[Federal Register Volume 62, Number 52 (Tuesday, March 18, 1997)]
[Proposed Rules]
[Pages 12778-12787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6826]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70
[AD-FRL-5710-8]
Clean Air Act Interim Approval of Operating Permits Program;
Commonwealth of Virginia
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed interim approval.
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SUMMARY: EPA proposes interim approval of the Commonwealth of
Virginia's Operating Permits Program, which Virginia submitted in
response to Federal statutory and regulatory directives that States
adopt programs providing for the issuance of operating permits to all
major stationary sources and to certain other sources. EPA is proposing
interim approval of Virginia's submittal because Virginia's program
substantially meets the requirements for approval set forth at 40 Code
of Federal Regulations (CFR) Part 70, but still requires some revisions
to fully meet those requirements. The required revisions which Virginia
will have to make before EPA could grant full approval are discussed in
this notice.
DATES: Comments on this proposed action must be received in writing by
April 17, 1997. Comments should be addressed to the contact indicated
below.
ADDRESSES: Copies of the State's submittal and other supporting
information used in developing the proposed interim approval are
available for inspection during normal business hours at the following
locations: (1) U.S. EPA Region III; Air, Radiation, & Toxics Division;
841 Chestnut Building; Philadelphia, PA 19107, and (2) Virginia
Department of Environmental Quality; 629 East Main Street, Richmond,
Virginia 23219.
FOR FURTHER INFORMATION CONTACT: Ray Chalmers, 3AT23; U.S. EPA Region
III; Air, Radiation, & Toxics Division; 841 Chestnut Building;
Philadelphia, PA 19107. (215) 566-2061.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Submittal and Review Requirements
As required under Title V of the 1990 Clean Air Act Amendments
(sections 501-507 of the Clean Air Act (CAA)), EPA has promulgated
rules which define the minimum elements of an approvable State
operating permits program and the corresponding standards and
procedures by which the EPA will approve, oversee, and withdraw
approval of State operating permits programs (see 57 FR 32250 (July 21,
1992)). These rules are codified at 40 Code of Federal Regulations
(CFR) Part 70. Title V directs States to develop, and submit to EPA,
programs for issuing these operating permits to all major stationary
sources and to certain other sources.
The CAA directs States to develop and submit these programs to EPA
by November 15, 1993, and requires EPA 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 CAA and the part
70 regulations, which together outline criteria for approval or
disapproval. Where a program substantially, but not fully, meets the
requirements of section 502 of the CAA and Part 70, EPA may grant the
program interim approval for a period of up to 2 years. If EPA has not
fully approved a program by November 15, 1995, or by the end of an
interim program, it must establish and implement a Federal program.
Due in part to pending litigation over several aspects of the Part
70 rule promulgated on July 21, 1992, Part 70 is in the process of
being revised. When the final revisions to Part 70 are promulgated, the
requirements of the revised Part 70 will redefine EPA's criteria for
the minimum elements of an approvable State operating permits program
and the corresponding standards and procedures by which EPA will review
State operating permits program submittals. Until the date on which the
revisions to Part 70 are promulgated, the currently effective July 21,
1992, version of Part 70 shall be used as the basis for EPA review.
B. Federal Oversight and Potential Sanctions
If EPA were to finalize this proposed interim approval, it would
extend for two years following the effective date of the final interim
approval. During the interim approval period, Virginia would be
protected from sanctions, and EPA would not be obligated to promulgate,
administer and enforce a Federal permits program for the Commonwealth.
Permits issued under a program with 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 interim approval, as does the three year time period for processing
the initial permit applications.
Following final interim approval, if Virginia failed to submit a
complete
[[Page 12779]]
corrective program for full approval by the date six months before
expiration of the interim approval, EPA would be required to start an
18 month clock for mandatory sanctions. If Virginia then failed to
submit a corrective program that EPA found complete before the
expiration of the 18 month period, EPA would be required to apply one
of the sanctions in section 179(b) of the CAA, which would remain in
effect until EPA determined that Virginia had remedied the deficiency
by submitting a complete corrective program. Moreover, if the
Administrator found a lack of good faith on the part of Virginia, both
sanctions under section 179(b) would be required to apply after the
expiration of the 18 month period until the Administrator determined
that Virginia had come into compliance. In any case, if, six months
after application of the first sanction, Virginia still had not
submitted a corrective program that EPA found complete, a second
sanction would be required.
If, following final interim approval, EPA were to disapprove
Virginia's complete corrective program, EPA would be required to apply
one of the section 179(b) sanctions on the date 18 months after the
effective date of the disapproval, unless prior to that date Virginia
had submitted a revised program and EPA had determined that it
corrected the deficiencies that prompted the disapproval. Moreover, if
the Administrator found a lack of good faith on the part of Virginia,
both sanctions under section 179(b) would be required to apply after
the expiration of the 18 month period until the Administrator
determined that Virginia had come into compliance. In all cases, if,
six months after EPA applied the first sanction, Virginia had not
submitted a revised program that EPA had determined corrected the
deficiencies that prompted disapproval, a second sanction would be
required.
In addition, discretionary sanctions may be applied where warranted
any time after the end of an interim approval period if Virginia has
not timely submitted a complete corrective program or EPA has
disapproved a submitted corrective program. Moreover, if EPA has not
granted full approval to Virginia's program by the expiration of the
interim approval, EPA must promulgate, administer and enforce a Federal
permits program for Virginia after the interim approval expires.
II. Description of Virginia's Submittal
Virginia submitted an operating permits program to EPA on November
12, 1993, pursuant to the requirements of Title V. The submittal
included regulations, an Attorney General's opinion, a program
description, permitting program documentation, and other required
elements. On January 14, 1994, Virginia submitted a supplemental letter
pertaining to enhanced monitoring. EPA disapproved that submittal in a
Federal Register notice published on December 5, 1994 (59 FR 62324).
EPA disapproved the submittal because it did not provide citizens
with adequate judicial standing to challenge permits, did not prevent
the default issuance of permits, did not contain regulations which were
still in effect, did not cover the proper universe of sources, did not
ensure that permits would include all applicable requirements, and did
not correctly delineate permit provisions enforceable only by Virginia.
In addition, EPA identified numerous other deficiencies that Virginia
would need to correct to meet the federal requirements for a fully
approvable program, although these other deficiencies were not bases
for the disapproval action. These other issues were what EPA calls
``interim approval issues''--deficiencies that would prevent granting
full approval to the State's program, but that leave the program
qualified for interim approval because they don't cause it to fail to
``substantially meet'' the requirements of the CAA.
On January 9, 1995, Virginia submitted revised regulations and a
revised Attorney General's opinion as amendments to its original
program, and asked that EPA approve the revised program. On January 17,
1995, Virginia submitted an additional copy of the revised regulations
(the version published in the Virginia Register). Finally, on May 17,
1995, Virginia again amended its program by submitting revised
statutory language and an amended Attorney General's opinion. The
revisions addressed many of the disapproval bases and other
deficiencies EPA had previously identified. However, Virginia did not
submit revised judicial standing provisions. Virginia did not revise
these provisions because it believed its judicial standing provisions
were adequate and had sued EPA to contest EPA's conclusion that they
were not.
EPA proposed disapproval of Virginia's revised submittal in a
Federal Register notice published on September 19, 1995 (60 FR 48435).
EPA proposed disapproval because Virginia still did not provide
citizens with adequate judicial standing to challenge permits, because
Virginia did not assure that all sources required by the CAA to obtain
Title V permits would be required to obtain such permits, and because
Virginia did not adequately provide for collection of Title V program
fees. EPA also identified as interim approval issues the fact that
Virginia had defined units as ``insignificant'' at far higher emissions
levels than those which EPA considered ``sound,'' as well as certain
other provisions pertaining to insignificant activities.
On November 8, 1995, Virginia submitted revised Title V operating
permit regulations to EPA, which the Commonwealth asserted corrected
the major regulatory problems which EPA had identified in Virginia's
previous submittals, and again asked that EPA approve the State's
program. However, these were emergency regulations in effect for only
one year, and Virginia had taken no action to revise its judicial
standing provisions to give all affected citizens the right to
challenge in Virginia's courts operating permits issued by Virginia.
Moreover, Virginia had not corrected provisions pertaining to
insignificant activities which EPA had identified as raising interim
approval issues. On September 10 and 12, 1996, Virginia again submitted
to EPA revised Title V program regulations, this time regulations which
had been permanently adopted, and once more asked that EPA approve the
State's Title V program. However, Virginia had still not revised its
judicial standing provisions and had still not corrected provisions
pertaining to insignificant activities. Since Virginia's November, 1995
and September, 1996 submittals did not properly address previously
identified deficiencies, EPA did not propose to take action on these
submittals when EPA initially received them.
Virginia has since appropriately revised its judicial standing
provisions. After the Fourth Circuit Court of Appeals affirmed EPA's
disapproval of Virginia's program, 80 F.3d 869 (1996), Virginia
appealed its case to the U.S. Supreme Court. On January 21, 1997, the
Supreme Court decided not to hear Virginia's case. Virginia had
prepared for the possibility that the Courts might not rule in the
Commonwealth's favor by passing a revised judicial standing law,
acceptable to EPA, which would go into effect should the Courts not
find for Virginia.
On February 6, 1997, Virginia submitted to EPA an Attorney
General's opinion affirming that Virginia's acceptable judicial
standing law would be in effect as of February 15, 1997 as a result of
the U.S. Supreme Court's January 21, 1997 denial of Virginia's
petition. The Attorney General's
[[Page 12780]]
opinion also addressed several other remaining legal issues. In
addition, on February 27, 1997, Virginia's Department of Environmental
Quality (VADEQ) agreed to commit to recommending revisions to
regulatory requirements and also agreed to make certain interpretations
of existing regulatory requirements. These agreements are discussed
below when relevant.
As a result of these recent revisions, EPA has determined that
Virginia's Title V submittal now substantially meets the requirements
for approval set forth at 40 CFR part 70, and EPA is therefore
proposing interim approval of Virginia's submittal. The portions of the
submittal for which EPA is proposing interim approval consist of the
operating permit and operating permit fee regulations submitted on
September 10, 1996, the acid rain operating permit regulations
submitted on September 12, 1996, and other non-regulatory
documentation. EPA cannot propose full approval because Virginia must
still address certain ``interim approval issues,'' as discussed below.
Concurrently with this proposed interim approval, EPA is withdrawing
the proposal to disapprove Virginia's submittal which EPA published in
the Federal Register on September 19, 1995.
III. Analysis of Virginia's Submittal
This section focuses on how Virginia has corrected the program
deficiencies which EPA identified in Virginia's program in the proposed
disapproval notice which EPA published at 60 FR 48435 on September 19,
1995, and on certain other important deficiencies which Virginia must
still address before EPA can fully approve the Commonwealth's program.
Virginia's full program submittal, EPA's Technical Support Document
(TSD), which provides additional analysis of Virginia's submittal, and
other relevant materials are available as part of the public docket.
Virginia's Title V operating permit program submittal
substantially, but not fully, meets the requirements of the CAA and of
the implementing regulations at 40 CFR Part 70. Virginia has
substantially corrected the deficiencies which had earlier caused EPA
to disapprove and to propose to disapprove Virginia's programs. The
deficiencies which EPA identified as bases for disapproval when it
published its September 19, 1995, Federal Register notice proposing
disapproval of Virginia's program were that Virginia's Title V program
submittal: (1) Did not provide all citizens with adequate judicial
standing to challenge State permits; (2) did not assure that all
sources required by the CAA to obtain Title V permits would be required
to obtain such permits; and (3) did not contain an adequate provision
for collection of Title V program fees. EPA discusses below the changes
Virginia made in its Title V submittal to correct these deficiencies.
EPA also identified other deficiencies during its previous review,
which it identified as interim approval issues. Virginia has already
corrected some of these deficiencies. Discussed below are changes which
Virginia made which adequately address some of these previously
identified deficiencies, as well as certain additional changes which
Virginia must still make before EPA could grant full approval to
Virginia's program.
A. Deficiencies Corrected
1. Virginia's Judicial Standing Provisions
A major reason for EPA's disapproval and its proposal to disapprove
Virginia's earlier Title V operating permit program submittals was that
Virginia's law did not provide interested parties with adequate
standing to obtain judicial review in State court of final Title V
permit decisions. Virginia's judicial standing law restricted the right
to judicial review to those who had suffered an actual or imminent
injury which was an invasion of ``an immediate, pecuniary and
substantial interest which is concrete and particularized.'' EPA, and
the U.S. Court of Appeals for the 4th Circuit, concluded that
Virginia's requirement that a petitioner had to demonstrate a
``pecuniary'' interest was too restrictive to be approved under Title
V. See 80 F.3rd 869 (4th Cir., 1996).
After EPA's position was upheld by the Fourth Circuit Court of
Appeals, Virginia appealed the case to the U.S. Supreme Court. On
January 21, 1997, the Supreme Court declined to hear Virginia's case.
To be prepared should EPA's position that Virginia's judicial standing
provisions were deficient be upheld by the Courts, Virginia had adopted
revised and acceptable judicial standing provisions, at sections 10.1-
1318, 10.1-1457, and 62.1-44.29 of the Code of Virginia, but specified
that the revised provisions would become effective only if Virginia's
suit against EPA was unsuccessful.
The Supreme Court's refusal to take Virginia's appeal has caused
Virginia's revised judicial standing provisions to become effective,
and Virginia's standing provisions are now fully acceptable. Virginia's
revised standing law now provides judicial standing to any person who
``meets the standard for judicial review of a case or controversy
pursuant to Article III of the United States Constitution.'' It further
provides that ``a person shall be deemed to meet such standard if (i)
such person has suffered an actual or imminent injury which is an
invasion of a legally protected interest and which is concrete and
particularized; (ii) such injury is fairly traceable to the decision of
the Board and not the result of the independent action of some third
party not before the court; and (iii) such injury will likely be
redressed by a favorable decision by the court.'' This new standard is
consistent with the standard for Article III standing articulated by
the Supreme Court in Lujan v. Defenders of Wildlife, 112 S. Ct. 2130
(1992). Consequently, EPA has determined that Virginia's standing
provisions meet the requirements of CAA section 502(b)(6) and 40 CFR
70.4(b)(3).
2. Applicability Under the Operating Permits Program
In the original disapproval of Virginia's program, EPA identified
as a basis for disapproval Virginia's failure to require issuance of
permits to the proper universe of sources required by part 70. See 59
FR 62325. In addition, in its September 19, 1995, Federal Register
notice proposing disapproval of Virginia's previous operating permit
program submittal, EPA again cited the fact that the submittal did not
ensure the applicability of the Title V operating permit program to all
sources required to be subject to the program under 40 CFR 70.3 as a
reason for disapproving the submittal.
This was because in the applicability sections of the earlier
version of its regulations (which were designated as sections 120-08-
0501 and 120-08-0601) Virginia should have listed all of the CAA
requirements which trigger Title V applicability, as they are set forth
at 40 CFR 70.3. Instead of meeting this requirement by listing federal
CAA section 111 and 112 requirements, Virginia inappropriately listed
certain of its own air pollution control regulations, into which it had
incorporated federal CAA section 111 and 112 requirements. In the
revised regulations it submitted to EPA in September 1996, Virginia
correctly cited federal CAA section 111 and 112 requirements in the
applicability sections of its regulations (now designated as sections 9
VAC 5-80-50 and 9 VAC 5-80-310), thus correcting this deficiency. As
discussed later in this notice, Virginia's regulations regarding
applicability
[[Page 12781]]
continue to present a minor facial inconsistency with part 70, which
EPA does not view as an impediment to future full approval of the
Commonwealth's program.
3. Permit Fee Demonstration
In its September 19, 1995, Federal Register notice EPA cited the
inadequacy of the permit fee provisions in Virginia's submittal as
another reason for proposing disapproval of the submittal. The
deficiency in the fee provision was that Virginia had not set a minimum
fee amount of $25 per ton of emissions, to be adjusted for consumer
price inflation (CPI) using a 1989 base year. Virginia revised its
regulations to correct this deficiency.
In its prior notice EPA also identified as a concern a statutory
limit on the amount of fees which the Commonwealth can collect. This
statutory limit, which is found in the Virginia Air Pollution Control
Law at Sec. 10.1-1322 B, appears to create a cap of $25 per ton of
emissions, to be adjusted for inflation using a 1990 base year. EPA
stated that the statute should be revised to specify a base year of
1989. EPA believed that unless Virginia made this change the
Commonwealth would not be able to collect the full fee amount specified
by its regulations because of the statutory cap.
Virginia did not change this statutory provision. However,
Virginia's Attorney General provided an assurance that this cap would
not interfere with the State's ability to collect the full amount of
required fees. Virginia's Attorney General stated that: ``Virginia Code
Sec. 10.1-1322(B) provides that the annual permit fees `shall be
adjusted annually by the Consumer Price Index as described in Sec. 502
of the federal Clean Air Act.' '' Since Code Sec. 10.1-1322(B)
references Sec. 502 and Sec. 502 provides that adjustment shall be made
using 1989 as the base year, the CPI adjustment required by Code
Sec. 10.1-1322(B) also employs a 1989 base year. The reference in Code
Sec. 10.1-1322(B) to a 1990 base year does not pertain to the CPI
adjustment, but refers instead to the year in which the initial $ 25
per ton charge applies. In keeping with the requirements of section 502
of the CAA as interpreted by EPA and for this purpose only, the year
1990 runs from September 1, 1989 through August 31, 1990.'' See
Supplement to January 6, 1995 Attorney General's Opinion dated February
6, 1997. Because the fee cap as adjusted by the CPI under the Virginia
fee statute is in fact the same as the amount as the fee assessed under
the Virginia regulations (i.e., the calculation begins at $25 per ton
and is adjusted by changes in the CPI since 1989), EPA is satisfied
that Virginia will be able to assess fees which meet the presumptive
minimum required under Title V.
4. Other Deficiencies Corrected
In its September 19, 1995, Federal Register notice EPA cited
several other deficiencies in the insignificant activities provisions
in Virginia's submittal which would prevent EPA from being able to
grant full approval to the program. Virginia corrected some but not all
of these deficiencies. In this section EPA discusses the deficiencies
which Virginia corrected.
In its previous proposed disapproval notice, EPA expressed concern
regarding the fact that Virginia had defined as insignificant all
emissions units with uncontrolled emissions of less than 10 tons per
year of nitrogen dioxide, sulfur dioxide, and total suspended
particulates or particulate matter (PM10), less than seven tons per
year of volatile organic compounds, and less than 100 tons per year of
carbon monoxide (CO). EPA noted that it considered these levels too
high. Virginia responded to EPA's concerns by changing its
insignificant activity provisions to define units as insignificant
which had uncontrolled emissions of less than 5 tons per year (TPY) of
nitrogen dioxide, sulfur dioxide, total suspended particulates or
particulate matter (PM10), and volatile organic compounds. EPA
considers the exemption level of less than 5 TPY of uncontrolled
emissions of these pollutants to be acceptable. Virginia did not change
its specification that units with uncontrolled CO emissions of less
than 100 TPY are insignificant. For the reasons discussed in the
September 19, 1995 Federal Register notice, EPA continues to regard
this as a deficiency which must be corrected before EPA could grant
full approval to Virginia's program. This deficiency is discussed
further below in the section entitled Remaining Deficiencies.
EPA was also concerned by the fact that under Virginia's previous
rules a determination of whether or not a source is subject to the
operating permit program could be made without taking into account
emissions from units considered to be insignificant. If the total
emissions from units subject to Title V requirements were just below
the levels which would trigger Title V program applicability, failure
to take into account additional emissions from units which are exempt
could result in a source avoiding Title V requirements to which it
should have been subject. Virginia corrected this deficiency by stating
in Rule 8-5 at 9 VAC 5-80-90, and in Rule 8-7 at 9 VAC 5-80-440, that
``the emissions from any emissions unit shall be included in the permit
application if the omission of those emissions units from the
application would interfere with the determination of the applicability
of this rule, the determination or imposition of any applicable
requirement, or the calculation of permit fees,'' and by including a
similar statement in Article 4 at 9 VAC 5-80-710. Thus, EPA has
determined that Virginia has sufficiently corrected this prior
deficiency, and the Commonwealth need take no further action with
respect to it before EPA could grant full approval to Virginia's
program.
In addition, EPA was concerned by the fact that in Appendix W of
the Commonwealth's prior regulations (since redesignated as Article 4)
Virginia had defined as insignificant all pollutant emission units with
emissions less than the section 112(g) de minimis levels set forth at
40 CFR 63.44 or the accidental release threshold levels set forth at 40
CFR 68.130. See 9 VAC 5-80-720 B 6. EPA noted that these levels were
appropriate in many cases, but were too high in others. Virginia
adequately addressed this concern by adding the qualifier ``or 1000
pounds per year, whichever is less'' to the statement at 9 VAC 5-80-720
B 6.
Furthermore, while not a concern for purposes of program approval,
EPA notes that the references to emission units with emissions at or
below the section 112(g) de minimis levels established in 40 CFR 63.44
now have no meaning. See 9 VAC 5-80-720 B 5 and B 6. Virginia
apparently assumed when it prepared its regulation that EPA would
finalize the referenced list. However, EPA did not finalize this list
and there are now no emissions levels ``in 40 CFR 63.44.'' As a result,
emission units emitting hazardous air pollutants which are not 112(r)
pollutants need to be fully described in application forms. This fact
reduces the universe of units which can be considered insignificant
under Virginia's regulations, but this is not a concern with respect to
EPA's decision to approve or disapprove Virginia's program, because
part 70 does not require States to define any particular units as
insignificant.
Finally, EPA also expressed concern with the fact that in its prior
program Virginia had inappropriately included ``comfort air
conditioning'' and ``refrigeration systems,'' which are subject to
stratospheric ozone protection requirements, in the listing of
insignificant activities found in Article 4. Virginia removed these
items from
[[Page 12782]]
the list. Thus, this previous deficiency has been fully corrected.
B. Remaining Deficiencies (Interim Approval Issues)
As noted above, in its December 5, 1994 and September 19, 1995,
Federal Register notices EPA cited several other deficiencies in the
insignificant activities provisions in Virginia's submittal as another
impediment to granting full approval of the submittal. EPA stated that
Virginia would have to correct these deficiencies before EPA could
fully approve the Commonwealth's program. In this section EPA addresses
one insignificant activity related deficiency which Virginia did not
correct in its revised program, and several additional insignificant
activity related deficiencies which EPA has identified in reviewing the
Commonwealth's new program since publishing the September 1995 proposed
disapproval notice.
1. Units Emitting Up To 100 TPY of CO Inappropriately Considered to be
Insignificant
EPA remains concerned that Virginia continues to define any
emission unit emitting less than 100 TPY of carbon monoxide (CO) as
insignificant. As EPA stated in its September, 1995 proposed
disapproval notice, and as discussed previously in this notice, EPA has
determined that the 100 TPY emissions level is far too high. The
Director of the VADEQ has recently informed EPA that VADEQ will seek to
change this regulation to correct this problem. (See letter from VADEQ
Director dated February 27, 1997.) Virginia must complete this
correction before EPA can fully approve Virginia's program.
EPA does not consider this deficiency to be an impediment to
interim approval. Virginia has identified a specific provision in its
regulations that requires sources to provide emissions information in
permit applications if the omission of that information ``would
interfere with the determination of the applicability of the State's
Title V program, the determination or imposition of any applicable
requirement, or the calculation of fees.'' 9 VAC 5-80-90. See also 9
VAC 5-80-710 4. In addition, the majority of sources in Virginia which
have units emitting CO are not subject to applicable requirements for
CO. Sources that are subject to CO-related requirements are likely to
be subject to federal standards, such as new source performance
standards (NSPS), for those units, and should be aware of the specific
CO-related requirements applicable to them. Thus, in the interim period
before Virginia revises its regulations, EPA believes that the
potential for confusion caused by Virginia's 100 TPY CO threshold
should be minimized, provided the Commonwealth takes care to monitor
source compliance with applicable requirements. EPA therefore does not
believe it would be reasonable to disapprove Virginia's program due to
this deficiency. EPA's treatment of Virginia's high CO threshold is
consistent with how EPA has addressed similar problems in other States.
2. Applications Not Required to Include Sufficient Information To
Identify All Applicable Requirements for Emission Units Deemed
Insignificant
In connection with its review of Virginia's inappropriate
designation of units emitting up to 100 TPY of CO as insignificant EPA
carefully reviewed Virginia's ``gatekeeper'' provisions to determine
whether or not they might substantially address the concerns this
inappropriate designation had raised. ``Gatekeeper'' provisions are
meant to assure that all applicable requirements for units designated
as insignificant are included in both applications and permits, thereby
enabling permitting authorities, reviewing members of the public,
affected States, and EPA to adequately assess source compliance with
all applicable requirements. During the course of its review EPA
identified several deficiencies with these ``gatekeeper'' provisions.
Virginia's regulations at 9 VAC 5-80-90 D 1 now require emissions
information to be included in permit applications, even for
insignificant activities, ``if the omission of these emissions units
from the application would interfere with the determination of the
applicability of this rule, the determination or imposition of any
applicable requirement, or the calculation of permit fees.'' However,
with respect to including all applicable requirements in applications,
EPA notes that Virginia has inappropriately included a provision in the
applicability section of Rule 8-5, at 9 VAC 5-80-50 F, which states
that ``[t]he provisions of 9 VAC 5-80-90 concerning application
requirements shall not apply to insignificant activities designated in
9 VAC 5-80-720 with the exception of the requirements of 9 VAC 5-80-90
D 1 and 9 VAC 5-80-710,'' and that it has included a similar provision
in the applicability section of Rule 8-7, at 9 VAC 5-80-360 E. As a
result of these provisions, sources are required to provide only
emissions information for insignificant activities, but not any
additional information, such as that required by 9 VAC 5-80-90 D.2, E.,
or F. (which require all information necessary to determine applicable
requirements), which might be required to identify applicable
requirements when emissions information alone is not sufficient. Since
many applicable requirements under the CAA, particularly those relating
to 112(d) standards for hazardous air pollutants, could not be
identified solely by emissions information, EPA does not believe that
Virginia's existing ``gatekeeper'' provision fully meets the
requirements of Title V. Specifically, 40 CFR 70.5(c) provides that
applications ``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 approved pursuant
to Sec. 70.9 of this part.'' (emphasis added). Before EPA can fully
approve Virginia's program Virginia must assure that the requirements
of Sec. 70.5(c) will be met by appropriately revising the provisions at
9 VAC 5-80-50 F and 9 VAC 5-80-360 E.
VADEQ agrees that permit applications must include all information
required to identify applicable requirements, and has agreed to seek
revisions to Virginia's regulations in the future to ensure that
sources provide such information. In addition, VADEQ has stated that
``[u]nder the provisions of 9 VAC 5-80-90 E 1, the Board (Virginia's
Air Pollution Control Board) will require that permit applications
contain a citation and description of all applicable requirements
including those covering activities deemed insignificant under 9 VAC 5
Chapter 80, Article 4.'' (See letter from VADEQ Director dated February
27, 1997.) In light of this, EPA has determined that Virginia's program
substantially meets the requirements of Title V with respect to this
issue and that it is appropriate to grant interim approval of
Virginia's program. This is consistent with how EPA has treated similar
deficiencies in other States.
3. Permits Not Required To Include Applicable Requirements for Emission
Units Deemed Insignificant
With respect to including all applicable requirements in permits,
Virginia Rule 8-5 contains an inappropriate provision at 9 VAC 5-80-110
which states that ``For major sources subject to this rule, the board
shall include in the permit all applicable requirements for all
emission units in the major source except those deemed insignificant in
Article 4 (9 VAC 5-80-710 et. seq.) of this part.'' Virginia's Rule 8-7
(the acid rain
[[Page 12783]]
regulation) essentially repeats this deficiency at 9 VAC 5-80-490.A.1.
These provisions in Rules 8-5 and 8-7 are inadequate because they
contain the qualification ``except those deemed insignificant in
Article 4 * * *'' EPA cannot fully approve Virginia's program until
Virginia removes these qualifications.
VADEQ agrees that the change EPA calls for above is required and
has committed to seek this change. In addition, VADEQ has stated that
``In addition to the provisions of 9 VAC 110 A 1, the Board will also
include in the permit those applicable requirements covering activities
deemed insignificant under 9 VAC 5 Chapter 80, Article 4.'' (See letter
from VADEQ Director dated February 27, 1997.) Finally, Virginia's
regulations elsewhere suggest that the Commonwealth's program
inadvertently contains the deficiencies identified at 9 VAC 5-80-110
A.1 and 5-80-490 A.1. This is suggested by the fact that 9 VAC 5-80-110
B.1, 5-80-150 A.4, 5-80-490 B.1 and 5-80-510 B 4 require that permits
``specify and reference applicable emission limitations and standards,
including those [* * *] that assure compliance with all applicable
requirements'' and that permits may be issued only if ``the conditions
of the permit provide for compliance with all applicable
requirements.'' In light of this, EPA has determined that Virginia's
program substantially meets the requirements of Title V with respect to
this issue and that it is appropriate to grant interim approval of
Virginia's program. EPA's treatment of this issue is consistent with
how it has been treated in other States.
4. Emergency or Standby Compressors, Pumps, and/or Generators
Inappropriately Defined as Insignificant
EPA also notes that under 9 VAC 5-80-720 C 4 Virginia designates as
insignificant emissions units ``Internal combustion powered compressors
and pumps used for emergency replacement or standby service, operating
at 500 hours per year or less, as follows'' and then goes on to cite
emergency generators of various horsepower ratings, depending on
whether or not the generators are gasoline, diesel, or natural gas
powered. EPA believes that 9 VAC 5-80-720 C 4 is confusing in that
Virginia first defines emergency or standby compressors or pumps as
insignificant, and then further qualifies the units considered
insignificant by discussing various sizes of emergency generators.
VADEQ has agreed to seek to clarify this provision in the revised
regulations Virginia will be submitting in the future. In the interim,
VADEQ has explained to EPA that ``With regard to the provisions of 9
VAC 5-80-720 C 4 regarding the designation of certain internal
combustion powered compressors and pumps as insignificant emissions
units, the exemption levels (expressed in horsepower) for the emergency
generators refer to the size of the engines that provide the power to
the compressors and pumps.'' (See letter from VADEQ Director dated
February 27, 1997.)
EPA notes that engines of the sizes designated will likely be large
enough to trigger certain NSPS standards, e.g., 40 CFR part 60, Subpart
Dc--Standards of Performance for Small Industrial-Commercial-
Institutional Steam Generating Units, or GG--Standards of Performance
for Stationary Gas Turbines, or be major sources in and of themselves.
EPA believes that to avoid confusion any list of insignificant
activities should not contain items which may clearly be subject to
applicable requirements. Accordingly, before EPA can grant full
approval to the Commonwealth's program, Virginia must not only clarify
its insignificant activity provision for emergency pumps, compressors,
or generators, but must also reduce the horsepower size designations
sufficiently to exclude any unit which would likely trigger an
applicable requirement or emit pollutants in major amounts. It is
important to note that the major source thresholds for air pollutants
will vary depending on nonattainment designations in the Commonwealth.
For example, given that there is a serious ozone nonattainment area in
northern Virginia, the State's insignificant activities will be judged
relative to the major source thresholds of 50 tons/year for volatile
organic compounds and nitrogen oxides.
EPA took a similar position in its notice giving final interim
approval to Tennessee's program. See 61 FR 39335 (July 29, 1996). In
that notice EPA stated that ``insignificant activities lists should
avoid the potential for confusion created when an activity that is
plainly subject to an applicable requirement is included.'' 61 FR
39337. EPA required, as an interim approval item, that Tennessee
address EPA's concerns regarding the potential for confusion which
arose because certain activities and emission units were listed as
insignificant which could also be subject to applicable requirements.
EPA took similar positions when it proposed approval of West Virginia's
program at 60 FR 44799 (August 29, 1995), and then approved that
program at 60 FR 57352 (November 15, 1995), and when it proposed
approval of Florida's program at 60 FR 32292 (June 21, 1995), and then
approved that program at 60 FR 49343 (September 25, 1995).
5. ``Off-Permit Changes'' Defined as Including Changes Subject to
Requirements Under Title IV
In addition to the acid rain regulatory provisions cited above that
track flaws in Virginia's main Title V rule, EPA is concerned with two
other provisions in the Commonwealth's regulations relating to acid
rain requirements. Currently, EPA's Part 70 rule allows sources to make
certain so-called ``off-permit'' changes that are not addressed or
prohibited by the permit without obtaining a permit revision. See 40
CFR 70.4(b)(14). However, this flexibility does not extend to changes
that are modifications under Title I of the CAA or those that are
subject to any of the acid rain requirements under Title IV of the CAA.
40 CFR 70.4(b)(15). Regarding acid rain requirements, EPA stated in its
preamble to the final part 70 rule that ``the allowance trading system
provided for in Title IV will not be feasible unless there is an
accurate accounting of each source's obligations thereunder in the
Title V permit.'' 57 FR 32250, 32270 (July 21, 1992). Virginia's
regulations allowing ``off permit'' changes at 9 VAC 5-80-280.C and 5-
80-680.C fail to exclude from eligibility changes that are subject to
requirements under Title IV. For the reasons discussed in the preamble
to the final part 70 rule, EPA has determined that it cannot grant full
approval to Virginia's program until Virginia revises its regulations
to correctly exclude Title IV changes from off-permit eligibility. In
the meantime, EPA does not view this deficiency as preventing
Virginia's program from substantially meeting the requirements of Title
V. Thus, the Commonwealth's program is still eligible for interim
approval.
6. Affirmative Defense Provisions Deficient
Part 70 provides that a source may qualify for an affirmative
defense for noncompliance with a technology based emission limitation
in ``emergency'' situations if certain conditions are met. Section
70.6(g)(1) defines what kind of situations may qualify as
``emergencies,'' and Sec. 70.6(g)(3) provides, in part, that the
affirmative defense of emergency shall be demonstrated through properly
signed, contemporaneous operating logs, or other relevant evidence
that, ``(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
[[Page 12784]]
to the emergency.'' Section 70.6(g)(3) further provides that this
notice would satisfy the requirement for ``prompt'' reporting of
deviations required by Sec. 70.6(a)(3)(iii)(B).
In its program Virginia uses the term ``malfunction'' instead of
emergency. Virginia's definition of this term is consistent with how
EPA defines ``emergency.'' However, Virginia's operating permit
regulations at 9 VAC 5-80-250.B.4 and 5-80-650 provide in part that
``[f]or malfunctions that occurred for one hour or more, the permittee
submitted to the board by the deadlines established in B.4.a and B.4.b.
a notice and a written statement containing a description of the
malfunction, any steps taken to mitigate emissions, and corrective
actions taken. The notice fulfills the requirement of 9 VAC 5-80-110
F.2.b. to report promptly deviations from permit requirements.''
(emphasis added)
Virginia allows sources to claim the affirmative defense for
malfunctions which last less than one hour even when the source does
not notify the Commonwealth of the malfunction. Thus, Virginia's
affirmative defense provision is less stringent than that required
under Sec. 70.6(g), and sources may be able to shield themselves from
liability beyond what is allowed under part 70. EPA cannot grant full
approval to Virginia's program until Virginia revises its regulations
to correct this deficiency. However, EPA does not view this deficiency
as preventing Virginia's program from substantially meeting the
requirements of Title V, since it is of limited scope and Virginia's
regulations otherwise comport with Sec. 70.6(g). Thus, the
Commonwealth's program is still eligible for interim approval.
C. Other EPA Comments
1. Acid Rain Provisions
Virginia submitted Rule 8-7 to require operating permits for
sources subject to acid rain emission reduction requirements or
limitations. Except for the deficiencies discussed elsewhere in today's
notice, EPA has determined that Virginia's Rule 8-7 for acid rain
sources is acceptable.
2. Authority and Commitments for Section 112 Implementation
Section 112 of the CAA requires EPA to control hazardous air
pollutant emissions from various categories of sources by establishing
maximum achievable control technology (MACT) standards. Upon request,
EPA delegates the authority to implement and enforce section 112
requirements to State and local agencies. Virginia requested that EPA
grant Virginia ``delegation of authority upon approval of the operating
permit program for all Section 112 programs except Section 112(r),
prevention of accidental releases.'' (See the VADEQ Director's 11/12/93
letter submitting Virginia's initial request for approval of its Title
V program.) Virginia demonstrated that it has in Va. Code Sec. 10.1-
1322.A. and Rule 8-5 the broad legal authority to incorporate into
permits and to enforce applicable CAA section 112 requirements.
Virginia supplemented its broad legal authority with a commitment to
``develop the state regulatory provisions as necessary to carry out
these programs and the responsibilities under the delegation after
approval of the operating permit program and EPA has issued the
prerequisite guidance for development of these Title III programs.''
(See the VADEQ Director's 11/12/93 letter submitting Virginia's initial
request for approval of its Title V program.) (Note: States must meet
their responsibilities under the CAA and part 70 without respect to
whether or not EPA has issued ``guidance.'' Nevertheless, EPA's view is
that it has issued sufficient guidance to enable States to develop all
necessary regulatory provisions pertaining to section 112 requirements
(formerly referred to as Title III requirements). With respect to CAA
section 112(r), Virginia has the authority under section 9 VAC 5-80-90
1C to require that an applicant state that the source has complied with
CAA section section 112(r) or state in the compliance plan that the
source intends to comply and has set a schedule to do so.
When EPA has not promulgated an applicable Federal MACT emission
limitation, section 112(g) of the Clean Air Act requires the Title V
permitting authority (generally a State or local agency responsible for
the program) to determine a MACT emission limitation on a case by case
basis. On December 27, 1996, EPA promulgated regulations at 40 CFR part
63 (61 FR 68384, December 27, 1996) (the 112(g) MACT rule) implementing
certain provisions in section 112(g). The 112(g) MACT rule assures that
owners or operators of a newly constructed, reconstructed, or modified
major sources of hazardous air pollutants (HAP)(unless they are
specifically exempted) will be required to install effective pollution
controls during the period before EPA can establish a national MACT
standard for a particular industry, provided they are located in a
State with an approved Title V permit program. The rule does not
require new source MACT for modifications to existing sources.
The 112(g) MACT rule establishes requirements and procedures for
owners or operators to follow to comply with section 112(g), and
contains guidance for permitting authorities in implementing 112(g).
Section 112(g) will be in effect in a State or local jurisdiction on
the date that the permitting authority, under Title V, places its
implementing program for section 112(g) into effect. Permitting
authorities have up to 18 months from the December 27, 1996, date of
publication of the 112(g) rule to initiate implementing programs. After
the 18 month transition period, if a State or local permitting
authority is unable to initiate a section 112(g) program, there are two
options for obtaining a MACT approval: Either (1) the EPA will issue
112(g) determinations for up to one year; or (2) the permitting
authority will make 112(g) determinations according to procedures
specified at 40 CFR 63.43, and will issue a notice of MACT approval
that will become final and legally enforceable after the EPA concurs in
writing with the permitting authority's determination. Requirements for
permitting authorities are found at 40 CFR 63.42.
To place its 112(g) implementing program into effect, the chief
executive officer of the State or local jurisdiction must certify to
EPA that its program meets all the requirements set forth in the 112(g)
rule, and publish a notice stating that the program has been adopted
and specifying its effective date. The program need not be officially
reviewed or approved by EPA.
3. Deferral of Area Sources
Virginia's regulations continue to present a minor facial
inconsistency with part 70's applicability requirements with respect to
permitting of area sources which EPA wishes to clarify in advance. In
Virginia Rule 8-5, 9 VAC 5-80-50 D.1 provides that area sources subject
to requirements promulgated under section 111 or 112 of the CAA are
deferred from the obligation to obtain permits, and that the ``decision
to require a permit for these sources shall be made at the time that a
new standard is promulgated and shall be incorporated into [Virginia's
regulations] along with the listing of the new standard.''
EPA's regulations at 40 CFR 70.3(b)(2) provide that the decision to
exempt area sources that become subject to section 111 or 112 standards
adopted after July 21, 1992, will be made when such standards are
promulgated. EPA interprets this language to mean that unless the new
standard explicitly exempts area sources from Title V
[[Page 12785]]
applicability, these area sources remain subject to the permitting
requirement of CAA section 502(a) and are required to obtain permits.
EPA was initially concerned that owners and operators of these area
sources might, based on Virginia's regulations, mistakenly believe they
are not required to obtain permits either because: (1) EPA may have not
made an explicit decision whether to exempt them in setting the
relevant standard, thus resulting in no ``decision'' to require them to
obtain a permit being incorporated into Virginia's regulations at the
time the standard is incorporated; or (2) Virginia may have not yet
incorporated into its regulations the relevant standard, and its
associated implicit or explicit decision whether to exempt area
sources. Regarding the first possible reason, EPA believes that
Virginia's regulations can be reasonably interpreted to properly
require such sources to obtain permits, if Virginia's incorporation of
relevant sections 111 and 112 standards is treated as having
incorporated both any explicit decisions to exempt sources from
permitting and any explicit or implicit decisions by EPA to subject
them to the permitting requirement. The VADEQ has committed to EPA that
``In cases where EPA has promulgated a standard under section 111 or
section 112 after July 21, 1992 and failed to declare whether or not
the facility or source category covered by the standard is subject to
the Title V program or not, the Board in making decisions under 9 VAC
5-80-90 D shall presume that the facility or source category is subject
to the Title V program.'' (See letter from the Director of the VADEQ
dated February 27, 1997.) Regarding the second possible area of
confusion, Virginia's provision does not require area sources to obtain
permits, even if EPA has explicitly stated in the substantive section
111 or section 112 rulemaking that they must, unless and until Virginia
incorporates the underlying standard into its regulations. Thus, if
Virginia does not incorporate the substantive federal rules into its
regulations, the requirement for these sources to obtain a permit is
not triggered under Virginia's program. The Commonwealth has
incorporated all relevant sections 111 and 112 standards to date,
including any that extend the permitting requirement to area sources.
Thus, the potential for confusion exists only with respect to section
111 or section 112 standards EPA promulgates in the future. EPA notes
that Virginia has procedures for prompt incorporation of new federal
standards. Since EPA has no reason to believe that the Commonwealth
will not continue to timely incorporate these standards as they become
promulgated, Virginia's regulations do not in the Agency's view present
an impediment to full approval regarding this issue. EPA will, of
course, in conducting its oversight of Virginia's implementation of the
program, watch for any indication that delayed incorporation of
substantive standards results in area sources not getting permitted in
a timely manner.
4. Audit Immunity and Privilege Law
Among other minimum elements required for approval of a State
operating permits program, the CAA includes the requirement that the
permitting authority has adequate authority to assure that sources
comply with all applicable CAA requirements as well as authority to
enforce permits through recovery of certain civil penalties and
appropriate criminal penalties. Sections 502(b)(5) (A) and (E) of the
CAA. In addition, Part 70 explicitly requires States to have certain
enforcement authorities, including authority to seek injunctive relief
to enjoin a violation, to bring suit to restrain violations imposing an
imminent and substantial endangerment to public health or welfare, and
to recover appropriate criminal and civil penalties. 40 CFR 70.11.
Moreover, section 113(e) of the CAA sets forth penalty factors for EPA
or a court to consider for assessing penalties for civil and criminal
violations of Title V permits. EPA is concerned about the potential
impact of some State privilege and immunity laws on the ability of such
States to enforce federal requirements, including those under Title V
of the CAA.
Virginia has adopted legislation that would provide, subject to
certain conditions, for an environmental assessment (audit)
``privilege'' for voluntary compliance evaluations performed by a
regulated entity. The legislation further addresses the relative burden
of proof for parties either asserting the privilege or seeking
disclosure of documents for which the privilege is claimed. Virginia's
legislation also provides, subject to certain conditions, for a penalty
waiver for violations of environmental laws when a regulated entity
discovers such violations pursuant to a voluntary compliance evaluation
and voluntarily discloses such violations to the Commonwealth and takes
prompt and appropriate measures to remedy the violations.
Virginia's Voluntary Environmental Assessment Privilege, Code
Sec. 10.1-1198, provides a privilege that protects from disclosure
documents 1 and information about the content of those documents
that are the product of a voluntary environmental assessment. The
privilege does not extend to documents or information that are: (1)
Generated or developed before the commencement of a voluntary
environmental assessment; (2) that are prepared independently of the
assessment process; (3) that demonstrate a clear, imminent and
substantial danger to the public health or environment; or (4) that are
required by law. Particularly since documents required by Title V of
the Act and by part 70 are documents ``required by law,'' EPA
interprets the Commonwealth's privilege as not extending to Title V
required documents. Virginia's Office of the Attorney General has
submitted a legal opinion which supports EPA's understanding that the
Commonwealth's Title V program requirements for compliance monitoring,
reporting of violations, record keeping, and compliance certification,
together render the privilege inapplicable to compliance evaluations,
at a Title V source, of the Commonwealth's Title V requirements.
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\1\ Document is defined to include ``field notes, records of
observations, findings, opinions, suggestions, conclusions, drafts,
memoranda, drawings, photographs, videotape, computer-generated or
electronically recorded information, maps, charts, graphs and
surveys.'' Va. Code Sec. 10.1-1198.A.
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Virginia's immunity law, Va. Code Sec. 10.1-1199, provides that
``[t]o the extent consistent with requirements imposed by federal
law,'' any person making a voluntary disclosure of information to a
state agency regarding a violation of an environmental statute,
regulation, permit, or administrative order is granted immunity from
administrative or civil penalty.
The Office of the Attorney General's legal opinion states that the
phrase ``to the extent consistent with requirements imposed by federal
law'' renders this statute inapplicable to Title V enforcement. No
person can claim or be accorded immunity from any enforcement action
that involves the Commonwealth's Title V program because to do so would
be inconsistent with the requirements of Title V of the federal Clean
Air Act. Thus, the statute by its terms cannot apply to sources
operating under a Title V permit.'' Thus, EPA is not listing any
conditions on Virginia's Title V program approval for this issue
because the legislation will not preclude the Commonwealth from
enforcing its Title V permit program consistent with the CAA's
requirements.
[[Page 12786]]
5. Variance Provision
While not an issue for purposes of program approval, it should be
noted that Virginia has the authority to issue a variance from
requirements imposed by Virginia law. The variance provision at Va.
Code Sec. 10.1-1307.C. empowers the Air Pollution Control Board, after
a public hearing, to grant a local variance from any regulation adopted
by the board. EPA regards this provision as wholly external to the
program submitted for approval under Part 70, and consequently is
proposing to take no action on this provision of Virginia law. EPA has
no authority to approve provisions of State law, such as the variance
provision referred to, which are inconsistent with the CAA. EPA does
not recognize the ability of a permitting authority to grant relief
from the duty to comply with a federally enforceable permit, except
where such relief is consistent with the applicable requirements of the
CAA and is granted through procedures allowed by Part 70. EPA reserves
the right to enforce the terms of the permit where the permitting
authority purports to grant relief from the duty to comply with a
permit in a manner inconsistent with the CAA and Part 70 procedures.
6. Permit Fee Changes
EPA notes that Virginia Rule 8-6 includes a provision, at 9 VAC 5-
80-40 D. and E., which allows Virginia to assess a fee of less than $25
per ton (1989 dollars) adjusted for inflation, if Virginia determines
that it would collect more money than required to fund its Title V
program if it assessed the full $25 per ton fee (1989 dollars),
adjusted for inflation. If Virginia chooses in the future to collect a
fee of less than $25 (1989 dollars), adjusted for inflation, its fee
assessment would no longer meet the requirement for presumed adequacy
under 40 CFR 70.9. Accordingly, Virginia would trigger the requirements
under 40 CFR 70.9(b)(5) that it provide EPA with a detailed accounting
that its fee schedule meets the requirements of 40 CFR 70.9(b)(1).
Before the Commonwealth assesses a fee lower than the presumptive
minimum of $25 per ton (1989 dollars), adjusted for inflation, it must
obtain EPA approval of such a fee. EPA would approve such a fee if
Virginia submitted a detailed accounting showing that the fee would
result in the collection of sufficient funds to run a fully adequate
Title V program. This requirement for EPA approval of any fee lower
than the presumptive minimum is consistent with the requirements of 40
CFR 70.9, and is implied by 9 VAC 5-80-40 D., which states that ``Any
adjustments made to the annual permit program fee shall be made within
the constraints of 40 CFR 70.9.''
7. Title I Modifications
The EPA 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 Sec. 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 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 minor new
source review changes, the Commonwealth will need to revise its permit
regulation to be consistent with part 70.
IV. Proposed Aaction
EPA is proposing to grant interim approval to the operating permits
program submitted by Virginia, and is soliciting public comment on
whether or not such approval is appropriate. The portions of the
submittal for which EPA is proposing interim approval consist of the
operating permit and operating permit fee regulations submitted on
September 10, 1996, the acid rain operating permit regulations
submitted on September 12, 1996, and other non-regulatory
documentation. If EPA does grant such approval, Virginia will be
required to correct all of the remaining deficiencies in its program
which are discussed earlier in this notice before EPA could grant full
approval to Virginia's program. The interim approval, which would not
be renewable, would extend for a period of two years. During the
interim approval period Virginia would be protected from sanctions for
failure to have a program, and EPA would not be obligated to promulgate
a Federal permits program in the Commonwealth. Permits issued under a
program with 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 interim approval, as does the three year
time period for processing the initial permit applications.
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 proposing to grant approval under section
112(l)(5) and 40 CFR 63.91 of the State's program for receiving
delegation of section 112 standards that are unchanged from Federal
standards as promulgated. This program for delegations only applies to
sources covered by the Part 70 program.
V. Sanctions Stayed
Pursuant to section 502(d)(2)(A) of the CAA, EPA may, at its
discretion, apply any of the sanctions in section 179(b) at any time
following the effective date of a final disapproval. The available
sanctions include a prohibition on the approval by the Secretary of
Transportation of certain highway projects or the awarding of certain
federal highway funding, and a requirement that new or modified
stationary sources or emissions units for which a permit is required
under Part D of Title I of the CAA achieve an emissions reductions-to-
increases ratio of at least 2-to-1. In addition, EPA is required by
section 502(d)(2)(B) of the CAA to apply one of the sanctions in
section 179(b), as selected by the Administrator, on the date 18 months
after the effective date of a final disapproval, unless prior to that
date the State had submitted a revised operating permits program and
EPA had determined that it corrected the deficiencies that prompted the
final disapproval. Moreover, if the Administrator finds a lack of good
faith on the part of the State, both sanctions are to apply after the
expiration of the 18-month period until the Administrator determines
that the State has come into compliance. In all cases, if, six months
after EPA applies the first sanction, the State has not submitted a
revised program that EPA has determined corrects the disapproved
program's deficiencies, a second sanction is required. Finally, if EPA
has not granted full approval to the State's program by November 15,
1995, and the State's program at that point does not have interim
approval status, EPA must promulgate, administer and enforce a Federal
permits program for the State on that date.
EPA first disapproved Virginia's operating permits program in a
Federal Register notice published on December 5, 1994, which became
effective on January 5, 1995. As a result, EPA's authority to apply
discretionary
[[Page 12787]]
sanctions to Virginia arose on January 5, 1995, and the 18-month period
before which EPA is required to apply sanctions also began on that
date. EPA was required to apply the first sanction on July 5, 1996 and
the second sanction on January 5, 1997, unless by those dates EPA had
determined that Virginia had corrected each of the deficiencies that
prompted EPA's original disapproval. EPA interprets the CAA to require
the Administrator to select by rulemaking which sanction to apply
first, before mandatory sanctions may actually be imposed. These
sanctions have not been applied in Virginia because EPA has not yet
published such a rule covering deficiencies under Title V.
EPA's sanctions policy for applying sanctions for State Title V
Operating Permits Program largely follows the approach under Title I of
the Act (see 40 CFR 52.31, 59 FR 39832 (August 4, 1994). Update to
Sanctions Policy for State Title V Operating Permits Programs, John S.
Seitz, Director Office of Air Quality Planning and Standards, (March
28, 1995).
Based on this proposed approval of the Virginia Title V operating
permits program, EPA is making an interim final determination by this
action that the Commonwealth has corrected the deficiencies prompting
the original disapproval of the Virginia Title V operating permits
program. EPA has determined that it is more likely than not that the
Commonwealth has corrected the deficiencies that prompted the original
disapproval of the Virginia operating permits program. This interim
final determination will stay the implementation of sanctions unless
and until either this proposed approval is finalized or is withdrawn.
Although this action regarding sanctions is effective upon
publication, EPA will take comment on this interim final determination
as well as on EPA's proposed interim approval of the Commonwealth's
submittal. EPA will publish a final notice taking into consideration
any comments received on EPA's proposed action and this interim final
action. EPA has determined that it is appropriate to give immediate
effect to this interim final determination that Virginia has corrected
its prior disapproval deficiencies because it would not be in the
public interest to leave Virginia vulnerable to sanctions pending
finalization of the proposed approval. See, e.g., 59 FR 39832, 39838
and 39849-50 (August 4, 1994).
Today EPA is also providing the public with an opportunity to
comment on this interim final determination. If, based on any comments
on this action and any comments on EPA's proposed interim approval of
Virginia's Title V submittal, EPA determines that the Virginia's Title
V submittal is not approvable and this final action was inappropriate,
EPA will take further action to disapprove the Title V submittal. If
EPA's proposed approval of the Virginia Title V submittal is reversed,
then Virginia would remain vulnerable to sanctions under section
502(d)(2)(A) of the CAA.
VI. Administrative Requirements
A. Request for Public Comments
The EPA is requesting comments on this proposed interim approval.
Copies of the State's submittal and other information relied upon for
the proposed interim approval are contained in a docket 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 proposed interim approval. The principal
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. The EPA will consider any comments received by April
17, 1997.
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 CAA 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 significantly
impact a substantial number of small entities.
D. Federal Mandates
Under Section 202 of the Unfunded Mandates Reform Act of 1995
(''Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final action 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 consider the most cost-effective 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. This Federal
action proposes to approve Virginia's pre-existing Title V program, and
imposes no new Federal requirements. Accordingly, this action would not
impose a federal mandate which would result in additional costs for
State, local, or tribal governments, or for the private sector.
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: March 7, 1997.
W. Michael McCabe,
Regional Administrator,
Region III.
[FR Doc. 97-6826 Filed 3-17-97; 8:45 am]
BILLING CODE 6560-50-P
