01-26409. Clean Air Act Full Approval of Operating Permit Program; San Joaquin Valley Unified Air Pollution Control District, California

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing to fully approve the operating permit program for the San Joaquin Valley Unified Air Pollution Control District (“San Joaquin” or “District”). The District's operating permit program was submitted in response to the directive in the 1990 Clean Air Act (CAA) Amendments that permitting authorities develop, and submit to EPA, programs for issuing operating permits to all major stationary sources and to certain other sources within the permitting authorities' jurisdiction. EPA granted interim approval to the District's operating permit program on April 24, 1996. This action proposes approval of revisions to the District's permit program that were submitted to satisfy the conditions for full approval.

DATES:

Comments on the program revisions discussed in this proposed action must be received in writing by November 19, 2001.

ADDRESSES:

Written comments on this action should be addressed to Gerardo Rios, Air Division (AIR-3), EPA Region IX, 75 Hawthorne Street, San Francisco, California, 94105. You can inspect copies of the District's submittal, and other supporting documentation relevant to this action, during normal business hours at the EPA Region 9, 75 Hawthorne Street, San Francisco, California, 94105.

You may also see copies of the submitted Title V program at the following locations:

California Air Resources Board, Stationary Source Division, Rule Evaluation Section, 1001 “I” Street, Sacramento, CA 95814

The San Joaquin Valley Pollution Control District, 1990 E. Gettysburg Avenue, Fresno, CA 93726-0244

FOR FURTHER INFORMATION CONTACT:

Ed Pike, EPA Region IX, Permits Office (AIR-3), U.S. Environmental Protection Agency, Region IX, [phone] or [e-mail].

SUPPLEMENTARY INFORMATION:

This section provides additional information on today's rulemaking:

What is the operating permit program?

What rules were submitted for full approval?

How do the program changes qualify for full approval?

Are there other issues with the program?

What Is the Operating Permit Program?

The CAA Amendments of 1990 require all State and local permitting authorities to develop operating permit programs that met certain federal criteria. In implementing the operating permit programs, the permitting authorities require certain sources of air pollution to obtain permits that contain all applicable requirements under the CAA. The focus of the operating permit program is to improve enforcement by issuing each source a permit that consolidates all of the applicable CAA requirements into a federally enforceable document. By consolidating all of the applicable requirements for a facility, the source, the public, and the permitting authorities can more easily determine what CAA requirements apply and how compliance with those requirements is determined.

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include (but are not limited to) those that have the potential to emit: (1) 50 tons per year or more of volatile organic compounds or nitrogen oxides (NO_X) in a serious non-attainment; (2) 70 tons per year of particulate matter (PM₁₀) in a PM₁₀ non-attainment area; (3) 10 tons per year of any single Hazardous Air Pollutant (as defined under section 112 of the CAA); or (4) 25 tons per year or more of a combination of Hazardous Air Pollutants (HAPs).

What Rules Were Submitted for Full Approval?

Where an operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval contingent on the State or local permitting agency revising its program to correct the deficiencies. Because the San Joaquin operating permit program substantially, but not fully, met the requirements of part 70, EPA granted interim approval to each program in a rulemaking published on April 24, 1996 [61 FR 18083]. The interim approval notice described the conditions that had to be met in order for the San Joaquin program to receive full approval.

In response, San Joaquin adopted revisions to three permitting regulations on June 21, 2001. The first is District Rule 2520, Federally Mandated Operating Permits, which is the District's part 70 permitting rule. The District also made revisions to the elements of District Rule 2201, New and Modified Source Review, that contain part 70 requirements allowing a source to obtain a modification under Rule 2201 that also satisfies part 70 requirements. District Rule 2020, Exemptions, was also revised. The California Air Resources Board, on behalf of the District submitted these revised regulations and other program revisions on July 3, 2001. This Federal Register notice describes the changes that have been made to the San Joaquin operating permit program since interim approval was granted and how the revised program meets the conditions for full approval.

How Do the Program Changes Qualify for Full Approval?

EPA's April 24, 1996 rulemaking required that San Joaquin make a number of changes to the program to qualify for full approval. EPA is proposing to fully approve the revised program submitted to EPA on July 3, 2001. This revised program contains the following changes to address the interim approval requirements (for more information, please see the Technical Support Document):

Issue #1

In order for San Joaquin's program to receive full approval (and to avoid a disapproval upon the expiration of this interim approval), the California Legislature must revise the Health and Safety Code to eliminate the exemption of agricultural production sources from the requirement to obtain a permit. (See major source definition in 40 CFR 70.2 and applicability under 40 CFR 70.3)

Rule or Program Change

One of EPA's conditions for full title V program approval was the California Legislature's revision of the Health and Safety Code to eliminate the provision that exempts “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals” from the requirement to obtain a permit. See California Health and Safety Code section 42310(e). Even though the local Districts have, in many cases, removed the title V exemption for agricultural sources from their own rules, the Health and Safety Code has not been revised to eliminate this provision.

In evaluating the impact of the Health and Safety Code exemption, EPA believes there are a couple of key factors to consider. First, many post-harvest activities are not covered by the exemption and, thus, are still subject to title V permitting. For example, according to the California Air Resources Board (CARB), the Health and Safety Code exemption does not include activities such as milling and crushing, or canning or cotton ginning operations. Activities such as these are subject to review under the State's title V programs. See letter from Michael P. Kenny, Executive Officer, California Air Resources Board, to Jack Broadbent, Director, Air Division, U.S. EPA Region 9, dated September 19, 2001. In addition, since the granting of interim approval, the EPA has discovered that, in general, there is not a reliable or complete inventory of emissions associated with agricultural operations in California that are subject to the exemption. Although further research on this issue is needed, many sources with activities covered by the exemption may not have emission levels that would subject them to title V, and the State and/or individual Districts may be able to demonstrate that none of the sources that are exempt under the State law are subject to title V.

Based, in part, on these factors, EPA has tentatively concluded that requiring the immediate commencement of title V permitting of the limited types of agricultural activities presently subject to the exemption, without a better understanding of the sources and their emissions, would not be an appropriate utilization of limited local, state and federal resources. As a result, despite the State of California's failure to eliminate the agricultural permitting exemption, EPA is proposing to grant full approval to local Air District operating permit programs and allow a deferral of title V permitting of agricultural operations involved in the growing of crops or the raising of fowl or animals for a further brief period, not to exceed three years. During the deferral period, we expect to develop the program infrastructure and experience necessary for effective implementation of the title V permitting program to this limited category of sources.

EPA believes it is appropriate to defer permitting for this limited category of agricultural sources because the currently available techniques for determining emissions inventories and for monitoring emissions (e.g., from irrigation pumps and feeding operations) are problematic and will be dramatically enhanced by several efforts currently being undertaken with the cooperation and participation of the operators and agricultural organizations, as well as EPA, other federal agencies, and the State and local air pollution agencies. For example, the National Academy of Sciences is undertaking a study addressing emissions from animal feeding operations. Their report is due next year. In addition, EPA's Office of Air and Radiation is working with the U.S. Department of Agriculture to better address the impact of agricultural operations on air quality. We consider the effort to evaluate the existing science, improve on assessment tools, collect additional data, remove any remaining legal obstacles, and issue any necessary guidance within the three year deferral time frame to be ambitious. We welcome comments on other areas that might also warrant study, as well as ways that this work might be done more quickly.

During the interim deferral period, EPA will continue to work with the agricultural industry and our state and federal regulatory partners to pursue, wherever possible, voluntary emission reduction strategies. At the end of this period, EPA will, taking into consideration the results of these studies, make a determination as to how the title V operating permit program will be implemented for any potential major agricultural stationary sources.

Issue #2

Revise the applicability language in Rule 2520 section 2.2 and the definitions of Major Air Toxics Source (Rule 2520 section 3.18) and Major Source (Rule 2520 section 3.19) to be consistent with the Act and Part 70 to cover sources that emit at major source thresholds. (See 40 CFR 70.2, definition of “Major Source”)

Rule or Program Change: The District has amended the applicability language in Rule 2520 section 2.2, Rule 2520 section 3.18, and Rule 2520 section 3.19 to include sources with actual emissions at or above the major source thresholds, rather than just sources with the potential to emit at the major source thresholds.

Issue #3

Limit the exemption for non-major sources in Rule 2520 section 4.1 so that it does not exempt non-major sources that EPA determines, upon promulgation of a section 111 or 112 standard, must obtain Title V permits. (See 40 CFR 70.3)

Rule or Program Change: The District has amended the language in Rule 2520 section 4.1 to limit the exemption for non-major sources in Rule 2520 section 4.1 so that it does not exempt non-major sources that EPA determines, upon promulgation of a section 111 or 112 standard, must obtain Title V permits. Any source that falls into one or more of the source categories listed under section 4.1 cannot be exempted from the requirements to obtain a title V permit, even if it is not a major source.

Issue #4

Revise Rule 2520 section 7.1.3.2 to eliminate the requirement that fugitive emission estimates need only be submitted in the application if the source is in a source category identified in the major source definition in 40 CFR 70.2. (See 40 CFR 70.5(c))

Rule or Program Change: The District amended the language in Rule 2520 Section 7.1.3.2 to eliminate the requirement that fugitive emissions estimates need only be submitted in the application if the source is in a source category identified in the major source definition in 40 CFR 70.2. The District also added fugitive emissions to the list of emissions-related information that must be submitted with permit applications in section 7.1.3.1.

Issue #5

Revise Rule 2520 to provide that unless the District requests additional information or otherwise notifies the applicant of incompleteness within 60 days of receipt of an application, the application shall be deemed complete. (See 40 CFR 70.5(a)(2) and 70.7(a)(4))

Rule or Program Change: The District revised section 11.6.1 of District Rule 2520 to assure that “Unless the APCO requests additional information or otherwise notifies the applicant of incompleteness within 60 days of receipt of an application, the application shall be deemed complete.”

Issue #6

Revise Rule 2520 sections 11.1.4.2 and 11.3.1.1 and Rule 2201 5.3.1.1.1 to include notice “by any other means if necessary to assure adequate notice to the affected public.” (See 40 CFR 70.7(h)(1))

Rule or Program Change: The District revised the language in sections 11.1.4.2 and 11.3.1.1 of Rule 2520 and section 5.3.1.1.1 of Rule 2201 (which has been administratively renumbered as section 5.9.1.1 of Rule 2201) to include notice by any other means if necessary to assure adequate notice to the affected public.

Issue #7

Revise Rule 2520's permit issuance procedures to provide for notifying EPA and affected states in writing of any refusal to accept all recommendations for the proposed permit submitted by an affected state during the public/affected state review period. (See 40 CFR 70.8(b)(2))

Rule or Program Change: Language has been added to section 11.3.1.3 of Rule 2520 requiring the District to notify EPA and affected states in writing of any refusal to accept all recommendations for the proposed permit that an affected state submitted during the public/affected state review period.

Issue #8

Either delete section 11.7.5 in Rule 2520 and section 5.3.1.8.5 in Rule 2201, which purport to limit the grounds upon which EPA may object to a permit to compliance with applicable requirements, or revise them to be fully consistent with 40 CFR 70.8 (c).

Rule or Program Change: The District resolved this issue by revising section 11.7.5 of Rule 2520 and section 5.3.1.8.5 (which has been administratively renumbered as section 5.9.1.9.4) of Rule 2201 to be consistent with 40 CFR part 70 as follows: “EPA objection shall be limited to compliance with applicable requirements and the requirements of 40 CFR part 70.”

Issue #9

Revise Rule 2520 section 2.4 to clarify that the phrase in section 2.4 that “only the affected emissions units within the stationary source shall be subject to part 70 permitting requirements” applies only to stationary sources that are also area sources. (See 40 CFR 70.3(c))

Rule or Program Change: Section 2.4 was revised to read “For stationary sources, which are subject to Rule 2520 solely as a result of Section 2.4, only the emissions units within the stationary source that are subject to the section 111 or 112 standard or requirement shall be subject to the Part 70 permitting requirements.”

Issue #10

Revise Rule 2520 section 8.1 to provide that each model general permit and model general permit template will be subject to public, affected state, and EPA review consistent with initial issuance at least once every 5 years. (See 40 CFR 70.4(b)(3)(iii) and 70.7(c)(1))

Rule or Program Change: Section 8.1 of Rule 2520 was revised to provide that each model general permit and model general permit template will be subject to public, affected state, and EPA review consistent with initial issuance at least once every 5 years.

Issue #11:

Revise Rule 2520 Section 8.1 to provide that any permit for a solid waste incinerator unit that has a permit term of more than 5 years shall be subject to review, including public notice and comment, at least once every 5 years. (See 40 CFR 70.4(b)(3)(iii) and (iv) and 70.7(c))

Rule or Program Change: Section 8.1 of Rule 2520 was revised to provide that any permit for a solid waste incinerator unit that has a permit term of more than 5 years shall be subject to review, including public notice and comment, at least once every 5 years.

Issue #12

Revise Rule 2520 section 13.2.3 to state that the permit shield will only apply to requirements addressed in the permit. Section 504(f) of the Act and 40 CFR § 70.6(f) are both clear that the permit shield only extends to requirements that are addressed in the permit. EPA will not consider a source to be shielded for failure to comply with an applicable requirement if that applicable requirement is addressed only in the written reviews (such as a permit evaluation) supporting permit issuance and not in the permit.

Rule or Program Change: Rule 2520 section 13.2.3 was revised to read, “The permit shield applies only to requirements that are either identified and included by the District in the permit, or are requirements that the District, in acting on the application, determines in writing are not applicable to the source. In cases where the District determines that a requirement is not applicable to the source and provides a permit shield, the permit shall include the determination or a concise summary of the determination.”

Issue #13

Revise Rule 2520 section 9.12 to require that the permit contain terms and conditions for the trading of emissions increases and decreases to the extent that any applicable requirement provides for such trading without case by case approval. The District may limit transfers of emission reduction credits in accordance with District Rules 2201 and 2301. (See 40 CFR 70.6(a)(10))

Rule or Program Change: The language in section 9.11 (the corresponding section after a numbering correction) of Rule 2520 was revised to require that the permit contain terms and conditions for the trading of emissions increases and decreases to the extent that any applicable requirement provides for such trading without case by case approval.

Issue #14

Revise Rule 2520 section 9.0 (permit content) to include the 40 CFR § 70.6(c)(3) requirement for schedules of compliance for applicable requirements for which the source is in compliance or that will become effective during the permit term.

Rule or Program Change: A new section (Section 9.14) was added to Rule 2520. This section includes the 40 CFR § 70.6(c)(3) requirement for schedules of compliance for applicable requirements for which the source is in compliance or that will become effective during the permit term.

Issue #15

Revise Rule 2520 to treat changes made under the Prevention of Significant Deterioration (PSD) provisions of the Act in the same manner as “Title I modifications” as that term is defined in Rule 2520 and Rule 2201. (See 40 CFR 70.7 and 70.4(b)(12))

Rule or Program Change: Sections 3.20.4.1, 3.20.5, 6.4.1.3, and 6.4.4.5 of Rule 2520 were revised to treat changes made under the Prevention of Significant Deterioration (PSD) provisions of the Act in the same manner as “Title I modifications” as that term is defined in Rule 2520 and Rule 2201.

Issue #16

Revise Rule 2520 to state that notwithstanding permit shield provisions, if a source that is operating under a general permit or general permit template is later determined not to qualify for the terms and conditions of that general permit or template, then the source is subject to enforcement action for operation without a part 70 permit. (See 40 CFR 70.6(d))

Rule or Program Change: Section 13.2.4 was added to Rule 2520 to state that “Notwithstanding these permit shield provisions, if a source that is operating under a general permit or general permit template is later determined not to qualify for the terms and conditions of that general permit or template, then the source is subject to enforcement action for operation without a part 70 permit.”

Summary: As noted earlier, EPA is proposing to fully approve San Joaquin's revised operating permit program based on the revisions submitted to EPA on July 3, 2001.

Are There Other Issues With the Program?

On May 22, 2000, EPA promulgated a rulemaking that extended the interim approval period of 86 operating permits programs until December 1, 2001. (65 FR 32035) The action was subsequently challenged by the Sierra Club and the New York Public Interest Research Group (NYPIRG). In settling the litigation, EPA agreed to publish a notice in the Federal Register that would alert the public that they may identify and bring to EPA's attention alleged programmatic and/or implementation deficiencies in Title V programs and that EPA would respond to their allegations within specified time periods if the comments were made within 90 days of publication of the Federal Register notice.

EPA received a comment letter from one person on what they believe to be deficiencies with respect to Title V programs in California. EPA takes no action on those comments in today's action and will respond to them by December 1, 2001. As stated in the Federal Register notice published on December 11, 2000, (65 FR 77376) EPA will respond by December 1, 2001 to timely public comments on programs that have obtained interim approval; and EPA will respond by April 1, 2002 to timely comments on fully approved programs. We will publish a notice of deficiency (NOD) when we determine that a deficiency exists, or we will notify the commenter in writing to explain our reasons for not making a finding of deficiency. A NOD will not necessarily be limited to deficiencies identified by citizens and may include any deficiencies that we have identified through our program oversight.

Request for Public Comment

EPA requests comments on the program revisions discussed in this proposed action. Copies of the District's submittal and other supporting documentation used in developing the proposed full approval are contained in docket files maintained at the EPA Region 9 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 proposed full approval. The primary purposes of the docket are: (1) To allow interested parties a means to identify and locate documents so that they can effectively participate in the approval process, and (2) to serve as the record in case of judicial review. EPA will consider any comments received in writing by November 19, 2001.

Administrative Requirements

Under Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities because it merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. This rule does not contain any unfunded mandates and does not significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) because it proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duties beyond that required by state law. This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000). This rule also does not have Federalism implications because it will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, “Federalism” (64 FR 43255, August 10, 1999). The rule merely proposes to approve existing requirements under state law, and does not alter the relationship or the distribution of power and responsibilities between the State and the Federal government established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) or Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001), because it is not a significantly regulatory action under Executive Order 12866. This action will not impose any collection of information subject to the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., other than those previously approved and assigned OMB control number 2060-0243. For additional information concerning these requirements, see 40 CFR part 70. 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.

In reviewing State operating permit programs submitted pursuant to Title V of the Clean Air Act, EPA will approve State programs provided that they meet the requirements of the Clean Air Act and EPA's regulations codified at 40 CFR part 70. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a State operating permit program for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews an operating permit program, to use VCS in place of a State program that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.

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

Dated: October 11, 2001.

Laura Yoshii,

Acting Regional Administrator, Region IX.