Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations 32693

Issued by the Commission on June 18,

1996.

Cyril J. Pittack,

Acting Secretary.

[FR Doc. 96–15932 Filed 6–24–96; 8:45 am]

BILLING CODE 7710–FW–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 70

[TX–FRL–5526–4]

Clean Air Act Final Interim Approval of

Operating Permits Program; the State

of Texas

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final Source Category-Limited

Interim Approval.

SUMMARY: The EPA is promulgating

source category-limited interim

approval of the Operating Permits

program submitted by the Texas Natural

Resource Conservation Commission

(TNRCC) for the State of Texas for the

purpose of complying with Federal

requirements for an approvable State

program to issue operating permits to all

major stationary sources, except any

sources of air pollution over which an

indian tribe has jurisdiction.

EFFECTIVE DATE: July 25, 1996.

ADDRESSES: Copies of the State’s

submittal and other supporting

information used in developing this

source category-limited interim

approval are available for inspection

during normal business hours at the

following location:

EPA, Region 6, Permits Section (6PD–R),

1445 Ross Avenue, Suite 700, Dallas,

Texas 75202–2733.

TNRC

C, Office of Air Quality, 12124 Park 35

Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT:

David F. Garcia, Permits Section (6PD–

R), EPA, Region 6, 1445 Ross Avenue,

Suite 700, Dallas, Texas 75202–2733,

telephone (214) 665–7217.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

Title V of the 1990 Clean Air Act

Amendments (sections 501–507 of the

Clean Air Act (the Act), and

implementing regulations at 40 CFR part

70 require that States develop and

submit Operating Permits programs to

EPA by November 15, 1993, and that

EPA act to approve or disapprove each

program within one year after receiving

the submittal. The EPA’s program

review occurs pursuant to section 502 of

the Act and the part 70 regulations,

which together outline criteria for

approval or disapproval. Where a

program substantially, but not fully,

meets the requirements of part 70, EPA

may grant the program interim approval

for a period of up to two years. If EPA

has not fully approved a program by two

years after November 15, 1993, or by the

end of an interim program, it must

establish and implement a Federal

program.

On June 7, 1995, EPA proposed

source category-limited interim

approval of the Operating Permits

program for the State of Texas. See 60

FR 30037 (June 7, 1995). The EPA

received comments on the proposal and

compiled an updated Technical Support

Document which describes the

Operating Permits program in greater

detail. In this document, EPA is taking

final action to promulgate source

category-limited interim approval of the

Operating Permits program for the State

of Texas.

II. Final Action and Implications

A. Analysis of State Submission

The Governor of Texas submitted a

title V Operating Permits program for

the State of Texas on September 17,

1993, and supplemental submittals from

the Executive Director of TNRCC on

October 28, 1993, and November 12,

1993. The Texas title V Operating

Permits program includes among other

things TNRCC Regulation XII, title 30 of

the Texas Administrative Code (TAC)

Chapter 122 ‘‘Federal Operating

Permits’’ (the Texas permit regulation)

and TNRCC General Rules, title 30 of

TAC, section 101 (the Texas fee

regulation).

The EPA identified and discussed the

specific inconsistencies precluding full

approval of the Texas program in the

June 7, 1995, Federal Register

document. It is essential that these

inconsistencies be remedied by the State

consistent with the Act and part 70

prior to EPA granting full approval of

the State’s Operating Permits program.

The State committed to address certain

of the identified inconsistences in a

letter dated October 3, 1995, in a

manner sufficient to satisfy EPA

concerns. The State in the October 3,

1995, letter agreed to: (1) Revise section

122.120(4)(A–B) of the Texas permit

regulation regarding source

applicability; (2) revise section 122.010

of the Texas permit regulation to make

the Texas definition of ‘‘air pollutant’’

consistent with part 70, as it relates to

regulated air pollutant; (3) revise section

122.010 of the Texas permit regulation

to make the definition of ‘‘site’’

consistent with part 70, as it relates to

research and development activities; (4)

revise section 122.132 of the Texas

permit regulation in regard to

compliance schedule requirements; (5)

revise section 122.211 of the Texas

permit regulation to require ‘‘similar’’

changes allowed under an

Administrative Amendment to be

approved by EPA; and (6) revise section

122.202 of the Texas permit regulation

as it relates to General Permits. These

particular rules will be acceptable for

full approval if the State makes the

changes in its rules as specified in the

letter. Also, the State’s criminal

enforcement provisions meet title V and

part 70. The EPA proposed in the June

7, 1995, notice to accept that these

criminal enforcement statutory

provisions satisfied the intent of part 70

and solicited comments. No adverse

comments were received. The EPA’s

position is that the State’s criminal

enforcement provisions are acceptable

for both interim and full approval.

During the State’s process to revise

the Operating Permit regulation for full

title V approval, EPA will comment

based on the part 70 rule in place at the

time. In the action on the State’s

submittal for full approval, EPA will use

the criteria in whatever is the final part

70 regulation, whether it be the existing

July 21, 1992, regulation or a later

version (part 70).

B. Response to Comments

The EPA received three comment

letters (including one from TNRCC)

during the 30-day public comment

period held on the proposed interim

approval of the Texas program. The

commenters requested a 90-day

extension of the public comment period

based on interest to reevaluate the Texas

title V program and submit a plan with

a redesigned Texas title V program. The

EPA extended the comment period until

October 5, 1995, in a Federal Register

notice published August 4, 1995.

Comments were received from 27

parties during the extended period.

Below is EPA’s response to comments

received on the proposed source

category-limited interim approval for

the Texas Operating Permits program.

1. Comment 1—All the comments

received unanimously suggested EPA

delay and/or defer final approval of the

Texas interim program until such time

as TNRCC is able to submit a revised

Regulation XII and program submittal.

EPA Response—The EPA cannot

‘‘delay and/or defer’’ an action on a

pending title V program submittal.

However, in addition to preparing a

Response to Comments and a Federal
32694 Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations

Register notice after the end of the

comment period in October, EPA also

met with TNRCC a number of times to

discuss possible significant changes to

the State’s program design. Thus, EPA

tried to accommodate the State and

industry’s wishes to submit a revised

program design and yet meet its own

obligation to move forward on the

pending program submittal. The EPA

has expressed fundamental concerns

regarding the approvability of such

significant changes to the existing

program design. Mary Nichols, Assistant

Administrator for the Office of Air and

Radiation, sent a letter, dated February

7, 1996, to Mr. Barry McBee, Chairman

of TNRCC, which outlined EPA’s broad

concern with such a program redesign

as presented to EPA in discussion

meetings. A copy of the letter has been

placed in the docket and is available for

public review.

During this same timeframe, EPA

reviewed and drafted a detailed

response to comments received during

the public comment period. In addition,

EPA continued working on

promulgation of part 71, the Federal

operating permit rule. After the

promulgation of the part 71 rule, States

such as Texas without an approved

program will be subject to a part 71

program. This rule is expected to be

finalized and made effective in the

summer of 1996. On March 14, 1996,

EPA then received a request from Texas

to proceed expeditiously with a final

action on the June 7, 1995, proposal.

2. Comment 2—A commenter noted

that EPA cannot impose the three

conditions stated in the August 29,

1994, proposal for Operating Permits

Programs Interim Approval Criteria

until that action is promulgated. That

proposal would revise part 70 to allow

interim approval for States such as

Texas whose programs do not provide

for permits to incorporate all

requirements established through an

EPA-approved minor new source review

(MNSR) program. The EPA proposed at

60 FR 30039 three conditions a State

must meet in order to be eligible for

interim approval. Texas must: (1)

include in each operating permit issued

during the interim approval period, a

statement that MNSR requirements are

not included; (2) include a crossreference in each operating permit to the

MNSR permit for that source; and (3)

require reopening of permits for

incorporation of MNSR permit

conditions upon completion of the

interim approval period.

EPA Response—The EPA agrees, and

the August 29, 1994, proposal for

Operating Permits Programs Interim

Approval Criteria was finalized on June

20, 1996.

3. Comment 3—A commenter said

that all companies cannot meet the three

proposed conditions outlined in the

August 29, 1994, Federal Register

notice as previously discussed in

comment 2. The concern is that EPA is

assuming companies can list

modifications found in State MNSR

permits made years before, and crossreference the modification in the MNSR

permit with then-applicable enabling

authority.

EPA Response—The EPA does not

agree with the comment. Facilities that

emit air pollutants are required to obtain

and maintain the appropriate new

source review authorization whether it

is a major or MNSR permit. Due to these

requirements, EPA believes that

companies will be able to list and cross

reference MNSR permits modifications

made in the past. Where adequate

company records do not exist, the

facility may use State records. Where no

company or State records exist, the

facility must take steps to obtain the

required permit and may be subject to

appropriate enforcement action.

4. Comment 4—A commenter

requested that the negative applicability

requirement be eliminated for ‘‘tier 3

permits.’’ Only applicable requirements

should be addressed in the application;

no negative applicability requirements

are necessary.

EPA Response—The EPA does not

consider this comment relevant to this

action. The TNRCC has not adopted a

permitting program that includes ‘‘tier 3

permits,’’ nor has such a proposal been

submitted for EPA approval.

5. Comment 5—The State commented

that it does not agree with EPA that

MNSR should be considered an

‘‘applicable requirement’’ under part 70.

Should EPA determine MNSR to be an

applicable requirement in the final part

70 rule, the State requested EPA allow

it to use the ‘‘program substitution’’

concept presented in its comments on

the EPA’s August 29, 1994, proposed

rulemaking.

EPA Response—The EPA does not

agree with the State’s comment. First, it

continues to be the EPA’s position that

MNSR is an applicable requirement.

Since July 21, 1992, in the promulgated

rules which define the minimum

elements of an approvable State

Operating Permits program, EPA has

interpreted the Federal definition of

‘‘applicable requirement’’ to include

terms and conditions of ‘‘any

preconstruction permits issued pursuant

to regulations approved or promulgated

through rulemaking under title I.’’ Such

permits include all MNSR permits.

While the exclusion of certain MNSR

provisions may be allowed under

interim approval of the program, for full

program approval, the State program

must provide permits that include all

MNSR permits.

Second, the State can use its

‘‘program substitution’’ concept as long

as it meets all requirements of title V,

including requirements for annual and

initial compliance certification, the EPA

veto, compliance plans and schedules,

six month reporting, and prompt

reporting of deviations. The Texas

‘‘program substitution’’ concept as

presented to EPA does not meet title V

and part 70. Furthermore, in the area of

compliance for all part 70 permits, EPA

believes that compliance certification

places the burden of proof on the

source, not on the permitting agency, for

certifying compliance with all

applicable requirements. It is EPA’s

position the burden of proof is placed

on the source since the Texas permit

regulation 122.132(b)(1) requires the

responsible official of a source, not of

the permitting agency, to sign the

compliance documents.

6. Comment 6—The conditions on

permits issued during the interim

approval period were proposed in the

August 1994 proposal for programs that

do not require MNSR changes to be

incorporated in the operating permit as

applicable requirements. These

conditions were subsequently addressed

in the June 7, 1995, proposal, and were

commented on by the State. The State

proposes to: (a) Include in each

operating permit a standardized permit

provision stating ‘‘Preconstruction

authorizations including permits,

standard permits, flexible permit,

special permits, or special exemptions

which are referenced in this permit will

only be enforced under Regulation VI’’;

(b) use the permit form entitled

‘‘Preconstruction Authorization

References’’ for cross referencing; and

(c) if MNSR is determined to be an

applicable requirement in the final part

70 rule, the TNRCC staff will propose to

use the ‘‘program substitution’’ concept.

EPA Response—The final regulation

revising the interim approval criteria

(Operating Permits Program Interim

Approval Criteria) requires any

operating permit issued during an

interim approval meet certain

conditions if the permit does not

incorporate minor New Source Review

(MNSR) requirements. These conditions

are:

(1) Each permit must state that MNSR

requirements are not incorporated.

(2) Each permit must provide a cross

reference, such as a listing of the permit

number, for each MNSR permit
Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations 32695

containing an excluded minor NSR

term.

(3) The State must reopen or use a

substantially equivalent revision

process to incorporate any excluded

MNSR applicable requirements into

each operating permit prior to or upon

program transition to full approval.

(4) Each permit must indicate how

citizens may obtain access to excluded

MNSR permits.

(5) Each permit must state that the

MNSR requirements which are excluded

are not eligible for the permit shield

under section 70.6(f).

The State’s comment in (a) above

indicates that the title V permit will

reference NSR permit actions as

enforceable under Regulation VI. The

EPA does not agree this response

satisfies criterion (1) above. This

provision must be revised to state that

MNSR requirements are not

incorporated in each operating permit

issued during the interim approval

period. Additionally, the State must be

quite clear in any standardized permit

provision that all its major

‘‘preconstruction authorizations

including permits, standard permits,

flexible permit, special permits, or

special exemptions’’ are incorporated by

reference into the operating permit as if

fully set forth therein and therefore

enforceable under regulation XII (the

Texas operating permit regulation) as

well as regulation VI (the Texas

preconstruction permit regulation). As

noted in (b) above of the comment, the

State plans to use the ‘‘Preconstruction

Authorization Reference’’ form. This

form must list all MNSR authorizations

(permit number) for each minor

emission unit not being incorporated

into the operating permit. This reference

form which is part of the permit

application and permit will adequately

meet criterion (2). Criterion (3) requires

the State to reopen/revise permits for

incorporation of MNSR permit

conditions prior to or upon full program

approval. As noted in (c) above, the

State proposes to use its ‘‘program

substitution’’ concept. The EPA believes

that this concept is acceptable as long as

each permit issued during the interim

period is revised to meet all

requirements of title V, including

requirements for annual and initial

compliance certification, the EPA veto,

compliance plans and schedules, six

month reporting, and prompt reporting

of deviations.

The State must also ensure that the

additional conditions of the final

interim approval criteria rule, not

addressed in its comments, are met

during the interim period. As noted in

(4) above, the State must indicate in the

operating permit how citizens may

obtain access to excluded MNSR

permits. Finally, criterion (5) requires

the State to document in the title V

permit that excluded minor MNSR

terms are not eligible for the permit

shield under section 70.6(f).

7. Comment 7—The State proposes to

revise section 122.120(4)(C), pertaining

to Applicability, to state ‘‘any area

source, in a source category designated

by the Administrator’’ shall obtain an

operating permit. The TNRCC believes

this revision to the Texas permit

regulation is consistent with 40 CFR

70.3(a). The TNRCC believes this

suggested revision to the Texas permit

regulation corrects the deficiency

identified by EPA in the June 1995

Federal Register and makes section

122.120(4)(C) consistent with 40 CFR

70.3(a).

EPA Response—The EPA does not

agree with TNRCC’s comment. The

proposed language restricts the

Administrator to only ‘‘area sources’’ for

designation to title V permitting.

Pursuant to 40 CFR 70.3(a), the

Administrator may designate a number

of different types of sources other than

area sources subject to title V

permitting. As a condition for full

approval, TNRCC must revise section

122.120(4)(C) to be consistent with 40

CFR 70.3(a).

8. Comment 8—The State commented

that until a final part 70 and section

302(j) rulemaking become final they do

not plan to correct the identified

deficiency requiring the definition of

‘‘major source’’ to be revised to require

the inclusion of fugitive emissions for

source categories regulated under

section 111 or 112 of the Act.

Specifically, in the State’s definition,

source category xxvii only applies to

‘‘any other stationary source category

which as of August 7, 1980, is being

regulated under section 111 or 112 of

the Act.’’

EPA Response—Currently, part 70

requires fugitive emissions to be

counted for all sources subject to section

111 and 112 standards, and does not

limit the stationary source categories to

those which existed as of August 7,

1980. However, the August 29, 1994,

part 70 proposed revisions and the

August 31, 1995, supplemental part 70

proposal, if finalized, would not include

fugitive emissions for source categories

subject to section 111 or section 112

standards which were promulgated after

August 7, 1980. The August 31, 1995,

supplemental proposal further requires

the Administrator to make an

affirmative determination under section

302(j). For full approval, the State must

revise the Texas permit regulation to be

consistent with part 70.

9. Comment 9—The State defines in

the Texas permit regulation and also

requests that the EPA define ‘‘title I

modification’’ to include only

prevention of significant deterioration,

nonattainment, new source performance

standard and section 112(g)

modifications. The State does not

propose to change their definition

which was identified by EPA as a

deficiency in the June 1995 Federal

Register notice until this issue has been

resolved definitively and is defined in

the final part 70.

EPA Response—The EPA has

proposed to define ‘‘title I modification’’

in the August 31, 1995, Operating

Permits program and Federal Operating

Permits program, proposed rule. The

EPA proposed to define title I

modification to mean any modification

under part C and D of title I or sections

111(a)(4), 112(a)(5), or 112(g) of the Act

and regulations promulgated pursuant

to § 61.07 of part 61. If the definition of

‘‘title I modification’’ is finalized as

proposed in the August 31, 1995,

proposed rule, the State’s definition of

‘‘title I modification’’ would be

consistent with part 70. If the definition

of ‘‘title I modification’’ is changed from

that proposed in the August 31, 1995,

proposed rule to include MNSR

changes, the State must revise the Texas

permit regulation to be consistent with

part 70.

10. Comment 10—The State does not

agree to revise section 122.138 of the

Texas permit regulation as it relates to

the application shield for significant

modifications at this time. Instead, this

section will be revised when part 70

becomes final and the issue is resolved

definitively.

EPA Response—The EPA does not

agree with this comment. For full

approval, the Texas permit regulation

must be revised with whatever is the

final part 70 regulation, whether it be

the existing July 21, 1992, regulation or

a later version at the time a corrected

program is submitted. However, EPA

cannot approve a State program based

on revisions to part 70 that have not

been finalized.

11. Comment 11—The State provided

comments on the permit revisions

process. In regard to permit additions

(section 122.215) and off-permit (section

122.215), TNRCC does not propose to

change existing language in the Texas

permit regulation to correct the

identified deficiencies until part 70

becomes final and these issues are

resolved definitively.

EPA Response—In order to receive

full program approval, the State must
32696 Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations

revise its rules to be consistent with part

70, in accordance with whatever is the

final part 70 regulation, whether it be

the existing July 21, 1992, regulation or

a later version at the time a corrected

program is submitted. However, EPA

cannot approve a State program based

on revisions to part 70 that have not

been finalized.

12. Comment 12—The State proposes

not to further define section 502(b)(10)

as it relates to the operational flexibility

provisions in section 122.221 of the

Texas permit regulation.

EPA Response—In order to receive

full program approval, the State must

revise its rules to be consistent with part

70, in accordance with whatever is the

final part 70 regulation, whether it be

the existing July 21, 1992, regulation or

a later version at the time a corrected

program is submitted. However, EPA

cannot approve a State program based

on revisions to part 70 that have not

been finalized.

13. Comment 13—The State disagrees

with the EPA-identified deficiency that

the public notification for an operating

permit should include such information

as the emission changes from any

modification. The State believes section

122.153 of the Texas permit regulation

does not include this requirement

because its program should not be based

on emission changes.

EPA Response—The EPA disagrees

with this comment. The EPA specifies

in 40 CFR 70.7(h)(2) the information

that the public notice must include. For

full program approval, the State must

include the emissions change involved

in any permit modification.

14. Comment 14—The State

commented that fugitive emissions from

units without applicable requirements

need not be quantified in permit

applications, especially if the source

declares that it has major status.

EPA Response—The EPA agrees with

a portion of the comment. On July 10,

1995, EPA released White Paper I from

Lydia Wegman, Deputy Director for the

Office of Air Quality Planning and

Standards. A copy of this guidance

document has been placed in the docket

and is available for public review.

Under section B.2. ‘‘Required Emission

Information and Source Descriptions’’ of

White Paper I, for fugitive emissions

that are not subject to any applicable

requirements, the source would be

required to provide a general

description of the emission units and

their emissions in the application.

However, fugitive emissions from units

covered by an applicable requirement

need to be quantified. For full approval,

the Texas permit regulation must be

revised to reflect this position.

15. Comment 15—The State

commented that section 122.122

(relating to establishment of federally

enforceable restrictions on potential to

emit) of the Texas permit regulation

serves as an acceptable certification

process for grandfathered sites who

choose to limit their potential to emit

under the Operating Permit program.

The State also has concerns regarding

the January 25, 1995, guidance

memorandum which, among other

things, announced the availability of a

two-year transition period during which

a State could give sources additional

options for seeking federally enforceable

limitations on potential to emit. The

time period allotted—January 25, 1995,

through January 25, 1997—may not be

adequate given the expected delay of the

part 70 rule and approval of the Texas

Operating Permits program. Therefore,

the State requests EPA to extend the

transition period for two years following

interim approval of the Texas program.

EPA Response—The EPA will

consider this request to extend the

transition period for two years after

interim approval for States such as

Texas. However, this issue is not being

addressed in this document. This issue

will be addressed in EPA guidance and/

or memorandum at a later date. The

EPA is not addressing here whether

section 122.122 of the Texas permit

regulation is acceptable for purposes of

limiting potential to emit other than

during the transition period.

16. Comment 16—The State believes

that the notice of emergency required in

section 70.6(g)(3)(iv) is satisfied in the

TNRCC General Rules, section 101.6

and therefore does not agree with EPA

that there is a deficiency for full

approval. Section 101.6 has two

opportunities to submit information to

the State. First, the occurrence of a

major upset must be reported to the

agency as soon as possible. If a company

does not have all the information

available at the time of the initial

notification, then a second report is to

be submitted within two weeks of the

upset.

EPA Response—The EPA does not

agree with this comment. The State’s

allowance of time for agency

notification is inconsistent with the part

70 regulation. The part 70 regulation, at

section 70.6(g)(3), requires the permittee

to submit notice of the emergency to the

permitting authority within two

working days. For full approval, the

Texas permit regulation must be

consistent with part 70.

17. Comment 17—The State

commented that the Texas Legislature

convenes every two years and approves

the TNRCC budget for two-year periods

only. Therefore, the State is unable to

provide a four year estimate of the

permit program cost, as required in the

June 1995 Federal Register notice for

full approval, but will continue to

provide budgetary information when it

becomes available.

EPA Response—The EPA disagrees

with this comment. Pursuant to 40 CFR

70.4(b)(8), the State must include in the

fee demonstration an estimate of the

permit program cost for the first four

years after approval and a plan detailing

how the State plans to cover these costs.

The EPA is not requiring a budgetary

allowance from the Legislature, but

instead a projected estimate of the

permit program cost.

18. Comment 18—The State provided

in the October 3 letter a response to EPA

regarding the requirements for interim

authorization to clarify the ambiguity of

section 122.145(e)—the ‘‘interpretation

shield’’. The response is:

(a) Interpretations made pursuant to

section 122.145(e) will be limited to

whether and how a rule applies to a

specific unit.

(b) The EPA has the ability to order

TNRCC to reopen a permit in the event

EPA guidance becomes available after a

permit or revision is issued. Further,

because each interpretation will be a

provision of the permit, it will be

subject to EPA review and veto during

the EPA 45-day review period as

provided by the revision section of the

Texas regulation.

(c) The State will develop guidance

documents to assure proper

applicability determinations for each

applicable requirement. All

interpretations will be based on the

most current information available,

including guidance already received

from EPA. The State will request EPA’s

input prior to the development of the

guidance documents.

EPA Response—The EPA agrees with

TNRCC’s comments for interim

approval issues. However, for full

approval the State must revise the Texas

permit regulation in accordance to the

June 7, 1995, Federal Register notice.

C. Statutory Changes Enacted After the

Submittal of the State Program

Significant changes to Texas laws

were made by the Texas Legislature in

1995. These statutory changes raise

issues of concern which the State must

address before full approval for title V

can be granted. The State has the

obligation to address all the relevant,

recently enacted laws and demonstrate

how they meet title V and part 70.

This final agency action today does

not waive the EPA’s right to raise

statutory concerns and any attendant
Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations 32697

regulatory revisions the EPA deems

necessary to the State and identify

inconsistencies with those legislative

changes which must be corrected for

full approval. The EPA will present its

position on the laws to TNRCC prior to

the Texas 1997 legislative session,

during TNRCC’s corrective rulemaking

process, and in its FRN proposing action

on the State’s submittal for full

approval. Therefore, interested parties

will have full opportunity to comment

on the merits of the EPA’s positions on

the acceptability of the Texas 1995 laws

(such as the Texas Senate Bill 14,

‘‘Takings Impact Assessment,’’ among

others) for full title V program approval.

The following is a specific discussion

on the new audit and standing laws.

On May 23, 1995, Texas enacted

House Bill 2473, the Texas

Environmental, Health, and Safety

Audit Privilege Act (the Audit Privilege

Act) creating an immunity from civil,

administrative, and criminal penalties

for environmental violations discovered

through an audit as defined by the Act.

The Audit Privilege Act also created a

privilege for information associated

with audits which prohibits their

disclosure in administrative, civil, or

criminal actions for violations of

environmental law. The EPA has

reviewed the Audit Privilege Act, in

light of Clean Air Act requirements, title

V delegation requirements set forth in

40 CFR Part 70, and guidelines for full

title V approval issued jointly by the

Office of Enforcement and Compliance

Assurance and the Office of Air and

Radiation dated April 5, 1996, entitled

‘‘Effect of Audit/Immunity Privilege

Laws on States’ Ability to Enforce Title

V Requirements’’, referred to below as

the ‘‘Guidelines’’. A copy of the

document has been placed in the docket

and is available for public review. The

EPA is concerned that the Audit

Privilege Act may extend penalty

immunity to facilities which commit

repeat violations and violations which

may cause harm to human health and

the environment, and makes no

provision for recoupment of penalties

for economic benefit. Section 113(e) of

the Clean Air Act specifically

enumerates these three factors (among

others) for consideration in assessing

civil penalties. To the extent that the

Audit Privilege Act provides immunity

from civil penalties that does not permit

consideration of these factors,

appropriate civil penalties cannot be

assessed by a state. It is clear, pursuant

to the Guidelines, that EPA should not

approve state title V programs in states

where civil penalty immunity is granted

to violators without consideration of

compliance history, harm or risk of

harm, and economic benefit.

The EPA is also concerned that the

Audit Privilege Act may prevent the

State from obtaining appropriate

criminal penalties. Evidence necessary

to prove that a crime has been

committed may be protected by

privilege which may inhibit or prevent

the State from assessing appropriate

criminal penalties. The State must

demonstrate that it has the ability to

obtain appropriate criminal penalties

where an audit report reveals evidence

of prior criminal conduct on the part of

managers or employees. Another

problematic aspect of the Audit

Privilege Act is the disparity between its

provisions limiting disclosure of audit

report information by employees and

others, and the Clean Air Act Sections

113 and 322 which specifically protect

whistleblowers from retaliation and

provide awards for persons who furnish

information that leads to a criminal

conviction or civil penalty. The Texas

Audit Privilege Act does not, by its

terms, create or impose special

sanctions on informants, but it asserts

that a ‘‘Party to a confidentiality

agreement . . . who violates that

agreement is liable for damages caused

by the disclosure. . . ’’ In addition,

sanctions are created with regard to

government officials who disclose

privileged information. Pursuant to the

Guidelines, EPA is concerned that both

of these provisions may have a negative

impact on disclosures well beyond the

intended reach of the privilege.

Confidential informants are an

important source of leads for state and

federal enforcement programs.

The above analysis of the Audit

Privilege Act is intended to be

illustrative and does not preclude EPA

from raising additional issues of

concern. The analysis is solely limited

to title V of the Act and does not relate

to any other environmental program. As

noted previously, all interested parties

will have opportunity to comment on

the acceptability of this law for full title

V approval.

The Act authorizes States to

implement title V Operating Permit

programs in section 502(d). The statute

also sets forth the minimum elements of

a State permit program, including the

requirement that the permitting

authority have adequate authority to

assure that sources comply with all

applicable Act requirements, as well as

authority to enforce permits, including

recovering minimum civil penalties and

appropriate criminal penalties,

§ 502(b)(5) (A) and (E). Pursuant to title

V, EPA promulgated regulations

specifying the minimum required

elements of State Operating Permit

programs, found at 40 CFR Part 70.

These regulations explicitly require

States to have certain enforcement

authorities, including authority to seek

injunctive relief to enjoin a violation, to

bring suit to restrain persons where a

facility is posing an imminent and

substantial endangerment to public

health or welfare, and suit to recover

appropriate criminal and civil penalties.

Section 113(e) of the Act sets forth

penalty factors for EPA or a court to

consider in assessing penalties for civil

or criminal violations of the Act, factors

which necessarily apply to penalties for

violations of title V permits. The EPA is

concerned about the potential impact of

some State audit privilege and

immunity laws on the ability of the

States to enforce Federal requirements,

including those under title V of the Act.

Upon review and consideration of the

statutory and regulatory provisions

discussed above, EPA issued guidance

on April 5, 1996, entitled ‘‘Effect of

Audit Immunity/Privilege Laws on

States’ Ability to Enforce Title V

Requirements.’’ This guidance outlines

certain elements of the State audit

immunity and privilege laws which, in

EPA’s view, may so hamper the State’s

ability to enforce as to render the

Agency unable to delegate the title V

Operating Permit program. The

guidance is consistent with EPA’s audit

policy, ‘‘Incentives for Self-Policing:

Discovery, Disclosure, Correction and

Prevention of Violations’’ (60 FR 246,

December 22, 1995).

Section 502(b)(6) of the Act requires

an approvable State title V program to

include an opportunity for judicial

review in State court of the final permit

action by the applicant, any person who

participated in the public comment

process, and any other person who

could obtain judicial review under

applicable law. The EPA interprets the

statute to require, at a minimum, that

States provide judicial review of

permitting decisions to any person who

would have standing under Article III of

the United States Constitution. See 59

FR 31183 (June 17, 1994). In the 1993

program submittal, Texas included an

Attorney General (AG) Opinion which

set forth State laws and court decisions

and certified that Texas State laws on

standing were no narrower than the

Federal ones under Article III. Since the

time of the submittal in November 1993,

the Texas State Legislature met in

January 1995 and adopted revisions to

the existing standing law (Senate Bill

1546, an Act relating to persons affected

by matters in hearings before the Texas

Natural Resource Conservation
32698 Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations

Commission). The bill was enacted on

June 16, 1995, and became effective

September 1, 1995.

On the bill’s face, it does not impact

standing in a title V permitting decision.

This is because the bill applies only to

those State administrative actions

requiring an evidentiary hearing. The

bill on its face does not apply to State

administrative actions subject to a

legislative hearing (presentation of

comments with no right to crossexamination). Title V permit decisions

are only required to be subject to a

legislative hearing. Nevertheless, since

there had been a change which could

possibly impact the judicial review of

title V permit decisions, EPA required

the State to provide an Attorney General

Opinion setting forth all laws and court

decisions issued since the 1993 Opinion

and recertifying that State laws on

standing were still no narrower than the

Federal ones.

This Opinion was submitted on May

6, 1996. In addition, EPA required the

General Counsel and the Executive

Director to submit a letter committing to

implementing a permitting process that

provides for a standing test no narrower

than the Federal one. The letter also

describes in greater detail the public

participation process which is outlined

in sections 122.150 to 122.155 and

sections 122.310 to 122.316 of

Regulation XII. This letter was

submitted on May 6, 1996.

The EPA received on March 18, 1996,

a Petition to Reopen the Comment

Period for Texas Application for

Delegation of title V Programs under the

CAA. The Petition was submitted on

behalf of the Sierra Club, the

Environmental Defense Fund,

Galveston-Houston Area Smog

Prevention, and Clean Water Action.

The Request to Reopen was specifically

on the standing issue. The Petitioners

requested EPA to require that a new

certification be submitted by the Texas

Attorney General. The Opinion should

address the legislation passed in 1995

and all court opinions issued since the

1993 Attorney General’s Opinion. The

EPA was urged to obtain an explanation

from the Attorney General’s (AG) office

of its actual positions and to obtain a

written commitment from the AG to

take a position in future TNRCC appeals

that the Federal test be used. They also

asked EPA to require TNRCC to

promulgate rules that define the term

‘‘person who may be affected’’ (the term

used in the Texas title V regulations for

a person who may request a hearing and

therefore has the right to appeal a title

V permit decision). They also asked that

the rules explain how and when TNRCC

will give public notice, how and when

TNRCC will respond to comments, and

how and when TNRCC will provide

new notice and an opportunity for

comments when the application or

proposed permit is changed

significantly because of public input.

The EPA believes that the above

concerns of the Petitioners have already

been addressed by EPA’s requiring a

revised Attorney General’s Opinion and

the TNRCC letter. Although EPA did not

request the State to address the above

issues in exactly the same manner as

requested by Petitioners, EPA does

believe that all the concerns have been

addressed satisfactorily. Therefore, it is

EPA’s position that the Petition to

Reopen the Standing Issue has been

rendered moot.

A Motion to Deny the Petition was

filed April 9, 1996, on behalf of the

Texas title V Planning Committee.

Movants pleaded that the comment

period of 120 days should be sufficient

and that it has been over five months

since that lengthy comment period

ended. They also disagree that any of

the information is new and that

reopening of the comment period would

be prejudicial to the commenters that

prepared and submitted their comments

under the October 5, 1995, deadline.

Nevertheless, if EPA decides to consider

the Petitioners’ allegations either

officially or unofficially, they ask that

they be notified and provided an

opportunity to respond to the merits of

the Petition. The EPA again believes

that the Motion to Deny the Petition has

been rendered moot by EPA’s earlier

actions of requiring a revised AG

Opinion and a TNRCC letter.

Both Petitioner and Movant will have

the opportunity to provide their

comments on the merits of EPA’s

positions on the laws enacted in the

1995 legislative session during the 1997

legislative session, the TNRCC’s

corrective rulemaking public comment

period, and EPA’s comment period on

the corrective Texas title V program

submittal.

Petitioners raised another issue of

concern but did not specifically request

a reopening of the comment period on

it. The issue concerned TNRCC’s laws

and procedures governing public

availability of emissions data. This area

will be reviewed by EPA during the

State’s rulemaking process, and EPA

will determine if rule revisions and/or

a Program Implementation Agreement

specific to confidentiality are necessary

for full approval.

D. Final Action

The EPA is promulgating source

category-limited interim approval of the

Operating Permits program submitted

by the State on September 17, 1993, and

supplemental submittals on October 28,

1993, and November 12, 1993. The

submittals have been reviewed for

adequacy to meet the requirements of 40

CFR part 70. The results of this review

are included in the updated technical

support document, which will be

available in the docket in the locations

noted above. The submittal has

adequately addressed all 11 elements

required for interim approval as

discussed in part 70. However, there are

inconsistencies between the submittal

and the part 70 regulations which have

been generally discussed in this notice

and are described in greater detail in the

June 7, 1995, notice. These

inconsistencies involve the Texas

permit regulation and program

implementation particularly with regard

to applicability, permit application

requirements, and permit issuance and

revisions. It is essential that all the

inconsistencies specifically identified in

the June 7, 1995, notice be remedied by

the State prior to EPA granting full

approval of the State’s Operating

Permits program.

The part 70 revisions are projected to

be promulgated in the fall of 1996.

These revisions may in some respects be

used as the criteria for granting full

approval and may require the State to

make regulatory and statutory changes.

The scope of the Texas part 70

program approved in this notice applies

to all part 70 sources (as defined in the

approved program) within the State of

Texas, except any sources of air

pollution over which an indian tribe has

jurisdiction. See, e.g., 59 FR 55813,

55815–55818 (November 9, 1994). The

term ‘‘indian tribe’’ is defined under the

Act as ‘‘any indian tribe, band, nation,

or other organized group or community,

including any Alaska Native village,

which is Federally recognized as

eligible for the special programs and

services provided by the United States

to indians because of their status as

indians.’’ See section 302(r) of the CAA;

see also 59 FR 43956, 43962 (August 25,

1994); 58 FR 54364 (October 21, 1993).

Requirements for approval, specified

in 40 CFR 70.4(b), encompass section

112(l)(5) requirements for approval of a

program for delegation of section 112

standards as promulgated by EPA as

they apply to part 70 sources. Section

112(l)(5) requires that the State’s

program contain adequate authorities,

adequate resources for implementation,

and an expeditious compliance

schedule, which are also requirements

under part 70. Therefore, EPA is also

promulgating approval under section

112(l)(5) and 40 CFR 63.91 of the State’s

program for receiving delegation of
Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations 32699

section 112 standards that are

unchanged from Federal standards as

promulgated. This program for

delegations only applies to sources

covered by the part 70 program.

This interim approval, which may not

be renewed, extends until July 27, 1998.

During this interim approval period, the

State of Texas is protected from

sanctions, and EPA is not obligated to

promulgate, administer, and enforce a

Federal Operating Permits program in

the State of Texas. Permits issued under

a program with source category-limited

interim approval have full standing with

respect to part 70, and the one year time

period for submittal of permit

applications by subject sources begins

upon the effective date of this interim

approval. The State’s transition

schedule requires the State to take final

action on applications for 400 sites each

of the first two years, 1,000 sites the

third year, and 600 sites each of the last

two years.

If Texas fails to submit a complete

corrective program for full approval by

January 26, 1998, EPA will start an 18-

month clock for mandatory sanctions. If

Texas then fails to submit a corrective

program that EPA finds complete before

the expiration of that 18-month period,

EPA will apply sanctions as required by

section 502(d)(2) of the Act, which will

remain in effect until EPA determines

that the State of Texas has corrected the

deficiency by submitting a complete

corrective program.

If EPA disapproves Texas’ complete

corrective program, EPA will apply

sanctions as required by section

502(d)(2) on the date 18 months after

the effective date of the disapproval,

unless prior to that date Texas has

submitted a revised program and EPA

has determined that it corrected the

deficiencies that prompted the

disapproval.

In addition, discretionary sanctions

may be applied where warranted any

time after the expiration of an interim

approval period if the State of Texas has

not timely submitted a complete

corrective program or EPA has

disapproved its submitted corrective

program. Moreover, if EPA has not

granted full approval to the Texas

program by the expiration of this

interim approval and that expiration

occurs after November 15, 1995, EPA

must promulgate, administer, and

enforce a Federal permits program for

the State of Texas upon interim

approval expiration.

III. Administrative Requirements

A. Docket

Copies of the State’s submittal, other

information relied upon for the final

source category-limited interim

approval, including the 27 public

comment letters received and reviewed

by EPA on the proposal, and

information referenced in this notice,

are contained in docket number OPP–7–

9–1 maintained at the EPA Regional

Office. The docket is an organized and

complete file of all the information

submitted to, or otherwise considered

by, EPA in the development of this final

source category-limited interim

approval. The docket is available for

public inspection at the location listed

under the ADDRESSES section of this

document.

B. Executive Order 12866

The Office of Management and Budget

has exempted this action from Executive

Order 12866 review.

C. Regulatory Flexibility Act

The EPA’s actions under section 502

of the Act do not create any new

requirements, but simply address

Operating Permits programs submitted

to satisfy the requirements of 40 CFR

part 70. Because this action does not

impose any new requirements, it does

not have a significant impact on a

substantial number of small entities.

D. Unfunded Mandates

Under Section 202 of the Unfunded

Mandates Reform Act of 1995, signed

into law on March 22, 1995, EPA must

prepare a budgetary impact statement to

accompany any proposed or final rule

that includes a Federal mandate that

may result in estimated costs to State,

local, or tribal governments in the

aggregate; or to the private sector, of

$100 million or more. Under Section

205, EPA must select the most costeffective and least burdensome

alternative that achieves the objectives

of the rule and is consistent with

statutory requirements. Section 203

requires EPA to establish a plan for

informing and advising any small

governments that may be significantly

or uniquely impacted by the rule.

The EPA has determined that the

approval action promulgated today does

not include a Federal mandate that may

result in estimated costs of $100 million

or more to either State, local, or tribal

governments in the aggregate, or to the

private sector. This Federal action

approves pre-existing requirements

under State or local law, and imposes

no new Federal requirements.

Accordingly, no additional costs to

State, local, or tribal governments, or to

the private sector, result from this

action.

List of Subjects in 40 CFR Part 70

Environmental protection,

Administrative practice and procedure,

Air pollution control, Intergovernmental

relations, Operating permits, Reporting

and recordkeeping requirements.

Authority: 42 U.S.C. 7401–7671q.

Dated: June 13, 1996.

Jane N. Saginaw,

Regional Administrator (6RA).

Part 70, title 40 of the Code of Federal

Regulations, is amended as follows:

PART 70—[AMENDED]

1. The authority citation for part 70

continues to read as follows:

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

2. Appendix A to part 70 is amended

by adding the entry for the State of

Texas in alphabetical order to read as

follows:

Appendix A to Part 70—Approval

Status of State and Local Operating

Permits Programs

* * * * *

Texas

(a) The TNRCC submitted its Operating

Permits program on September 17, 1993, and

supplemental submittals on October 28,

1993, and November 12, 1993, for approval.

Source category-limited interim approval is

effective on July 25, 1996. Interim approval

will expire July 27, 1998. The scope of the

approval of the Texas part 70 program

excludes all sources of air pollution over

which an Indian Tribe has jurisdiction.

(b) (Reserved)

* * * * *

[FR Doc. 96–16126 Filed 6–24–96; 8:45 am]

BILLING CODE 6560–50–P

40 CFR Part 271

[FRL–5524–9]

Final Authorization of State Hazardous

Waste Management Program:

Nebraska

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Immediate final rule.

SUMMARY: Nebraska has applied for final

authorization of revisions to its

hazardous waste program under the

Resource Conservation and Recovery

Act of 1976 as amended (hereinafter

RCRA). Nebraska’s revisions consist of

provisions contained in rules

promulgated between July 1, 1985 and

June 30, 1990, otherwise known as Non-