the procedures

of part 71. Until such time as part 70

permits are replaced by part 71 permits,

the Administrator will revise, reopen,

revise, terminate, or revoke and reissue

part 70 permits using the procedures of

part 71 and will assess and collect fees

in accordance with the provisions of

§ 71.9.

(l) Transition to approved part 70

program. The Administrator will

suspend the issuance of part 71 permits

promptly upon publication of notice of

approval of a State or Tribal operating

permits program that meets the

requirements of part 70 of this chapter.

The Administrator may retain

jurisdiction over the part 71 permits for

which the administrative or judicial

review process is not complete and will

address this issue in the notice of State

program approval. After approval of a

State or Tribal program and the

suspension of issuance of part 71

permits by the Administrator:

(1) The Administrator, or the

permitting authority acting as the

Administrator’s delegated agent, will

continue to administer and enforce part

71 permits until they are replaced by

permits issued under the approved part

70 program. Until such time as part 71

permits are replaced by part 70 permits,

the Administrator will revise, reopen,

revise, terminate, or revoke and reissue

part 71 permits using the procedures of

the part 71 program. However, if the

Administrator has delegated authority to

administer part 71 permits to a delegate

agency, the delegate agency will revise,

reopen, terminate, or revoke and reissue

part 71 permits using the procedures of

the approved part 70 program. If a part

71 permit expires prior to the issuance

of a part 70 permit, all terms and

conditions of the part 71 permit,

including any permit shield that may be

granted pursuant to § 71.6(f), shall

remain in effect until the part 70 permit

is issued or denied, provided that a

timely and complete application for a

permit renewal was submitted to the

permitting authority in accordance with

the requirements of the approved part

70 program.

(2) A State or local agency or Indian

Tribe with an approved part 70

operating permits program may issue

part 70 permits for all sources with part

71 permits in accordance with a permit

issuance schedule approved as part of

the approved part 70 program or may

issue part 70 permits to such sources at

the expiration of the part 71 permits.

(m) Exemption for certain territories.

Upon petition by the Governor of Guam,

American Samoa, the Virgin Islands, or

the Commonwealth of the Northern

Marianas Islands, the Administrator

may exempt any source or class of

sources in such territory from the

requirement to have a part 71 permit

under this chapter. Such an exemption

does not exempt such source or class of

sources from any requirement of section

112 of the Act, including the

requirements of section 112 (g) or (j).

(1) Such exemption may be granted if

the Administrator finds that compliance

with part 71 is not feasible or is

unreasonable due to unique

geographical, meteorological, or

economic factors of such territory, or

such other local factors as the

Administrator deems significant. Any

such petition shall be considered in

accordance with section 307(d) of the

Act, and any exemption granted under

this paragraph (m) shall be considered

final action by the Administrator for the

purposes of section 307(b) of the Act.

(2) The Administrator shall promptly

notify the Committees on Energy and

Commerce and on Interior and Insular

Affairs of the House of Representatives

and the Committees on Environment

and Public Works and on Energy and

Natural Resources of the Senate upon

receipt of any petition under this

paragraph (m) and of the approval or

rejection of such petition and the basis

for such action.

(n) Retention of records. The records

for each draft, proposed, and final

permit application, renewal, or

modification shall be kept by the

Administrator for a period of 5 years.

§ 71.5 Permit applications.

(a) Duty to apply. For each part 71

source, the owner or operator shall

submit a timely and complete permit
34234 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

application in accordance with this

section.

(1) Timely application. (i) A timely

application for a source which does not

have an existing operating permit issued

by a State under the State’s approved

part 70 program and is applying for a

part 71 permit for the first time is one

that is submitted within 12 months after

the source becomes subject to the permit

program or on or before such earlier

date as the permitting authority may

establish. Sources required to submit

applications earlier than 12 months after

the source becomes subject to the permit

program will be notified of the earlier

submittal date at least 6 months in

advance of the date.

(ii) Part 71 sources required to meet

the requirements under section 112(g) of

the Act, or to have a permit under the

preconstruction review program

approved into the applicable

implementation plan under part C or D

of title I of the Act, shall file a complete

application to obtain the part 71 permit

or permit revision within 12 months

after commencing operation or on or

before such earlier date as the

permitting authority may establish.

Sources required to submit applications

earlier than 12 months after the source

becomes subject to the permit program

will be notified of the earlier submittal

date at least 6 months in advance of the

date. Where an existing part 70 or 71

permit would prohibit such

construction or change in operation, the

source must obtain a permit revision

before commencing operation.

(iii) For purposes of permit renewal,

a timely application is one that is

submitted at least 6 months but not

more that 18 months prior to expiration

of the part 70 or 71 permit.

(iv) Applications for initial phase II

acid rain permits shall be submitted to

the permitting authority by January 1,

1996 for sulfur dioxide, and by January

1, 1998 for nitrogen oxides.

(2) Complete application. To be

deemed complete, an application must

provide all information required

pursuant to paragraph (c) of this section,

except that applications for permit

revision need supply such information

only if it is related to the proposed

change. To be found complete, an initial

or renewal application must remit

payment of fees owed under the fee

schedule established pursuant to

§ 71.9(b). Information required under

paragraph (c) of this section must be

sufficient to evaluate the subject source

and its application and to determine all

applicable requirements. A responsible

official must certify the submitted

information consistent with paragraph

(d) of this section. Unless the permitting

authority determines that an application

is not complete within 60 days of

receipt of the application, such

application shall be deemed to be

complete, except as otherwise provided

in § 71.7(a)(4). If, while processing an

application that has been determined or

deemed to be complete, the permitting

authority determines that additional

information is necessary to evaluate or

take final action on that application, it

may request such information in writing

and set a reasonable deadline for a

response. The source’s ability to operate

without a permit, as set forth in

§ 71.7(b), shall be in effect from the date

the application is determined or deemed

to be complete until the final permit is

issued, provided that the applicant

submits any requested additional

information by the deadline specified by

the permitting authority.

(3) Confidential information. An

applicant may assert a business

confidentiality claim for information

requested by the permitting authority

using procedures found at part 2,

subpart B of this chapter.

(b) Duty to supplement or correct

application. Any applicant who fails to

submit any relevant facts or who has

submitted incorrect information in a

permit application shall, upon

becoming aware of such failure or

incorrect submittal, promptly submit

such supplementary facts or corrected

information. In addition, an applicant

shall provide additional information as

necessary to address any requirements

that become applicable to the source

after the date it filed a complete

application but prior to release of a draft

permit.

(c) Standard application form and

required information. The permitting

authority shall provide sources a

standard application form or forms. The

permitting authority may use discretion

in developing application forms that

best meet program needs and

administrative efficiency. The forms and

attachments chosen, however, shall

include the elements specified below.

An application may not omit

information needed to determine the

applicability of, or to impose, any

applicable requirement, or to evaluate

the fee amount required under the

schedule established pursuant to § 71.9.

(1) Identifying information, including

company name and address (or plant

name and address if different from the

company name), owner’s name and

agent, and telephone number and names

of plant site manager/contact.

(2) A description of the source’s

processes and products (by Standard

Industrial Classification Code) including

any associated with each alternate

scenario identified by the source.

(3) The following emissions-related

information:

(i) All emissions of pollutants for

which the source is major, and all

emissions of regulated air pollutants. A

permit application shall describe all

emissions of regulated air pollutants

emitted from any emissions unit, except

where such units are exempted under

this paragraph (c). The permitting

authority shall require additional

information related to the emissions of

air pollutants sufficient to verify which

requirements are applicable to the

source, and other information necessary

to collect any permit fees owed under

the fee schedule established pursuant to

§ 71.9(b).

(ii) Identification and description of

all points of emissions described in

paragraph (c)(3)(i) of this section in

sufficient detail to establish the basis for

fees and applicability of requirements of

the Act.

(iii) Emissions rates in tpy and in

such terms as are necessary to establish

compliance consistent with the

applicable standard reference test

method.

(iv) The following information to the

extent it is needed to determine or

regulate emissions: fuels, fuel use, raw

materials, production rates, and

operating schedules.

(v) Identification and description of

air pollution control equipment and

compliance monitoring devices or

activities.

(vi) Limitations on source operation

affecting emissions or any work practice

standards, where applicable, for all

regulated pollutants at the part 71

source.

(vii) Other information required by

any applicable requirement (including

information related to stack height

limitations developed pursuant to

section 123 of the Act).

(viii) Calculations on which the

information in paragraphs (c)(3) (i)

through (vii) of this section is based.

(4) The following air pollution control

requirements:

(i) Citation and description of all

applicable requirements; and

(ii) Description of or reference to any

applicable test method for determining

compliance with each applicable

requirement.

(5) Other specific information that

may be necessary to implement and

enforce other applicable requirements of

the Act or of this part or to determine

the applicability of such requirements.

(6) An explanation of any proposed

exemptions from otherwise applicable

requirements.
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34235

(7) Additional information as

determined to be necessary by the

permitting authority to define

alternative operating scenarios

identified by the source pursuant to

§ 71.6(a)(9) or to define permit terms

and conditions implementing

§ 71.6(a)(10) or § 71.6(a)(13).

(8) A compliance plan for all part 71

sources that contains all the following:

(i) A description of the compliance

status of the source with respect to all

applicable requirements.

(ii) A description as follows:

(A) For applicable requirements with

which the source is in compliance, a

statement that the source will continue

to comply with such requirements.

(B) For applicable requirements that

will become effective during the permit

term, a statement that the source will

meet such requirements on a timely

basis.

(C) For requirements for which the

source is not in compliance at the time

of permit issuance, a narrative

description of how the source will

achieve compliance with such

requirements.

(iii) A compliance schedule as

follows:

(A) For applicable requirements with

which the source is in compliance, a

statement that the source will continue

to comply with such requirements.

(B) For applicable requirements that

will become effective during the permit

term, a statement that the source will

meet such requirements on a timely

basis. A statement that the source will

meet in a timely manner applicable

requirements that become effective

during the permit term shall satisfy this

provision, unless a more detailed

schedule is expressly required by the

applicable requirement.

(C) A schedule of compliance for

sources that are not in compliance with

all applicable requirements at the time

of permit issuance. Such a schedule

shall include a schedule of remedial

measures, including an enforceable

sequence of actions with milestones,

leading to compliance with any

applicable requirements for which the

source will be in noncompliance at the

time of permit issuance. This

compliance schedule shall resemble and

be at least as stringent as that contained

in any judicial consent decree or

administrative order to which the

source is subject. Any such schedule of

compliance shall be supplemental to,

and shall not sanction noncompliance

with, the applicable requirements on

which it is based.

(iv) A schedule for submission of

certified progress reports no less

frequently than every 6 months for

sources required to have a schedule of

compliance to remedy a violation.

(v) The compliance plan content

requirements specified in this paragraph

shall apply and be included in the acid

rain portion of a compliance plan for an

affected source, except as specifically

superseded by regulations promulgated

under parts 72 through 78 of this

chapter with regard to the schedule and

method(s) the source will use to achieve

compliance with the acid rain emissions

limitations.

(9) Requirements for compliance

certification, including the following:

(i) A certification of compliance with

all applicable requirements by a

responsible official consistent with

paragraph (d) of this section and section

114(a)(3) of the Act;

(ii) A statement of methods used for

determining compliance, including a

description of monitoring,

recordkeeping, and reporting

requirements and test methods;

(iii) A schedule for submission of

compliance certifications during the

permit term, to be submitted no less

frequently than annually, or more

frequently if specified by the underlying

applicable requirement or by the

permitting authority; and

(iv) A statement indicating the

source’s compliance status with any

applicable enhanced monitoring and

compliance certification requirements of

the Act.

(10) The use of nationallystandardized forms for acid rain

portions of permit applications and

compliance plans, as required by

regulations promulgated under parts 72

through 78 of this chapter.

(11) Insignificant activities and

emissions levels. The following types of

insignificant activities and emissions

levels need not be included in permit

applications. However, for insignificant

activities which are exempted because

of size or production rate, a list of such

insignificant activities must be included

in the application. An application may

not omit information needed to

determine the applicability of, or to

impose, any applicable requirement, or

to calculate the fee amount required

under the schedule established pursuant

to § 71.9 of this part.

(i) Insignificant activities:

(A) Mobile sources;

(B) Air-conditioning units used for

human comfort that are not subject to

applicable requirements under title VI

of the Act and do not exhaust air

pollutants into the ambient air from any

manufacturing or other industrial

process;

(C) Ventilating units used for human

comfort that do not exhaust air

pollutants into the ambient air from any

manufacturing or other industrial

process;

(D) Heating units used for human

comfort that do not provide heat for any

manufacturing or other industrial

process;

(E) Noncommercial food preparation;

(F) Consumer use of office equipment

and products;

(G) Janitorial services and consumer

use of janitorial products; and

(H) Internal combustion engines used

for landscaping purposes.

(ii) Insignificant emissions levels.

Emissions meeting the criteria in

paragraph (c)(11)(ii)(A) or (c)(11)(ii)(B)

of this section need not be included in

the application, but must be listed with

sufficient detail to identify the emission

unit and indicate that the exemption

applies. Similar emission units,

including similar capacities or sizes,

may be listed under a single description,

provided the number of emission units

is included in the description. No

additional information is required at

time of application, but the permitting

authority may request additional

information during application

processing.

(A) Emission criteria for regulated air

pollutants, excluding hazardous air

pollutants (HAP). Potential to emit of

regulated air pollutants, excluding HAP,

for any single emissions unit shall not

exceed 2 tpy.

(B) Emission criteria for HAP.

Potential to emit of any HAP from any

single emissions unit shall not exceed

1,000 lb per year or the de minimis level

established under section 112(g) of the

Act, whichever is less.

(d) Any application form, report, or

compliance certification submitted

pursuant to these regulations shall

contain certification by a responsible

official of truth, accuracy, and

completeness. This certification and any

other certification required under this

part shall state that, based on

information and belief formed after

reasonable inquiry, the statements and

information in the document are true,

accurate, and complete.

§ 71.6 Permit content.

(a) Standard permit requirements.

Each permit issued under this part shall

include the following elements:

(1) Emission limitations and

standards, including those operational

requirements and limitations that assure

compliance with all applicable

requirements at the time of permit

issuance.

(i) The permit shall specify and

reference the origin of and authority for

each term or condition, and identify any
34236 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

difference in form as compared to the

applicable requirement upon which the

term or condition is based.

(ii) The permit shall state that, where

an applicable requirement of the Act is

more stringent than an applicable

requirement of 40 CFR parts 72 through

78, both provisions shall be

incorporated into the permit and shall

be enforceable by the Administrator.

(iii) If an applicable implementation

plan allows a determination of an

alternative emission limit at a part 71

source, equivalent to that contained in

the plan, to be made in the permit

issuance, renewal, or significant

modification process, and the

permitting authority elects to use such

process, any permit containing such

equivalency determination shall contain

provisions to ensure that any resulting

emissions limit has been demonstrated

to be quantifiable, accountable,

enforceable, and based on replicable

procedures.

(2) Permit duration. The permitting

authority shall issue permits for a fixed

term of 5 years in the case of affected

sources, and for a term not to exceed 5

years in the case of all other sources.

Notwithstanding this requirement, the

permitting authority shall issue permits

for solid waste incineration units

combusting municipal waste subject to

standards under section 129(e) of the

Act for a period not to exceed 12 years

and shall review such permits at least

every 5 years.

(3) Monitoring and related

recordkeeping and reporting

requirements. (i) Each permit shall

contain the following requirements with

respect to monitoring:

(A) All emissions monitoring and

analysis procedures or test methods

required under the applicable

requirements, including any procedures

and methods promulgated pursuant to

sections 114(a)(3) or 504(b) of the Act;

(B) Where the applicable requirement

does not require periodic testing or

instrumental or noninstrumental

monitoring (which may consist of

recordkeeping designed to serve as

monitoring), periodic monitoring

sufficient to yield reliable data from the

relevant time period that are

representative of the source’s

compliance with the permit, as reported

pursuant to paragraph (a)(3)(iii) of this

section. Such monitoring requirements

shall assure use of terms, test methods,

units, averaging periods, and other

statistical conventions consistent with

the applicable requirement.

Recordkeeping provisions may be

sufficient to meet the requirements of

this paragraph (a)(3)(i)(B); and

(C) As necessary, requirements

concerning the use, maintenance, and,

where appropriate, installation of

monitoring equipment or methods.

(ii) With respect to recordkeeping, the

permit shall incorporate all applicable

recordkeeping requirements and

require, where applicable, the following:

(A) Records of required monitoring

information that include the following:

(1) The date, place as defined in the

permit, and time of sampling or

measurements;

(2) The date(s) analyses were

performed;

(3) The company or entity that

performed the analyses;

(4) The analytical techniques or

methods used;

(5) The results of such analyses; and

(6) The operating conditions as

existing at the time of sampling or

measurement;

(B) Retention of records of all required

monitoring data and support

information for a period of at least 5

years from the date of the monitoring

sample, measurement, report, or

application. Support information

includes all calibration and

maintenance records and all original

strip-chart recordings for continuous

monitoring instrumentation, and copies

of all reports required by the permit.

(iii) With respect to reporting, the

permit shall incorporate all applicable

reporting requirements and require the

following:

(A) Submittal of reports of any

required monitoring at least every 6

months. All instances of deviations from

permit requirements must be clearly

identified in such reports. All required

reports must be certified by a

responsible official consistent with

§ 71.5(d).

(B) Prompt reporting of deviations

from permit requirements, including

those attributable to upset conditions as

defined in the permit, the probable

cause of such deviations, and any

corrective actions or preventive

measures taken. Where the underlying

applicable requirement contains a

definition of prompt or otherwise

specifies a time frame for reporting

deviations, that definition or time frame

shall govern. Where the underlying

applicable requirement fails to address

the time frame for reporting deviations,

reports of deviations shall be submitted

to the permitting authority based on the

following schedule:

(1) For emissions of a hazardous air

pollutant or a toxic air pollutant (as

identified in an applicable regulation)

that continue for more than an hour in

excess of permit requirements, the

report must be made with 24 hours of

the occurrence.

(2) For emissions of any regulated air

pollutant, excluding those listed in

paragraph (a)(3)(iii)(B)(1) of this section,

that continue for more than two hours

in excess of permit requirements, the

report must be made within 48 hours.

(3) For all other deviations from

permit requirements, the report shall be

contained in the report submitted in

accordance with the timeframe given in

paragraph (a)(3)(iii)(A).

(4) A permit may contain a more

stringent reporting requirement than

required by paragraphs (a)(3)(iii)(B)(1),

(2), or (3).

If any of the above conditions are met,

the source must notify the permitting

authority by telephone or facsimile

based on the timetable listed in

paragraphs (a)(3)(iii)(B) (1) through (4)

of this section. A written notice,

certified consistent with § 71.5(d), must

be submitted within 10 working days of

the occurrence. All deviations reported

under paragraph (a)(3)(iii)(A) of this

section must also be identified in the 6

month report required under paragraph

(a)(3)(iii)(A) of this section.

(C) For purposes of paragraph

(a)(3)(iii)(B) of this section, deviation

means any condition determined by

observation, by data from any

monitoring protocol, or by any other

monitoring which is required by the

permit that can be used to determine

compliance, that identifies that an

emission unit subject to a part 71 permit

term or condition has failed to meet an

applicable emission limitation or

standard or that a work practice was not

complied with or completed. For a

condition lasting more than 24 hours

which constitutes a deviation, each 24

hour period is considered a separate

deviation. Included in the meaning of

deviation are any of the following:

(1) A condition where emissions

exceed an emission limitation or

standard;

(2) A condition where process or

control device parameter values

demonstrate that an emission limitation

or standard has not been met;

(3) Any other condition in which

observations or data collected

demonstrates noncompliance with an

emission limitation or standard or any

work practice or operating condition

required by the permit.

(4) A permit condition prohibiting

emissions exceeding any allowances

that the source lawfully holds under 40

CFR parts 72 through 78.

(i) No permit revision shall be

required for increases in emissions that

are authorized by allowances acquired

pursuant to the acid rain program,
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34237

provided that such increases do not

require a permit revision under any

other applicable requirement.

(ii) No limit shall be placed on the

number of allowances held by the

source. The source may not, however,

use allowances as a defense to

noncompliance with any other

applicable requirement.

(iii) Any such allowance shall be

accounted for according to the

procedures established in regulations 40

CFR parts 72 through 78.

(5) A severability clause to ensure the

continued validity of the various permit

requirements in the event of a challenge

to any portions of the permit.

(6) Provisions stating the following:

(i) The permittee must comply with

all conditions of the part 71 permit. Any

permit noncompliance constitutes a

violation of the Act and is grounds for

enforcement action; for permit

termination, revocation and reissuance,

or modification; or for denial of a permit

renewal application.

(ii) Need to halt or reduce activity not

a defense. It shall not be a defense for

a permittee in an enforcement action

that it would have been necessary to

halt or reduce the permitted activity in

order to maintain compliance with the

conditions of this permit.

(iii) The permit may be modified,

revoked, reopened, and reissued, or

terminated for cause. The filing of a

request by the permittee for a permit

modification, revocation and reissuance,

or termination, or of a notification of

planned changes or anticipated

noncompliance does not stay any permit

condition.

(iv) The permit does not convey any

property rights of any sort, or any

exclusive privilege.

(v) The permittee shall furnish to the

permitting authority, within a

reasonable time, any information that

the permitting authority may request in

writing to determine whether cause

exists for modifying, revoking and

reissuing, or terminating the permit or

to determine compliance with the

permit. Upon request, the permittee

shall also furnish to the permitting

authority copies of records required to

be kept by the permit or, in the case of

a program delegated pursuant to § 71.10,

for information claimed to be

confidential, the permittee may furnish

such records directly to the

Administrator along with a claim of

confidentiality.

(7) A provision to ensure that a part

71 source pays fees to the Administrator

consistent with the fee schedule

approved pursuant to § 71.9.

(8) Emissions trading. A provision

stating that no permit revision shall be

required, under any approved economic

incentives, marketable permits,

emissions trading and other similar

programs or processes for changes that

are provided for in the permit.

(9) Terms and conditions for

reasonably anticipated operating

scenarios identified by the source in its

application as approved by the

permitting authority. Such terms and

conditions:

(i) Shall require the source,

contemporaneously with making a

change from one operating scenario to

another, to record in a log at the

permitted facility a record of the

scenario under which it is operating;

(ii) May extend the permit shield

described in paragraph (f) of this section

to all terms and conditions under each

such operating scenario; and

(iii) Must ensure that the terms and

conditions of each such alternative

scenario meet all applicable

requirements and the requirements of

this part.

(10) Terms and conditions, if the

permit applicant requests them, for the

trading of emissions increases and

decreases in the permitted facility, to

the extent that the applicable

requirements provide for trading such

increases and decreases without a caseby-case approval of each emissions

trade. Such terms and conditions:

(i) Shall include all terms required

under paragraphs (a) and (c) of this

section to determine compliance;

(ii) May extend the permit shield

described in paragraph (f) of this section

to all terms and conditions that allow

such increases and decreases in

emissions; and

(iii) Must meet all applicable

requirements and requirements of this

part.

(11) Permit expiration. A provision to

ensure that a part 71 permit expires

upon the earlier occurrence of the

following events:

(i) twelve years elapses from the date

of issuance to a solid waste incineration

unit combusting municipal waste

subject to standards under section

112(e) of the Act; or

(ii) five years elapses from the date of

issuance; or

(iii) the source is issued a part 70

permit.

(12) Off Permit Changes. A provision

allowing changes that are not addressed

or prohibited by the permit, other than

those subject to the requirements of 40

CFR parts 72 through 78 or those that

are modifications under any provision

of title I of the Act to be made without

a permit revision, provided that the

following requirements are met:

(i) Each such change shall meet all

applicable requirements and shall not

violate any existing permit term or

condition;

(ii) Sources must provide

contemporaneous written notice to the

permitting authority (and EPA, in the

case of a program delegated pursuant to

§ 71.10) of each such change, except for

changes that qualify as insignificant

under § 71.5(c)(11). Such written notice

shall describe each such change,

including the date, any change in

emissions, pollutants emitted, and any

applicable requirement that would

apply as a result of the change;

(iii) The change shall not qualify for

the shield under § 71.6(f);

(iv) The permittee shall keep a record

describing changes made at the source

that result in emissions of a regulated

air pollutant subject to an applicable

requirement, but not otherwise

regulated under the permit, and the

emissions resulting from those changes.

(13) Operational flexibility. Provisions

consistent with paragraphs (a)(3)(i)

through (iii) of this section to allow

changes within a permitted facility

without requiring a permit revision, if

the changes are not modifications under

any provision of title I of the Act and

the changes do not exceed the emissions

allowable under the permit (whether

expressed therein as a rate of emissions

or in terms of total emissions): Provided,

that the facility provides the

Administrator (in the case of a program

delegated pursuant to § 71.10) and the

permitting authority with written

notification as required below in

advance of the proposed changes, which

shall be a minimum of 7 days.

(i) The permit shall allow the

permitted source to make section

502(b)(10) changes without requiring a

permit revision, if the changes are not

modifications under any provision of

title I of the Act and the changes do not

exceed the emissions allowable under

the permit (whether expressed therein

as a rate of emissions or in terms of total

emissions).

(A) For each such change, the written

notification required above shall

include a brief description of the change

within the permitted facility, the date

on which the change will occur, any

change in emissions, and any permit

term or condition that is no longer

applicable as a result of the change.

(B) The permit shield described in

§ 71.6(f) shall not apply to any change

made pursuant to this paragraph

(a)(13)(i).

(ii) The permit may provide for the

permitted source to trade increases and

decreases in emissions in the permitted

facility, where the applicable
34238 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

implementation plan provides for such

emissions trades without requiring a

permit revision and based on the 7-day

notice prescribed in this paragraph

(a)(13)(ii) of this section. This provision

is available in those cases where the

permit does not already provide for

such emissions trading.

(A) Under this paragraph (a)(13)(ii),

the written notification required above

shall include such information as may

be required by the provision in the

applicable implementation plan

authorizing the emissions trade,

including at a minimum, when the

proposed change will occur, a

description of each such change, any

change in emissions, the permit

requirements with which the source

will comply using the emissions trading

provisions of the applicable

implementation plan, and the pollutants

emitted subject to the emissions trade.

The notice shall also refer to the

provisions with which the source will

comply in the applicable

implementation plan and that provide

for the emissions trade.

(B) The permit shield described in

§ 71.6(f) shall not extend to any change

made under this paragraph (a)(13)(ii).

Compliance with the permit

requirements that the source will meet

using the emissions trade shall be

determined according to requirements

of the applicable implementation plan

authorizing the emissions trade.

(iii) The permit shall require the

permitting authority, if a permit

applicant requests it, to issue permits

that contain terms and conditions,

including all terms required under

§ 71.6 (a) and (c) to determine

compliance, allowing for the trading of

emissions increases and decreases in the

permitted facility solely for the purpose

of complying with a federallyenforceable emissions cap that is

established in the permit independent

of otherwise applicable requirements.

The permit applicant shall include in its

application proposed replicable

procedures and permit terms that ensure

the emissions trades are quantifiable

and enforceable. The permitting

authority shall not be required to

include in the emissions trading

provisions any emissions units for

which emissions are not quantifiable or

for which there are no replicable

procedures to enforce the emissions

trades. The permit shall also require

compliance with all applicable

requirements.

(A) Under this paragraph (a)(13)(iii),

the written notification required above

shall state when the change will occur

and shall describe the changes in

emissions that will result and how these

increases and decreases in emissions

will comply with the terms and

conditions of the permit.

(B) The permit shield described in

§ 71.6(f) may extend to terms and

conditions that allow such increases

and decreases in emissions.

(b) Federally-enforceable

requirements. All terms and conditions

in a part 71 permit, including any

provisions designed to limit a source’s

potential to emit, are enforceable by the

Administrator and citizens under the

Act.

(c) Compliance requirements. All part

71 permits shall contain the following

elements with respect to compliance:

(1) Consistent with paragraph (a)(3) of

this section, compliance certification,

testing, monitoring, reporting, and

recordkeeping requirements sufficient to

assure compliance with the terms and

conditions of the permit. Any document

(including reports) required by a part 71

permit shall contain a certification by a

responsible official that meets the

requirements of § 71.5(d).

(2) Inspection and entry requirements

that require that, upon presentation of

credentials and other documents as may

be required by law, the permittee shall

allow the permitting authority or an

authorized representative to perform the

following:

(i) Enter upon the permittee’s

premises where a part 71 source is

located or emissions-related activity is

conducted, or where records must be

kept under the conditions of the permit;

(ii) Have access to and copy, at

reasonable times, any records that must

be kept under the conditions of the

permit;

(iii) Inspect at reasonable times any

facilities, equipment (including

monitoring and air pollution control

equipment), practices, or operations

regulated or required under the permit;

and

(iv) As authorized by the Act, sample

or monitor at reasonable times

substances or parameters for the

purpose of assuring compliance with

the permit or applicable requirements.

(3) A schedule of compliance

consistent with § 71.5(c)(8).

(4) Progress reports consistent with an

applicable schedule of compliance and

§ 71.5(c)(8) to be submitted at least

semiannually, or at a more frequent

period if specified in the applicable

requirement or by the permitting

authority. Such progress reports shall

contain the following:

(i) Dates for achieving the activities,

milestones, or compliance required in

the schedule of compliance, and dates

when such activities, milestones or

compliance were achieved; and

(ii) An explanation of why any dates

in the schedule of compliance were not

or will not be met, and any preventive

or corrective measures adopted.

(5) Requirements for compliance

certification with terms and conditions

contained in the permit, including

emission limitations, standards, or work

practices. Permits shall include each of

the following:

(i) The frequency (not less than

annually or such more frequent periods

as specified in the applicable

requirement or by the permitting

authority) of submissions of compliance

certifications;

(ii) In accordance with § 71.6(a)(3), a

means for monitoring the compliance of

the source with its emissions

limitations, standards, and work

practices;

(iii) A requirement that the

compliance certification include the

following:

(A) The identification of each term or

condition of the permit that is the basis

of the certification;

(B) The compliance status;

(C) Whether compliance was

continuous or intermittent;

(D) The method(s) used for

determining the compliance status of

the source, currently and over the

reporting period consistent with

paragraph (a)(3) of this section; and

(E) Such other facts as the permitting

authority may require to determine the

compliance status of the source;

(iv) A requirement that all compliance

certifications be submitted to the

Administrator as well as to the

permitting authority; and

(v) Such additional requirements as

may be specified pursuant to sections

114(a)(3) and 504(b) of the Act.

(6) Such other provisions as the

permitting authority may require.

(d) General permits. (1) The

permitting authority may, after notice

and opportunity for public participation

provided under § 71.11, issue a general

permit covering numerous similar

sources. Any general permit shall

comply with all requirements applicable

to other part 71 permits and shall

identify criteria by which sources may

qualify for the general permit. To

sources that qualify, the permitting

authority shall grant the conditions and

terms of the general permit.

Notwithstanding the shield provisions

of paragraph (f) of this section, the

source shall be subject to enforcement

action for operation without a part 71

permit if the source is later determined

not to qualify for the conditions and

terms of the general permit. General

permits shall not be authorized for

affected sources under the acid rain
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34239

program unless otherwise provided in

40 CFR parts 72 through 78.

(2) Part 71 sources that would qualify

for a general permit must apply to the

permitting authority for coverage under

the terms of the general permit or must

apply for a part 71 permit consistent

with § 71.5. The permitting authority

may, in the general permit, provide for

applications which deviate from the

requirements of § 71.5, provided that

such applications meet the requirements

of title V of the Act, and include all

information necessary to determine

qualification for, and to assure

compliance with, the general permit.

Without repeating the public

participation procedures required under

§ 71.11, the permitting authority may

grant a source’s request for

authorization to operate under a general

permit, but such a grant shall not be a

final permit action for purposes of

judicial review.

(e) Temporary sources. The permitting

authority may issue a single permit

authorizing emissions from similar

operations by the same source owner or

operator at multiple temporary

locations. The operation must be

temporary and involve at least one

change of location during the term of

the permit. No affected source shall be

permitted as a temporary source.

Permits for temporary sources shall

include the following:

(1) Conditions that will assure

compliance with all applicable

requirements at all authorized locations;

(2) Requirements that the owner or

operator notify the permitting authority

at least 10 days in advance of each

change in location; and

(3) Conditions that assure compliance

with all other provisions of this section.

(f) Permit shield. (1) Except as

provided in this part, the permitting

authority may expressly include in a

part 71 permit a provision stating that

compliance with the conditions of the

permit shall be deemed compliance

with any applicable requirements as of

the date of permit issuance, provided

that:

(i) Such applicable requirements are

included and are specifically identified

in the permit; or

(ii) The permitting authority, in acting

on the permit application or revision,

determines in writing that other

requirements specifically identified are

not applicable to the source, and the

permit includes the determination or a

concise summary thereof.

(2) A part 71 permit that does not

expressly state that a permit shield

exists shall be presumed not to provide

such a shield.

(3) Nothing in this paragraph or in

any part 71 permit shall alter or affect

the following:

(i) The provisions of section 303 of

the Act (emergency orders), including

the authority of the Administrator under

that section;

(ii) The liability of an owner or

operator of a source for any violation of

applicable requirements prior to or at

the time of permit issuance;

(iii) The applicable requirements of

the acid rain program, consistent with

section 408(a) of the Act; or

(iv) The ability of EPA to obtain

information from a source pursuant to

section 114 of the Act.

(g) Emergency provision. (1)

Definition. An ‘‘emergency’’ means any

situation arising from sudden and

reasonably unforeseeable events beyond

the control of the source, including acts

of God, which situation requires

immediate corrective action to restore

normal operation, and that causes the

source to exceed a technology-based

emission limitation under the permit,

due to unavoidable increases in

emissions attributable to the emergency.

An emergency shall not include

noncompliance to the extent caused by

improperly designed equipment, lack of

preventative maintenance, careless or

improper operation, or operator error.

(2) Effect of an emergency. An

emergency constitutes an affirmative

defense to an action brought for

noncompliance with such technologybased emission limitations if the

conditions of paragraph (g)(3) of this

section are met.

(3) The affirmative defense of

emergency shall be demonstrated

through properly signed,

contemporaneous operating logs, or

other relevant evidence that:

(i) An emergency occurred and that

the permittee can identify the cause(s)

of the emergency;

(ii) The permitted facility was at the

time being properly operated;

(iii) During the period of the

emergency the permittee took all

reasonable steps to minimize levels of

emissions that exceeded the emission

standards, or other requirements in the

permit; and

(iv) The permittee submitted notice of

the emergency to the permitting

authority within 2 working days of the

time when emission limitations were

exceeded due to the emergency. This

notice fulfills the requirement of

paragraph (a)(3)(iii)(B) of this section.

This notice must contain a description

of the emergency, any steps taken to

mitigate emissions, and corrective

actions taken.

(4) In any enforcement proceeding,

the permittee seeking to establish the

occurrence of an emergency has the

burden of proof.

(5) This provision is in addition to

any emergency or upset provision

contained in any applicable

requirement.

§ 71.7 Permit issuance, renewal,

reopenings, and revisions.

(a) Action on application. (1) A

permit, permit modification, or renewal

may be issued only if all of the

following conditions have been met:

(i) The permitting authority has

received a complete application for a

permit, permit modification, or permit

renewal, except that a complete

application need not be received before

issuance of a general permit under

§ 71.6(d);

(ii) Except for modifications

qualifying for minor permit

modification procedures under

paragraphs (e) (1) and (2) of this section,

the permitting authority has complied

with the requirements for public

participation under this section or

§ 71.11, as applicable;

(iii) The permitting authority has

complied with the requirements for

notifying and responding to affected

States under § 71.8(a);

(iv) The conditions of the permit

provide for compliance with all

applicable requirements and the

requirements of this part; and

(v) In the case of a program delegated

pursuant to § 71.10, the Administrator

has received a copy of the proposed

permit and any notices required under

§ 71.10(d) and has not objected to

issuance of the permit under § 71.10(g)

within the time period specified therein.

(2) Except as provided under the

initial transition plan provided for

under § 71.4(i) or under 40 CFR part 72

or title V of the Act for the permitting

of affected sources under the acid rain

program, the permitting authority shall

take final action on each permit

application (including a request for

permit modification or renewal) within

18 months after receiving a complete

application.

(3) The permitting authority shall

ensure that priority is given to taking

action on applications for construction

or modification under title I, parts C and

D of the Act.

(4) The permitting authority shall

promptly provide notice to the

applicant of whether the application is

complete. Unless the permitting

authority requests additional

information or otherwise notifies the

applicant of incompleteness within 60

days of receipt of an application, the
34240 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

application shall be deemed complete.

For modifications processed through

minor permit modification procedures,

such as those in paragraphs (e) (1) and

(2) of this section, the permitting

authority need not make a completeness

determination.

(5) The permitting authority shall

provide a statement that sets forth the

legal and factual basis for the draft

permit conditions (including references

to the applicable statutory or regulatory

provisions). The permitting authority

shall send this statement to any person

who requests it, and to EPA, in the case

of a program delegated pursuant to

§ 71.10.

(6) The submittal of a complete

application shall not affect the

requirement that any source have a

preconstruction permit under title I of

the Act.

(b) Requirement for a permit. Except

as provided in the following sentence,

§ 71.6(a)(13), and paragraphs (e)(1)(v)

and e(2)(v) of this section, no part 71

source may operate after the time that it

is required to submit a timely and

complete application under this part,

except in compliance with a permit

issued under this part. If a part 71

source submits a timely and complete

application for permit issuance

(including for renewal), the source’s

failure to have a part 71 permit is not

a violation of this part until the

permitting authority takes final action

on the permit application, except as

noted in this section. This protection

shall cease to apply if, subsequent to the

completeness determination made

pursuant to paragraph (a)(4) of this

section, and as required by § 71.5(c), the

applicant fails to submit by the deadline

specified in writing by the permitting

authority any additional information

identified as being needed to process

the application.

(c) Permit renewal and expiration. (1)

(i) Permits being renewed are subject to

the same procedural requirements,

including those for public participation,

affected State review, and EPA review

(in the case of a program delegated

pursuant to § 71.10) that apply to initial

permit issuance.

(ii) Permit expiration terminates the

source’s right to operate unless a timely

and complete renewal application has

been submitted consistent with

paragraph (b) of this section and

§ 71.5(a)(1)(iii).

(2) In the case of a program delegated

pursuant to § 71.10, if the permitting

authority fails to act in a timely way on

permit renewal, EPA may invoke its

authority under section 505(e) of the Act

to terminate or revoke and reissue the

permit.

(3) If a timely and complete

application for a permit renewal is

submitted, consistent with § 71.5(a)(2),

but the permitting authority has failed

to issue or deny the renewal permit

before the end of the term of the

previous part 70 or 71 permit, then the

permit shall not expire until the renewal

permit has been issued or denied and

any permit shield that may be granted

pursuant to § 71.6(f) may extend beyond

the original permit term until renewal;

or all the terms and conditions of the

permit including any permit shield that

may be granted pursuant to § 71.6(f)

shall remain in effect until the renewal

permit has been issued or denied.

(d) Administrative permit

amendments. (1) An ‘‘administrative

permit amendment’’ is a permit revision

that:

(i) Corrects typographical errors;

(ii) Identifies a change in the name,

address, or phone number of any person

identified in the permit, or provides a

similar minor administrative change at

the source;

(iii) Requires more frequent

monitoring or reporting by the

permittee;

(iv) Allows for a change in ownership

or operational control of a source where

the permitting authority determines that

no other change in the permit is

necessary, provided that a written

agreement containing a specific date for

transfer of permit responsibility,

coverage, and liability between the

current and new permittee has been

submitted to the permitting authority;

(v) Incorporates into the part 71

permit the requirements from

preconstruction review permits

authorized under an EPA-approved

program, provided that such a program

meets procedural requirements

substantially equivalent to the

requirements of §§ 71.7 and 71.8 (and

§ 71.10 in the case of a delegated

program) that would be applicable to

the change if it were subject to review

as a permit modification, and

compliance requirements substantially

equivalent to those contained in § 71.6;

or

(vi) Incorporates any other type of

change which the Administrator has

determined to be similar to those in

paragraphs (d)(1)(i) through (iv) of this

section.

(2) Administrative permit

amendments for purposes of the acid

rain portion of the permit shall be

governed by 40 CFR part 72.

(3) Administrative permit amendment

procedures. An administrative permit

amendment may be made by the

permitting authority consistent with the

following:

(i) The permitting authority shall take

no more than 60 days from receipt of a

request for an administrative permit

amendment to take final action on such

request, and may incorporate such

changes without providing notice to the

public or affected States provided that it

designates any such permit revisions as

having been made pursuant to this

paragraph.

(ii) The permitting authority shall

submit a copy of the revised permit to

the Administrator in the case of a

program delegated pursuant to § 71.10.

(iii) The source may implement the

changes addressed in the request for an

administrative amendment immediately

upon submittal of the request.

(4) The permitting authority may,

upon taking final action granting a

request for an administrative permit

amendment, allow coverage by the

permit shield in § 71.6(f) for

administrative permit amendments

made pursuant to paragraph (d)(1)(v) of

this section which meet the relevant

requirements of §§ 71.6, 71.7, and 71.8

for significant permit modifications.

(e) Permit modifications. A permit

modification is any revision to a part 71

permit that cannot be accomplished

under the provisions for administrative

permit amendments under paragraph (d)

of this section. A permit modification

for purposes of the acid rain portion of

the permit shall be governed by 40 CFR

part 72.

(1) Minor permit modification

procedures.

(i) Criteria.

(A) Minor permit modification

procedures may be used only for those

permit modifications that:

(1) Do not violate any applicable

requirement;

(2) Do not involve significant changes

to existing monitoring, reporting, or

recordkeeping requirements in the

permit;

(3) Do not require or change a caseby-case determination of an emission

limitation or other standard, or a sourcespecific determination for temporary

sources of ambient impacts, or a

visibility or increment analysis;

(4) Do not seek to establish or change

a permit term or condition for which

there is no corresponding underlying

applicable requirement and that the

source has assumed to avoid an

applicable requirement to which the

source would otherwise be subject.

Such terms and conditions include:

(i) A federally enforceable emissions

cap assumed to avoid classification as a

modification under any provision of

title I; and

(ii) An alternative emissions limit

approved pursuant to regulations
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34241

promulgated under section 112(i)(5) of

the Act;

(5) Are not modifications under any

provision of title I of the Act; and

(6) Are not required to be processed

as a significant modification.

(B) Notwithstanding paragraphs

(e)(1)(i)(A) and (e)(2)(i) of this section,

minor permit modification procedures

may be used for permit modifications

involving the use of economic

incentives, marketable permits,

emissions trading, and other similar

approaches, to the extent that such

minor permit modification procedures

are explicitly provided for in an

applicable implementation plan or in

applicable requirements promulgated by

EPA.

(ii) Application. An application

requesting the use of minor permit

modification procedures shall meet the

requirements of § 71.5(c) and shall

include the following:

(A) A description of the change, the

emissions resulting from the change,

and any new applicable requirements

that will apply if the change occurs;

(B) The source’s suggested draft

permit;

(C) Certification by a responsible

official, consistent with § 71.5(d), that

the proposed modification meets the

criteria for use of minor permit

modification procedures and a request

that such procedures be used; and

(D) Completed forms for the

permitting authority to use to notify

affected States (and the Administrator in

the case of a program delegated

pursuant to § 71.10) as required under

§§ 71.8 and 71.10(d).

(iii) EPA and affected State

notification. Within 5 working days of

receipt of a complete permit

modification application, the permitting

authority shall meet its obligation under

§ 71.8(a) to notify affected States (and its

obligation under § 71.10(d) to notify the

Administrator in the case of a program

delegated pursuant to § 71.10) of the

requested permit modification. In the

case of a program delegated pursuant to

§ 71.10, the permitting authority

promptly shall send any notice required

under § 71.8(b) to the Administrator.

(iv) Timetable for issuance. In the

case of a program delegated pursuant to

§ 71.10, the permitting authority may

not issue a final permit modification

until after EPA’s 45-day review period

or until EPA has notified the permitting

authority that EPA will not object to

issuance of the permit modification,

whichever is first, although the

permitting authority can approve the

permit modification prior to that time.

Within 90 days of the permitting

authority’s receipt of an application

under minor permit modification

procedures (or 15 days after the end of

the Administrator’s 45-day review

period under § 71.10(g) in the case of a

program delegated pursuant to § 71.10,

whichever is later), the permitting

authority shall:

(A) Issue the permit modification as

proposed;

(B) Deny the permit modification

application;

(C) Determine that the requested

modification does not meet the minor

permit modification criteria and should

be reviewed under the significant

modification procedures; or

(D) Revise the draft permit

modification (and, in the case of a

program delegated pursuant to § 71.10,

transmit to the Administrator the new

proposed permit modification as

required by § 71.10(d)).

(v) Source’s ability to make change.

The source may make the change

proposed in its minor permit

modification application immediately

after it files such application. After the

source makes the change allowed by the

preceding sentence, and until the

permitting authority takes any of the

actions specified in paragraphs (e)(1)(iv)

(A) through (C) of this section, the

source must comply with both the

applicable requirements governing the

change and the proposed permit terms

and conditions. During this time period,

the source need not comply with the

existing permit terms and conditions it

seeks to modify. However, if the source

fails to comply with its proposed permit

terms and conditions during this time

period, the existing permit terms and

conditions it seeks to modify may be

enforced against it.

(vi) Permit shield. The permit shield

under § 71.6(f) may not extend to minor

permit modifications.

(2) Group processing of minor permit

modifications. Consistent with this

paragraph, the permitting authority may

modify the procedure outlined in

paragraph (e)(1) of this section to

process groups of a source’s

applications for certain modifications

eligible for minor permit modification

processing.

(i) Criteria. Group processing of

modifications may be used only for

those permit modifications:

(A) That meet the criteria for minor

permit modification procedures under

paragraph (e)(1)(i)(A) of this section;

and

(B) That collectively are below the

threshold level of 10 percent of the

emissions allowed by the permit for the

emissions unit for which the change is

requested, 20 percent of the applicable

definition of major source in § 71.2, or

5 tpy, whichever is least.

(ii) Application. An application

requesting the use of group processing

procedures shall meet the requirements

of § 71.5(c) and shall include the

following:

(A) A description of the change, the

emissions resulting from the change,

and any new applicable requirements

that will apply if the change occurs.

(B) The source’s suggested draft

permit.

(C) Certification by a responsible

official, consistent with § 71.5(d), that

the proposed modification meets the

criteria for use of group processing

procedures and a request that such

procedures be used.

(D) A list of the source’s other

pending applications awaiting group

processing, and a determination of

whether the requested modification,

aggregated with these other

applications, equals or exceeds the

threshold set under paragraph

(e)(2)(i)(B) of this section.

(E) Certification, consistent with

§ 71.5(d), that, in the case of a program

delegated pursuant to § 71.10, the

source has notified EPA of the proposed

modification. Such notification need

only contain a brief description of the

requested modification.

(F) Completed forms for the

permitting authority to use to notify

affected States as required under § 71.8

(and the Administrator as required

under § 71.10(d) in the case of a

program delegated pursuant to § 71.10).

(iii) EPA and affected State

notification. On a quarterly basis or

within 5 business days of receipt of an

application demonstrating that the

aggregate of a source’s pending

applications equals or exceeds the

threshold level set under paragraph

(e)(2)(i)(B) of this section, whichever is

earlier, the permitting authority

promptly shall meet its obligation under

§ 71.8(a) to notify affected States (and its

obligation under § 71.10(d) to notify

EPA in the case of a program delegated

pursuant to § 71.10) of the requested

permit modification. The permitting

authority shall send any notice required

under § 71.8(b) to the Administrator in

the case of a program delegated

pursuant to § 71.10.

(iv) Timetable for issuance. The

provisions of paragraph (e)(1)(iv) of this

section shall apply to modifications

eligible for group processing, except that

the permitting authority shall take one

of the actions specified in paragraphs

(e)(1)(iv) (A) through (D) of this section

within 180 days of receipt of the

application (or, in the case of a program

delegated pursuant to § 71.10, 15 days
34242 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

after the end of the Administrator’s 45-

day review period under § 71.10(g),

whichever is later).

(v) Source’s ability to make change.

The provisions of paragraph (e)(1)(v) of

this section shall apply to modifications

eligible for group processing.

(vi) Permit shield. The provisions of

paragraph (e)(1)(vi) of this section shall

also apply to modifications eligible for

group processing.

(3) Significant modification

procedures.

(i) Criteria. Significant modification

procedures shall be used for

applications requesting permit

modifications that do not qualify as

minor permit modifications or as

administrative amendments. Every

significant change in existing

monitoring permit terms or conditions

and every relaxation of reporting or

recordkeeping permit terms or

conditions shall be considered

significant. Nothing herein shall be

construed to preclude the permittee

from making changes consistent with

this part that would render existing

permit compliance terms and conditions

irrelevant.

(ii) Significant permit modifications

shall meet all requirements of this part,

including those for applications, public

participation, review by affected States,

and review by EPA (in the case of a

program delegated pursuant to § 71.10),

as they apply to permit issuance and

permit renewal. The permitting

authority shall design and implement

this review process to complete review

on the majority of significant permit

modifications within 9 months after

receipt of a complete application.

(f) Reopening for cause. (1) Each

issued permit shall include provisions

specifying the conditions under which

the permit will be reopened prior to the

expiration of the permit. A permit shall

be reopened and revised under any of

the following circumstances:

(i) Additional applicable requirements

under the Act become applicable to a

major part 71 source with a remaining

permit term of 3 or more years. Such a

reopening shall be completed not later

than 18 months after promulgation of

the applicable requirement. No such

reopening is required if the effective

date of the requirement is later than the

date on which the permit is due to

expire, unless the original permit or any

of its terms and conditions have been

extended pursuant to paragraph (c)(3) of

this section.

(ii) Additional requirements

(including excess emissions

requirements) become applicable to an

affected source under the acid rain

program. Upon approval by the

Administrator, excess emissions offset

plans shall be deemed to be

incorporated into the permit.

(iii) The permitting authority (or EPA,

in the case of a program delegated

pursuant to § 71.10) 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.

(iv) The permitting authority (or EPA,

in the case of a program delegated

pursuant to § 71.10) determines that the

permit must be revised or revoked to

assure compliance with the applicable

requirements.

(2) Proceedings to reopen and issue a

permit shall follow the same procedures

as apply to initial permit issuance and

shall affect only those parts of the

permit for which cause to reopen exists,

and shall be made as expeditiously as

practicable.

(3) Reopenings under paragraph (f)(1)

of this section shall not be initiated

before a notice of such intent is

provided to the part 71 source by the

permitting authority at least 30 days in

advance of the date that the permit is to

be reopened, except that the permitting

authority may provide a shorter time

period in the case of an emergency.

(g) Reopenings for cause by EPA for

delegated programs. (1) In the case of a

program delegated pursuant to § 71.10,

if the Administrator finds that cause

exists to terminate, modify, or revoke

and reissue a permit pursuant to

paragraph (f) of this section, the

Administrator will notify the permitting

authority and the permittee of such

finding in writing.

(2) The permitting authority shall,

within 90 days after receipt of such

notification, forward to EPA a proposed

determination of termination,

modification, or revocation and

reissuance, as appropriate. The

Administrator may extend this 90-day

period for an additional 90 days if he or

she finds that a new or revised permit

application is necessary or that the

permitting authority must require the

permittee to submit additional

information.

(3) The Administrator will review the

proposed determination from the

permitting authority within 90 days of

receipt.

(4) The permitting authority shall

have 90 days from receipt of an EPA

objection to resolve any objection that

EPA makes and to terminate, modify, or

revoke and reissue the permit in

accordance with the Administrator’s

objection.

(5) If the permitting authority fails to

submit a proposed determination

pursuant to paragraph (g)(2) of this

section or fails to resolve any objection

pursuant to paragraph (g)(4) of this

section, the Administrator will

terminate, modify, or revoke and reissue

the permit after taking the following

actions:

(i) Providing at least 30 days’ notice

to the permittee in writing of the

reasons for any such action. This notice

may be given during the procedures in

paragraphs (g) (1) through (4) of this

section.

(ii) Providing the permittee an

opportunity for comment on the

Administrator’s proposed action and an

opportunity for a hearing.

§ 71.8 Affected State review.

(a) Notice of draft permits. When a

part 71 operating permits program

becomes effective in a State or Tribal

area, the permitting authority shall

provide notice of each draft permit to

any affected State, as defined in § 71.2,

on or before the time that the permitting

authority provides this notice to the

public pursuant to § 71.7 or § 71.11(d)

except to the extent § 71.7(e)(1) or (2)

requires the timing of the notice to be

different.

(b) Notice of refusal to accept

recommendations. Prior to issuance of

the final permit, the permitting

authority shall notify any affected State

in writing of any refusal by the

permitting authority to accept all

recommendations for the proposed

permit that the affected State submitted

during the public or affected State

review period. The notice shall include

the permitting authority’s reasons for

not accepting any such

recommendation. The permitting

authority is not required to accept

recommendations that are not based on

applicable requirements or the

requirements of this part. In the case of

a program delegated pursuant to § 71.10,

the permitting authority shall include

such notice as part of the submittal of

the proposed permit to the

Administrator (or as soon as possible

after the submittal for minor permit

modification procedures allowed under

§ 71.7(e)(1) or (2)).

(c) Waiver of notice requirements. The

Administrator may waive the

requirements of paragraph (a) of this

section for any category of sources

(including any class, type, or size within

such category) other than major sources

by regulation for a category of sources

nationwide.

(d) Notice provided to Indian Tribes.

The permitting authority shall provide

notice of each draft permit to any

federally recognized Indian Tribe whose

air quality may be affected by the

permitting action and whose reservation
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34243

or Tribal area is contiguous to the

jurisdiction in which the part 71 permit

is proposed or is within 50 miles of the

permitted source.

§ 71.9 Permit fees

(a) Fee requirement. The owners or

operators of part 71 sources shall pay

annual fees, or the equivalent over some

other period, that are sufficient to cover

the permit program costs, in accordance

with the procedures described in this

section.

(b) Permit program costs. These costs

include, but are not limited to, the costs

of the following activities as they relate

to a part 71 program:

(1) Reviewing and acting on any

application for a permit, permit

revision, or permit renewal, including

the development of an applicable

requirement as part of the processing of

a permit, or permit revision or renewal;

(2) Processing permit reopenings;

(3) General administrative costs of the

permit program, including transition

planning, interagency coordination,

contract management, training,

informational services and outreach

activities, assessing and collecting fees,

the tracking of permit applications,

compliance certifications, and related

data entry;

(4) Implementing and enforcing the

terms of any part 71 permit (not

including any court costs or other costs

associated with an enforcement action),

including adequate resources to

determine which sources are subject to

the program;

(5) Emissions and ambient

monitoring, modeling, analyses,

demonstrations, preparation of

inventories, and tracking emissions,

provided these activities are needed in

order to issue and implement part 71

permits; and

(6) Providing direct and indirect

support to small business stationary

sources in determining applicable

requirements and in receiving permits

under this part (to the extent that these

services are not provided by a State

Small Business Stationary Source

Technical and Environmental

Compliance Assistance Program).

(c) Establishment of fee schedule. (1)

For part 71 programs that are

administered by EPA, each part 71

source shall pay an annual fee in the

amount of $32 per ton (as adjusted

pursuant to the criteria set forth in

paragraph (n)(1) of this section) times

the total tons of the actual emissions of

each regulated pollutant (for fee

calculation) emitted from the source,

including fugitive emissions.

(2) For part 71 programs that are fully

delegated pursuant to § 71.10:

(i) Where the EPA has not suspended

its part 71 fee collection pursuant to

paragraph (c)(2)(ii) of this section, the

annual fee for each part 71 source shall

be $24 per ton (as adjusted pursuant to

the criteria set forth in paragraph (n)(1)

of this section) times the total tons of

the actual emissions of each regulated

pollutant (for fee calculation) emitted

from the source, including fugitive

emissions.

(ii) Where the delegate State collects

fees from part 71 sources under State

law which are sufficient to fund the

delegated part 71 program, the EPA may

suspend its collection of part 71 fees.

The specific terms and conditions

regarding the suspension of fee

collection will be addressed in the

applicable delegation agreement

pursuant to § 71.10.

(3) For part 71 programs that are

administered by EPA with contractor

assistance, the per ton fee shall vary

depending on the extent of contractor

involvement and the cost to EPA of

contractor assistance. The EPA shall

establish a per ton fee that is based on

the contractor costs for the specific part

71 program that is being administered,

using the following formula:

Cost per ton=(E×32)+[(1¥E)×$C]

Where E represents EPA’s proportion of

total effort (expressed as a percentage of

total effort) needed to administer the

part 71 program, 1–E represents the

contractor’s effort, and C represents the

contractor assistance cost on a per ton

basis. C shall be computed by using the

following formula:

C=[B+T+N] divided by 12,300,000

Where B represents the base cost

(contractor costs), where T represents

travel costs, and where N represents

nonpersonnel data management and

tracking costs.

(4) For programs that are delegated in

part, the fee shall be computed using the

following formula:

Cost per

ton=(E×32)+(D×24)+[(1¥E¥D)×$C]

Where E and D represent, respectively,

the EPA and delegate agency

proportions of total effort (expressed as

a percentage of total effort) needed to

administer the part 71 program,

1¥E¥D represents the contractor’s

effort, and C represents the contractor

assistance cost on a per ton basis. C

shall be computed using the formula for

contractor assistance cost found in

paragraph (c)(3) of this section and shall

be zero if contractor assistance is not

utilized.

(5) The following emissions shall be

excluded from the calculation of fees

under paragraph (c)(1) through (c)(4) of

this section:

(i) The amount of a part 71 source’s

actual emissions of each regulated

pollutant (for fee calculation) that the

source emits in excess of four thousand

(4,000) tpy;

(ii) A part 71 source’s actual

emissions of any regulated pollutant (for

fee calculation) already included in the

fee calculation; and

(iii) The insignificant quantities of

actual emissions not required to be

listed or calculated in a permit

application pursuant to § 71.5(c)(11).

(6) ‘‘Actual emissions’’ means the

actual rate of emissions in tpy of any

regulated pollutant (for fee calculation)

emitted from a part 71 source over the

preceding calendar year. Actual

emissions shall be calculated using each

emissions unit’s actual operating hours,

production rates, in-place control

equipment, and types of materials

processed, stored, or combusted during

the preceding calendar year.

(7) Notwithstanding the provisions of

paragraph (c) (1) through (4) of this

section, if the Administrator determines

that the fee structures provided in

paragraphs (c)(1) through (4) of this

section do not reflect the costs of

administering a part 71 program, then

the Administrator shall by rule set a fee

which adequately reflects permit

program costs for that program.

(d) Prohibition on fees with respect to

emissions from affected units.

Notwithstanding any other provision of

this section, during the years 1995

through 1999 inclusive, 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.

(e) Submission of initial fee

calculation work sheets and fees. (1)

Each part 71 source shall complete and

submit an initial fee calculation work

sheet as provided in paragraphs (e)(2),

(f), and (g) of this section and shall

complete and submit fee calculation

work sheets thereafter as provided in

paragraph (h) of this section.

Calculations of actual or estimated

emissions and calculation of the fees

owed by a source shall be computed by

the source on fee calculation work

sheets provided by EPA. Fee payment of

the full amount must accompany each

initial fee calculation work sheet.

(2) The fee calculation work sheet

shall require the source to submit a

report of its actual emissions for the

preceding calendar year and to compute

fees owed based on those emissions. For

sources that have been issued part 70 or

part 71 permits, actual emissions shall

be computed using compliance methods

required by the most recent permit. If

actual emissions cannot be determined
34244 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

using the compliance methods in the

permit, the actual emissions should be

determined using federally recognized

procedures. If a source commenced

operation during the preceding calendar

year, the source shall estimate its actual

emissions for the current calendar year.

In such a case, fees for the source shall

be based on the total emissions

estimated.

(3) The initial fee calculation

worksheet shall be certified by a

responsible official consistent with

§ 71.5(d).

(f) Deadlines for submission. (1) When

EPA withdraws approval of a part 70

program and implements a part 71

program, part 71 sources shall submit

initial fee calculation work sheets and

fees in accordance with the following

schedule:

(i) Sources having SIC codes between

0100 and 2499 inclusive shall complete

and submit fee calculation work sheets

and fees within 6 months of the

effective date of the part 71 program;

(ii) Sources having SIC codes between

2500 and 2999 inclusive shall complete

and submit fee calculation work sheets

and fees within 7 months of the

effective date of the part 71 program;

(iii) Sources having SIC codes

between 3000 and 3999 inclusive shall

complete and submit fee calculation

work sheets and fees within 8 months

of the effective date of the part 71

program;

(iv) Sources having SIC codes higher

than 3999 shall complete and submit fee

calculation work sheets and fees within

9 months of the effective date of the part

71 program.

(2) Sources that are required under

either paragraph (f)(1) or (g) of this

section to submit fee calculation work

sheets and fees between January 1 and

March 31 may estimate their emissions

for the preceding calendar year in lieu

of submitting actual emissions data. If

the source’s initial fee calculation work

sheet was based on estimated emissions

for the source’s preceding calendar year,

then the source shall reconcile the fees

owed when it submits its annual

emissions report, as provided in

paragraph (h)(3) of this section.

(3) When EPA implements a part 71

program that does not replace an

approved part 70 program, part 71

sources shall submit initial fee

calculation work sheets and initial fees

when submitting their permit

applications in accordance with the

requirements of § 71.5(a)(1).

(4) Notwithstanding the above,

sources that become subject to the part

71 program after the program’s effective

date shall submit an initial fee

calculation work sheet and initial fees

when submitting their permit

applications in accordance with the

requirements of § 71.5(a)(1).

(g) Fees for sources that are issued

part 71 permits following an EPA

objection pursuant to § 71.4(e). Fees for

such sources shall be determined as

provided in paragraph (c)(1) of this

section. However, initial fee calculation

work sheets for such sources and full

payment of the initial fee shall be due

three months after the date on which the

source’s part 71 permit is issued.

(h) Annual emissions reports—(1)

Deadlines for submission. Each part 71

source shall submit an annual report of

its actual emissions for the preceding

calendar year, a fee calculation work

sheet (based on the report), and full

payment of the annual fee each year on

the anniversary date of its initial fee

calculation work sheet, except that

sources that were required to submit

initial fee calculation work sheets

between January 1 and March 31

inclusive shall submit subsequent

annual emissions reports and fee

calculation work sheets by April 1.

(2) Annual emissions reports and fee

calculation worksheets shall be certified

by a responsible official consistent with

§ 71.5(d).

(3) For sources that have been issued

part 70 or part 71 permits, actual

emissions shall be computed using

methods required by the most current

permit for determining compliance.

(4) If the source’s initial fee

calculation work sheet was based on

estimated emissions for the source’s

current or preceding calendar year, then

the source shall reconcile the fees owed

when it submits its annual emissions

report. The source shall compare the

estimated emissions from the initial

work sheet and the actual emissions

from the report and shall enter such

information on the fee calculation work

sheet that accompanies the annual

report. The source shall recompute the

initial fee accordingly and shall remit

any underpayment with the report and

work sheet. The EPA shall credit any

overpayment to the source’s account.

(i) Recordkeeping requirements. Part

71 sources shall retain, in accordance

with the provisions of § 71.6(a)(3)(ii), all

work sheets and other materials used to

determine fee payments. Records shall

be retained for 5 years following the

year in which the emissions data is

submitted.

(j) Fee assessment errors. (1) If EPA

determines than a source has completed

the fee calculation work sheet

incorrectly, the permitting authority

shall bill the applicant for the corrected

fee or credit overpayments to the

source’s account.

(2) Each source notified by the

permitting authority of additional

amounts due shall remit full payment

within 30 days of receipt of an invoice

from the permitting authority.

(3) An owner or operator of a part 71

source who thinks that the assessed fee

is in error shall provide a written

explanation of the alleged error to the

permitting authority along with the

assessed fee. The permitting authority

shall, within 90 days of receipt of the

correspondence, review the data to

determine whether the assessed fee was

in error. If an error was made, the

overpayment shall be credited to the

account of the part 71 source.

(k) Remittance procedure. (1) Each

remittance under this section shall be in

United States currency and shall be paid

by money order, bank draft, certified

check, corporate check, or electronic

funds transfer payable to the order of

the U.S. Environmental Protection

Agency.

(2) Each remittance shall be sent to

the Environmental Protection Agency to

the address designated on the fee

calculation work sheet or the invoice.

(l) Penalty and interest assessment.

(1) The permitting authority shall assess

interest on payments which are received

later than the date due. The interest rate

shall be the sum of the Federal shortterm rate determined by the Secretary of

the Treasury in accordance with section

6621(a)(2) of the Internal Revenue Code

of 1986, plus 3 percentage points.

(2) The permitting authority shall

assess a penalty charge of 50 percent of

the fee amount if the fee is not paid

within 30 days of the payment due date.

(3) If a source underpays the fee

owed, except as provided in paragraph

(l)(4) of this section, the permitting

authority shall assess a penalty charge

of 50 percent on the amount by which

the fee was underpaid. Interest shall

also be assessed, computed under

paragraph (l)(1) of this section, on the

amount by which the fee was

underpaid.

(4) If a source bases its initial fee

calculation on estimated emissions from

the source’s current or preceding

calendar year, as provided under

paragraph (h)(4) of this section, and

underpays its fee based on an

underestimation of these emissions, the

permitting authority shall assess a

penalty charge of 50 percent on certain

of these underpayments, according to

the following provisions:

(i) The penalty charge shall be

assessed whenever a source’s

underpayment exceeds the

underpayment penalty cutoff

established in paragraph (l)(4)(iii) of this

section. The penalty amount shall be 50
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34245

percent of the portion of the

underpayment which is in excess of the

underpayment penalty cutoff.

(ii) Where a source is subject to a

penalty for underpayment pursuant to

paragraph (l)(4)(i) of this section,

interest as computed under paragraph

(l)(1) of this section shall be assessed on

that portion of the underpayment which

is in excess of the underpayment

penalty cutoff established in paragraph

(l)(4)(iii) of this section.

(iii) The underpayment penalty cutoff

for a source shall be the sum of the

following:

(A) 50 percent of the portion of the

initial fee amount which was calculated

from estimated emissions of HAP listed

pursuant to 112(b) of the Act, and

(B) 20 percent of the portion of initial

fee amount which was calculated from

estimated emissions of the remainder of

the regulated air pollutants (for fee

calculation).

(m) Failure to remit fees. The

permitting authority shall not issue a

final permit or permit revision until all

fees, interest and penalties assessed

against a source under this section are

paid. The initial application of a source

shall not be found complete unless the

source has paid all fees owed.

(n) Adjustments of fee schedules.

(1) The fee schedules provided in

paragraphs (c) (1) through (4) of this

section shall remain in effect until

December 31, 1996. Thereafter, the fee

schedules shall be changed annually by

the percentage, if any, of any annual

increase in the Consumer Price Index.

(2) Part 71 permit program costs and

fees will be reviewed by the

Administrator at least every 2 years, and

changes will be made to the fee

schedule as necessary to reflect permit

program costs.

(3) When changes to a fee schedule

are made based on periodic reviews by

the Administrator, the changes will be

published in the Federal Register.

(o) Use of revenue. All fees, penalties,

and interest collected under this part

shall be deposited in a special fund in

the U.S. Treasury, which thereafter shall

be available for appropriation, to remain

available until expended, subject to

appropriation, to carry out the activities

required by this part.

§ 71.10 Delegation of part 71 program.

(a) Delegation of part 71 program. The

Administrator may delegate, in whole or

in part, with or without signature

authority, the authority to administer a

part 71 operating permits program to a

State, eligible Tribe, local, or other nonState agency in accordance with the

provisions of this section. In order to be

delegated authority to administer a part

71 program, the delegate agency must

submit a legal opinion from the

Attorney General from the State, or the

attorney for the State, local, interstate,

or eligible Tribal agency that has

independent legal counsel, stating that

the laws of the State, locality, interstate

compact or Indian Tribe provide

adequate authority to carry out all

aspects of the delegated program. A

Delegation of Authority Agreement

(Agreement) shall set forth the terms

and conditions of the delegation, shall

specify the provisions that the delegate

agency shall be authorized to

implement, and shall be entered into by

the Administrator and the delegate

agency. The Agreement shall become

effective upon the date that both the

Administrator and the delegate agency

have signed the Agreement. Once

delegation becomes effective, the

delegate agency will be responsible, to

the extent specified in the Agreement,

for administering the part 71 program

for the area subject to the Agreement.

(b) Publication of Notice of Delegation

of Authority Agreement. The

Administrator shall publish a notice in

the Federal Register informing the

public of any delegation of a portion of

the part 71 program to a State, eligible

Tribe, or local agency.

(c) Revision or revocation of

Delegation of Authority Agreement. An

Agreement may be modified, amended,

or revoked, in part or in whole, by the

Administrator after consultation with

the delegate agency.

(d) Transmission of information to the

Administrator.

(1) When a part 71 program has been

delegated in accordance with the

provisions of this section, the delegate

agency shall provide to the

Administrator a copy of each permit

application (including any application

for permit modification), each proposed

permit, and each final part 71 permit.

The applicant may be required by the

delegate agency to provide a copy of the

permit application (including the

compliance plan) directly to the

Administrator. Upon agreement with

the Administrator, the delegate agency

may submit to the Administrator a

permit application summary form and

any relevant portion of the permit

application and compliance plan, in

place of the complete permit application

and compliance plan. To the extent

practicable, the preceding information

shall be provided in computer-readable

format compatible with EPA’s national

database management system.

(2) The Administrator may waive the

requirements of paragraph (d)(1) of this

section for any category of sources

(including any class, type, or size within

such category) other than major sources

by regulation for a category of sources

nationwide.

(e) Retention of records. The records

for each draft, proposed, and final

permit, and application for permit

renewal or modification shall be kept

for a period of 5 years by the delegate

agency. The delegate agency shall also

submit to the Administrator such

information as the Administrator may

reasonably require to ascertain whether

the delegate agency is implementing,

administering, and enforcing the

delegated part 71 program in

compliance with the requirements of the

Act and of this part.

(f) Prohibition of default issuance. (1)

For the purposes of Federal law and title

V of the Act, when a part 71 program

has been delegated in accordance with

the provisions of this section, no part 71

permit (including a permit renewal or

modification) will be issued until

affected States have had an opportunity

to review the draft permit as required

pursuant to § 71.8(a) and EPA has had

an opportunity to review the proposed

permit.

(2) To receive delegation of signature

authority, the legal opinion submitted

by the delegate agency pursuant to

paragraph (a) of this section shall certify

that no applicable provision of State,

local or Tribal law requires that a part

71 permit or renewal be issued after a

certain time if the delegate agency has

failed to take action on the application

(or includes any other similar provision

providing for default issuance of a

permit), unless EPA has waived such

review for EPA and affected States.

(g) EPA objection. (1) The

Administrator will object to the

issuance of any proposed permit

determined by the Administrator not to

be in compliance with applicable

requirements or requirements under this

part. No permit for which an application

must be transmitted to the

Administrator under paragraph (d)(1) of

this section shall be issued if the

Administrator objects to its issuance in

writing within 45 days of receipt of the

proposed permit and all necessary

supporting information. When a part 71

program has been delegated in

accordance with the provisions of this

section, failure of the delegate agency to

do any of the following shall constitute

grounds for an objection by the

Administrator:

(i) Comply with paragraph (d) of this

section;

(ii) Submit any information necessary

to review adequately the proposed

permit;
34246 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

(iii) Process the permit under the

procedures required by §§ 71.7 and

71.11; or

(iv) Comply with the requirements of

§ 71.8(a).

(2) Any EPA objection under

paragraph (g)(1) of this section shall

include a statement of the

Administrator’s reason(s) for objection

and a description of the terms and

conditions that the permit must include

to respond to the objection. The

Administrator will provide the permit

applicant a copy of the objection.

(3) If the delegate agency fails, within

90 days after the date of an objection

under paragraph (g)(1) of this section, to

revise and submit to the Administrator

the proposed permit in response to the

objection, the Administrator shall issue

or deny the permit in accordance with

the requirements of this part.

(h) Public petitions. In the case of a

delegated program, any interested

person may petition the Administrator

to reopen a permit for cause as provided

in § 71.11(n).

(i) Appeal of permits. When a part 71

program has been delegated with

signature authority in accordance with

the provisions of this section, any

person or affected State that submitted

recommendations or comments on the

draft permit, or that participated in the

public hearing process may petition the

Environmental Appeals Board in

accordance with § 71.11(l)(1).

(j) Nondelegable conditions. (1) The

Administrator’s authority to object to

the issuance of a part 71 permit cannot

be delegated to an agency not within

EPA.

(2) The Administrator’s authority to

act upon petitions submitted pursuant

to paragraph (h) of this section cannot

be delegated to an agency not within

EPA.

§ 71.11 Administrative record, public

participation, and administrative review.

The provisions of this section shall

apply to all permit proceedings.

Notwithstanding the preceding

sentence, paragraphs (a) through (h) and

paragraph (j) of this section shall not

apply to permit revisions qualifying as

minor permit modifications or

administrative amendments, except that

public notice of the granting of appeals

of such actions under paragraph (l)(3) of

this section shall be provided pursuant

to paragraph (d)(1)(i)(E) of this section,

and except that affected States shall be

provided notice of minor permit

modifications under § 71.8 as pursuant

to paragraph (d)(3)(i)(B) of this section.

(a) Draft permits. (1) The permitting

authority shall promptly provide notice

to the applicant of whether the

application is complete pursuant to

§ 71.7(a)(3).

(2) Once an application for an initial

permit, permit revision, or permit

renewal is complete, the permitting

authority shall decide whether to

prepare a draft permit or to deny the

application.

(3) If the permitting authority initially

decides to deny the permit application,

it shall issue a notice of intent to deny.

A notice of intent to deny the permit

application is a type of draft permit and

follows the same procedures as any

draft permit prepared under this

section. If the permitting authority’s

final decision is that the initial decision

to deny the permit application was

incorrect, it shall withdraw the notice of

intent to deny and proceed to prepare a

draft permit under paragraph (a)(4) of

this section.

(4) If the permitting authority decides

to prepare a draft permit, it shall

prepare a draft permit that contains the

permit conditions required under § 71.6.

(5) All draft permits prepared under

this section shall be publicly noticed

and made available for public comment.

(b) Statement of basis. The permitting

authority shall prepare a statement of

basis for every draft permit subject to

this section. The statement of basis shall

briefly describe the derivation of the

conditions of the draft permit and the

reasons for them or, in the case of

notices of intent to deny or terminate,

reasons supporting the initial decision.

The statement of basis shall be sent to

the applicant and, on request, to any

other person.

(c) Administrative record for draft

permits.

(1) The provisions of a draft permit

shall be based on the administrative

record defined in this section.

(2) For preparing a draft permit, the

administrative record shall consist of:

(i) The application and any

supporting data furnished by the

applicant;

(ii) The draft permit or notice of intent

to deny the application or to terminate

the permit;

(iii) The statement of basis;

(iv) All documents cited in the

statement of basis; and

(v) Other documents contained in the

supporting file for the draft permit.

(3) Material readily available at the

permitting authority or published

material that is generally available, and

that is included in the administrative

record under paragraphs (b) and (c) of

this section need not be physically

included with the rest of the record as

long as it is specifically referred to in

the statement of basis.

(d) Public notice of permit actions and

public comment period.

(1) Scope.

(i) The permitting authority shall give

public notice that the following actions

have occurred:

(A) A permit application has been

initially denied under paragraph (a) of

this section;

(B) A draft permit has been prepared

under paragraph (a) of this section;

(C) A hearing has been scheduled

under paragraph (f) of this section; and

(D) A public comment period has

been reopened under paragraph (h) of

this section;

(E) An appeal has been granted under

paragraph (l)(3) of this section.

(ii) No public notice is required when

a request for permit revision, revocation

and reissuance, or termination has been

denied under paragraph (a)(2) of this

section. Written notice of that denial

shall be given to the requester and to the

permittee.

(iii) Public notices may describe more

than one permit or permit action.

(2) Timing. (i) Public notice of the

preparation of a draft permit, (including

a notice of intent to deny a permit

application), shall allow at least 30 days

for public comment.

(ii) Public notice of a public hearing

shall be given at least 30 days before the

hearing. Public notice of the hearing

may be given at the same time as public

notice of the draft permit and the two

notices may be combined.

(iii) The permitting authority shall

provide such notice and opportunity for

participation to affected States on or

before the time that the permitting

authority provides this notice to the

public.

(3) Methods. Public notice of activities

described in paragraph (d)(1)(i) of this

section shall be given by the following

methods:

(i) By mailing a copy of a notice to the

following persons (any person otherwise

entitled to receive notice under

paragraph (d) of this section may waive

his or her rights to receive notice for any

permit):

(A) The applicant;

(B) Affected States;

(C) Air pollution control agencies of

affected States, Tribal and local air

pollution control agencies which have

jurisdiction over the area in which the

source is located, the chief executives of

the city and county where the source is

located, any comprehensive regional

land use planning agency and any State

or Federal Land Manager whose lands

may be affected by emissions from the

source;

(D) The local emergency planning

committee having jurisdiction over the
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34247

area where the source is located, and

State agencies having authority under

State law with respect to the operation

of such source;

(E) Persons on a mailing list

developed by:

(1) Including those who request in

writing to be on the list;

(2) Soliciting persons for ‘‘area lists’’

from participants in past permit

proceedings in that area; and

(3) Notifying the public of the

opportunity to be put on the mailing list

through periodic publication in the

public press and, where deemed

appropriate by the permitting authority,

in such publications as regional and

State funded newsletters, environmental

bulletins, or State law journals. The

permitting authority may update the

mailing list from time to time by

requesting written indication of

continued interest from those listed.

The permitting authority may delete

from the list the name of any person

who fails to respond to such a request.

(ii) By publication of a notice in a

daily or weekly newspaper of general

circulation within the area affected by

the source.

(iii) By any other method reasonably

calculated to give actual notice of the

action in question to the persons

potentially affected by it, including

press releases or any other forum or

medium to elicit public participation.

(4) Contents—(i) All public notices.

All public notices issued under this

subpart shall contain the following

minimum information:

(A) The name and address of the

permitting authority processing the

permit;

(B) The name and address of the

permittee or permit applicant and, if

different, of the facility regulated by the

permit, except in the case of draft

general permits;

(C) The activity or activities involved

in the permit action;

(D) The emissions change involved in

any permit revision;

(E) The name, address, and telephone

number of a person whom interested

persons may contact for instructions on

how to obtain additional information,

such as a copy of the draft permit, the

statement of basis, the application,

relevant supporting materials, and other

materials available to the permitting

authority that are relevant to the

permitting decision.

(F) A brief description of the comment

procedures required by paragraph (e) of

this section, a statement of procedures

to request a hearing (unless a hearing

has already been scheduled) and other

procedures by which the public may

participate in the final permit decision;

(G) The location of the administrative

record, the times at which the record

will be open for public inspection, and

a statement that all data submitted by

the applicant are available as part of the

administrative record; and

(H) Any additional information

considered necessary or proper.

(ii) Public notices for hearings. Public

notice of a hearing may be combined

with other notices required under

paragraph (d)(1) of this section. Any

public notice of a hearing under

paragraph (f) of this section shall

contain the following information:

(A) The information described in

paragraph (d)(4)(i) of this section;

(B) Reference to the date of previous

public notices relating to the permit;

(C) The date, time, and place of the

hearing; and

(D) A brief description of the nature

and purpose of the hearing, including

the applicable rules and the comment

procedures.

(5) All persons identified in

paragraphs (d)(3)(i) (A), (B), (C), (D), and

(E) of this section shall be mailed a copy

of the public hearing notice described in

paragraph (d)(4)(ii) of this section.

(e) Public comments and requests for

public hearings. During the public

comment period provided under

paragraph (a) of this section, any

interested person may submit written

comments on the draft permit and may

request a public hearing, if no hearing

has already been scheduled. A request

for a public hearing shall be in writing

and shall state the nature of the issues

proposed to be raised at the hearing. All

comments shall be considered in

making the final decision and shall be

answered as provided in paragraph (j) of

this section. The permitting authority

will keep a record of the commenters

and of the issues raised during the

public participation process, and such

records shall be available to the public.

(f) Public hearings. (1) The permitting

authority shall hold a hearing whenever

it finds, on the basis of requests, a

significant degree of public interest in a

draft permit.

(2) The permitting authority may also

hold a public hearing at its discretion,

whenever, for instance, such a hearing

might clarify one or more issues

involved in the permit decision.

(3) Public notice of the hearing shall

be given as specified in paragraph (d) of

this section.

(4) Whenever a public hearing is held,

the permitting authority shall designate

a Presiding Officer for the hearing who

shall be responsible for its scheduling

and orderly conduct.

(5) Any person may submit oral or

written statements and data concerning

the draft permit. Reasonable limits may

be set upon the time allowed for oral

statements, and the submission of

statements in writing may be required.

The public comment period under

paragraph (d) of this section shall be

automatically extended to the close of

any public hearing under this section.

The hearing officer may also extend the

comment period by so stating at the

hearing.

(6) A tape recording or written

transcript of the hearing shall be made

available to the public.

(g) Obligation to raise issues and

provide information during the public

comment period. All persons, including

applicants, who believe any condition

of a draft permit is inappropriate or that

the permitting authority’s initial

decision to deny an application,

terminate a permit, or prepare a draft

permit is inappropriate, must raise all

reasonably ascertainable issues and

submit all reasonably ascertainable

arguments supporting their position by

the close of the public comment period

(including any public hearing). Any

supporting materials that are submitted

shall be included in full and may not be

incorporated by reference, unless they

are already part of the administrative

record in the same proceeding, or

consist of State or Federal statutes and

regulations, EPA documents of general

applicability, or other generally

available reference materials. In the case

of a program delegated pursuant to

§ 71.10, if requested by the

Administrator, the permitting authority

shall make supporting materials not

already included in the administrative

record available to EPA. The permitting

authority may direct commenters to

provide such materials directly to EPA.

A comment period longer than 30 days

may be necessary to give commenters a

reasonable opportunity to comply with

the requirements of this section.

Additional time shall be granted to the

extent that a commenter who requests

additional time demonstrates the need

for such time.

(h) Reopening of the public comment

period. (1) The permitting authority may

order the public comment period

reopened if the procedures of paragraph

(h) of this section could expedite the

decision making process. When the

public comment period is reopened

under paragraph (h) of this section, all

persons, including applicants, who

believe any condition of a draft permit

is inappropriate or that the permitting

authority’s initial decision to deny an

application, terminate a permit, or

prepare a draft permit is inappropriate,

must submit all reasonably available

factual grounds supporting their
34248 Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations

position, including all supporting

material, by a date not less than 30 days

after public notice under paragraph

(h)(2) of this section, set by the

permitting authority. Thereafter, any

person may file a written response to

the material filed by any other person,

by a date, not less than 20 days after the

date set for filing of the material, set by

the permitting authority.

(2) Public notice of any comment

period under this paragraph (h) shall

identify the issues to which the

requirements of paragraphs (h)(1)

through (4) of this section shall apply.

(3) On its own motion or on the

request of any person, the permitting

authority may direct that the

requirements of paragraph (h)(1) of this

section shall apply during the initial

comment period where it reasonably

appears that issuance of the permit will

be contested and that applying the

requirements of paragraph (h)(1) of this

section will substantially expedite the

decision making process. The notice of

the draft permit shall state whenever

this has been done.

(4) A comment period of longer than

30 days may be necessary in

complicated proceedings to give

commenters a reasonable opportunity to

comply with the requirements of this

section. Commenters may request longer

comment periods and they may be

granted to the extent the permitting

authority finds it necessary.

(5) If any data, information, or

arguments submitted during the public

comment period appear to raise

substantial new questions concerning a

permit, the permitting authority may

take one or more of the following

actions:

(i) Prepare a new draft permit,

appropriately modified;

(ii) Prepare a revised statement of

basis, and reopen the comment period;

or

(iii) Reopen or extend the comment

period to give interested persons an

opportunity to comment on the

information or arguments submitted.

(6) Comments filed during the

reopened comment period shall be

limited to the substantial new questions

that caused the reopening. The public

notice shall define the scope of the

reopening.

(7) Public notice of any of the above

actions shall be issued under paragraph

(d) of this section.

(i) Issuance and effective date of

permit. (1) After the close of the public

comment period on a draft permit, the

permitting authority shall issue a final

permit decision. The permitting

authority shall notify the applicant and

each person who has submitted written

comments or requested notice of the

final permit decision. This notice shall

include reference to the procedures for

appealing a decision on a permit. For

the purposes of this section, a final

permit decision means a final decision

to issue, deny, revise, revoke and

reissue, renew, or terminate a permit.

(2) A final permit decision shall

become effective 30 days after the

service of notice of the decision, unless:

(i) A later effective date is specified in

the decision;

(ii) Review is requested under

paragraph (l) of this section (in which

case the specific terms and conditions of

the permit which are the subject of the

request for review shall be stayed); or

(iii) No comments requested a change

in the draft permit, in which case the

permit shall become effective

immediately upon issuance.

(j) Response to comments. (1) At the

time that any final permit decision is

issued, the permitting authority shall

issue a response to comments. This

response shall:

(i) Specify which provisions, if any, of

the draft permit have been changed in

the final permit decision, and the

reasons for the change; and

(ii) Briefly describe and respond to all

significant comments on the draft

permit raised during the public

comment period, or during any hearing.

(2) Any documents cited in the

response to comments shall be included

in the administrative record for the final

permit decision as defined in paragraph

(k) of this section. If new points are

raised or new material supplied during

the public comment period, the

permitting authority may document its

response to those matters by adding new

materials to the administrative record.

(3) The response to comments shall be

available to the public.

(4) The permitting authority will

notify in writing any affected State of

any refusal to accept recommendations

for the permit that the State submitted

during the public or affected State

review period.

(k) Administrative record for final

permits. (1) The permitting authority

shall base final permit decisions on the

administrative record defined in

paragraph (k)(2) of this section.

(2) The administrative record for any

final permit shall consist of:

(i) All comments received during any

public comment period, including any

extension or reopening;

(ii) The tape or transcript of any

hearing(s) held;

(iii) Any written material submitted at

such a hearing;

(iv) The response to comments and

any new materials placed in the record;

(v) Other documents contained in the

supporting file for the permit;

(vi) The final permit;

(vii) The application and any

supporting data furnished by the

applicant;

(viii) The draft permit or notice of

intent to deny the application or to

terminate the permit;

(ix) The statement of basis for the

draft permit;

(x) All documents cited in the

statement of basis;

(xi) Other documents contained in the

supporting file for the draft permit.

(3) The additional documents

required under paragraph (k)(2) of this

section should be added to the record as

soon as possible after their receipt or

publication by the permitting authority.

The record shall be complete on the

date the final permit is issued.

(4) Material readily available at the

permitting authority, or published

materials which are generally available

and which are included in the

administrative record under the

standards of paragraph (j) of this section

need not be physically included in the

same file as the rest of the record as long

as it is specifically referred to in the

statement of basis or in the response to

comments.

(l) Appeal of permits. (1) Within 30

days after a final permit decision has

been issued, any person who filed

comments on the draft permit or

participated in the public hearing may

petition the Environmental Appeals

Board to review any condition of the

permit decision. Any person who failed

to file comments or failed to participate

in the public hearing on the draft permit

may petition for administrative review

only to the extent of the changes from

the draft to the final permit decision or

other new grounds that were not

reasonably foreseeable during the public

comment period on the draft permit.

The 30-day period within which a

person may request review under this

section begins with the service of notice

of the permitting authority’s action

unless a later date is specified in that

notice, except that the 30-day period

within which a person may request

review of a minor permit modification

or administrative amendment begins

upon the effective date of such action to

revise the permit. The petition shall

include a statement of the reasons

supporting that review, including a

demonstration that any issues raised

were raised during the public comment

period (including any public hearing) to

the extent required by these regulations

unless the petitioner demonstrates that

it was impracticable to raise such

objections within such period or unless
Federal Register / Vol. 61, No. 127 / Monday, July 1, 1996 / Rules and Regulations 34249

the grounds for such objection arose

after such period, and, when

appropriate, a showing that the

condition in question is based on:

(i) A finding of fact or conclusion of

law which is clearly erroneous; or

(ii) An exercise of discretion or an

important policy consideration which

the Environmental Appeals Board

should, in its discretion, review.

(2) The Board may also decide on its

initiative to review any condition of any

permit issued under this part. The

Board must act under paragraph (l) of

this section within 30 days of the

service date of notice of the permitting

authority’s action.

(3) Within a reasonable time following

the filing of the petition for review, the

Board shall issue an order either

granting or denying the petition for

review. To the extent review is denied,

the conditions of the final permit

decision become final agency action.

Public notice of any grant of review by

the Board under paragraph (l)(1) or (2)

of this section shall be given as

provided in paragraph (d) of this

section. Public notice shall set forth a

briefing schedule for the appeal and

shall state that any interested person

may file an amicus brief. Notice of

denial of review shall be sent only to the

permit applicant and to the person(s)

requesting review.

(4) A petition to the Board under

paragraph (l)(1) of this section is, under

42 U.S.C. 307(b), a prerequisite to

seeking judicial review of the final

agency action.

(5) For purposes of judicial review,

final agency action occurs when a final

permit is issued or denied by the

permitting authority and agency review

procedures are exhausted. A final

permit decision shall be issued by the

permitting authority:

(i) When the Board issues notice to

the parties that review has been denied;

(ii) When the Board issues a decision

on the merits of the appeal and the

decision does not include a remand of

the proceedings; or

(iii) Upon the completion of remand

proceedings if the proceedings are

remanded, unless the Board’s remand

order specifically provides that appeal

of the remand decision will be required

to exhaust administrative remedies.

(6) Motions to reconsider a final order

shall be filed within ten (10) days after

service of the final order. Every such

motion must set forth the matters

claimed to have been erroneously

decided and the nature of the alleged

errors. Motions for reconsideration

under this provision shall be directed

to, and decided by, the Board. Motions

for reconsideration directed to the

Administrator, rather than to the Board,

will not be considered, except in cases

that the Board has referred to the

Administrator and in which the

Administrator has issued the final order.

A motion for reconsideration shall not

stay the effective date of the final order

unless specifically so ordered by the

Board.

(m) Computation of time. (1) Any time

period scheduled to begin on the

occurrence of an act or event shall begin

on the day after the act or event.

(2) Any time period scheduled to

begin before the occurrence of an act or

event shall be computed so that the

period ends on the day before the act or

event, except as otherwise provided.

(3) If the final day of any time period

falls on a weekend or legal holiday, the

time period shall be extended to the

next working day.

(4) Whenever a party or interested

person has the right or is required to act

within a prescribed period after the

service of notice or other paper upon

him or her by mail, 3 days shall be

added to the prescribed time.

(n) Public petitions to the Permitting

Authority.

(1) Any interested person (including

the permittee) may petition the

permitting authority to reopen a permit

for cause, and the permitting authority

may commence a permit reopening on

its own initiative. However, the

permitting authority shall not revise,

revoke and reissue, or terminate a

permit except for the reasons specified

in § 71.7(f)(1) or § 71.6(a)(6)(i). All

requests shall be in writing and shall

contain facts or reasons supporting the

request.

(2) If the permitting authority decides

the request is not justified, it shall send

the requester a brief written response

giving a reason for the decision. Denials

of requests for revision, revocation and

reissuance, or termination are not

subject to public notice, comment, or

hearings. Denials by the permitting

authority may be informally appealed to

the Environmental Appeals Board by a

letter briefly setting forth the relevant

facts. The Board may direct the

permitting authority to begin revision,

revocation and reissuance, or

termination proceedings under

paragraph (n)(3) of this section. The

appeal shall be considered denied if the

Board takes no action within 60 days

after receiving it. This informal appeal

is, under 42 U.S.C. 307, a prerequisite

to seeking judicial review of EPA action

in denying a request for revision,

revocation and reissuance, or

termination.

(3) If the permitting authority decides

the request is justified and that cause

exists to revise, revoke and reissue or

terminate a permit, it shall initiate

proceedings to reopen the permit

pursuant to § 71.7(f) or § 71.7(g).

§ 71.12 Prohibited acts.

Violations of any applicable

requirement; any permit term or

condition; any fee or filing requirement;

any duty to allow or carry out

inspection, entry, or monitoring

activities; or any regulation or order

issued by the permitting authority

pursuant to this part are violations of

the Act and are subject to full Federal

enforcement authorities available under

the Act.

[FR Doc. 96–16257 Filed 6–28–96; 8:45 am]

BILLING CODE 6560–50–P