[Federal Register Volume 63, Number 55 (Monday, March 23, 1998)]
[Proposed Rules]
[Pages 13811-13816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7489]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[VA-022-5022; FRL-5984-9]
Approval and Promulgation of Air Quality Implementation Plans;
Virginia; New Source Review in Nonattainment Areas
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA is proposing to grant limited approval of a State
Implementation Plan (SIP) revision submitted by the Commonwealth of
Virginia to revise its new source review (NSR) regulations for
nonattainment areas to bring them into conformance with the Clean Air
Act (CAA) amendments adopted in 1990, and to make other changes desired
by the Commonwealth. Virginia's NSR regulations for nonattainment areas
require persons to meet certain requirements before constructing a new
major source to be located in a nonattainment area, or constructing a
major modification in such an area, if that source or modification is
or would be major for the pollutant for which the area is
nonattainment. The requirements include the installation of air
pollution control technology capable of achieving the Lowest Achievable
Emission Rate (LAER), and offsetting the increase in emissions from the
new source or modification with decreases in emissions from other
sources.
DATES: Comments must be received on or before April 22, 1998.
ADDRESSES: Comments may be mailed to Kathleen Henry, Chief, Permit
Programs Section, Mailcode 3AP11, U.S. Environmental Protection Agency,
Region III, 841 Chestnut Building, Philadelphia, Pennsylvania 19107.
Copies of the documents relevant to this action are available for
public inspection during normal business hours at the Air Protection
Division, U.S. EPA, Region III, 841 Chestnut Building, Philadelphia,
Pennsylvania 19107, and the Virginia Department of Environmental
Quality, 629 East Main Street, Richmond, Virginia 23219.
FOR FURTHER INFORMATION CONTACT: Ray Chalmers, 3AT23, U.S.
Environmental Protection Agency, Region III, 841 Chestnut Building,
Philadelphia, Pennsylvania, 19107, (215) 566-2061. E-mail address:
chalmers.ray@epamail.epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Description of CAA NSR Requirements
The CAA requires that certain NSR requirements be met by any person
seeking to construct a new major source to be located in a
nonattainment area, or to construct a major modification in such an
area, if the source or modification is or would be major for the
pollutant for which the area is designated as nonattainment. The
requirements which such persons must meet include installing LAER
technology and obtaining emission offsets. Sections 172(c)(5) and 173
of the CAA require States to adopt NSR permitting regulations and to
establish NSR permitting programs to implement these requirements. When
Congress revised the CAA in 1990, it modified certain NSR requirements,
and directed States to revise their NSR regulations to incorporate
these modifications.
II. General Description of Virginia's NSR Submittal
As the CAA requires, Virginia's SIP includes a NSR regulation,
entitled ``Permits--Major Stationary Sources and Major Modifications
Locating in Nonattainment Areas,'' which specifies that new major
sources or major modifications constructed in nonattainment areas must
apply LAER and obtain emission offsets. This regulation is found in
Virginia's Regulations for the Control and Abatement of Air Pollution
at section 120-08-03. In response to the CAA revisions adopted in 1990,
Virginia submitted, on November 9, 1992, a revision to this NSR
regulation intended to update the requirements of the regulation.
The revised regulation contains, among other things, a provision
allowing the crediting of emission reductions from preapplication
shutdowns or curtailments which occurred on or after January 1, 1991,
and which are permanent, quantifiable, and federally and state
enforceable. This provision is the reason EPA is proposing only limited
approval of Virginia's revised NSR regulation, because it allows
credits for emission reductions resulting from shutting down an
existing source or curtailing production or operating hours below
baseline levels in all nonattainment areas, even those for which EPA
has not approved an attainment demonstration. This issue is discussed
in more detail later in this notice in the EPA Analysis section.
Virginia has one ozone nonattainment area. That area is Virginia's
portion of the Metropolitan Washington DC serious ozone nonattainment
area. At the time of its NSR SIP submittal, the Richmond area was
classified as moderate ozone nonattainment area, and part of the
Virginia portion of the Metropolitan Washington, D.C. area (Alexandria
City and Arlington County) was designated as nonattainment for carbon
monoxide. These two areas have since been redesignated to attainment.
The remainder of Virginia is designated as attainment and/or
unclassifiable with respect to all other criteria pollutant standards.
Under the CAA, and the Commonwealth's NSR regulation, sources of
VOC or NOX located in Virginia's serious ozone nonattainment
area are considered major if they have the potential to emit 50 TPY or
more of volatile organic compounds (VOC) or nitrogen oxides
(NOX).
III. CAA's Specific NSR Requirements
According to section 172(c)(5) of the CAA, SIPs must require that
certain NSR requirements be met by any person seeking to construct a
new major source to be located in a nonattainment area, or to make a
major modification to a major source in such an area, if the source or
modification is or would be major for the pollutant for which the area
is designated as nonattainment. There are also special statutory permit
requirements for ozone nonattainment areas, which are generally
contained in revised section 173, and in subpart 2 of part D.
[[Page 13812]]
On July 23, 1996, EPA published in the Federal Register a
comprehensive rulemaking which proposed significant changes to both the
current nonattainment NSR and the current Prevention of Significant
Deterioration (PSD) requirements. See 61 FR 38311. Upon EPA
promulgation of the final rulemaking at a later date, all states,
including Virginia, will be expected to evaluate their new source
review regulations in accordance with the new requirements and to
revise such regulations accordingly.
Important CAA requirements for new sources in nonattainment areas
are found under sections 172, 173, 182, and 184 of the CAA, and are
summarized below:
1. According to section 173(a)(1), the state regulation must assure
that calculations of emissions offsets are based on the same emissions
baseline used in the demonstration of reasonable further progress (RFP)
towards attainment.
2. According to section 173(c)(1), the state regulation may include
provisions which allow offsets to be obtained in another nonattainment
area if that area has an equal or higher nonattainment classification
and emissions from the other nonattainment area contribute to a
National Ambient Air Quality Standard (NAAQS) violation in the area in
which the source would construct.
3. According to section 173(c)(1), the state regulation must
provide that any emissions offsets obtained in conjunction with the
issuance of a permit to a new or modified source must be in effect and
enforceable by the time the new or modified source commences operation.
This statutory condition for offsets augments the existing requirement
under section 173 that provides that offsets must be federally-
enforceable before permit issuance, although the required emissions
reductions need not occur until the date on which the new or modified
source commences operations.
4. According to section 173(c)(1), provisions of the state NSR
regulation must assure that emissions increases from new or modified
sources will be offset by real reductions in actual emissions. EPA's
initial guidance interpreting general sections of the CAA is contained
in the Title I General Preamble published in the Federal Register on
April 16, 1992 (57 FR 13498). In the General Preamble, EPA reiterated
that emission increases and decreases for netting are to be determined
consistent with EPA's current new source rules and the December 4, 1986
emissions trading policy statement (51 FR 43823). EPA's new source
rules state that a decrease in emissions is only creditable if, among
other requirements, the decrease has not been relied upon by the state
for any permit, attainment demonstration, or reasonable further
progress. Therefore, emission reductions made because of reasonably
available control technology (RACT) or other requirements that have
been taken into account in the state's demonstration of reasonable
further progress or attainment demonstration are not creditable for
netting purposes.
5. According to section 173(c)(2), the state regulation must
prevent emission reductions otherwise required by the CAA from being
credited for purposes of satisfying part D offset requirements.
6. According to section 173(a)(5), the state regulation must
require that prior to any part D permit being issued there be an
analysis of alternative sites, sizes, production processes, and
environmental control techniques for proposed sources that demonstrates
that the benefits of the proposed source significantly outweigh the
environmental and social costs imposed as a result of its location,
construction, or modification.
7. According to section 328, the state regulation must assure that
sources located on the Outer Continental Shelf (OCS) are subject to the
same requirements applicable if the source were located in the
corresponding onshore area.
8. Section 173(a)(3) requires that the state regulation must assure
that owners or operators of each proposed new or modified major
stationary source demonstrate that all of their other major stationary
sources in the state are in compliance.
9. The state regulation must define major new and major modified
sources in accordance with the area's nonattainment classification
under section 181 for ozone.
10. The state regulation must require emission offsets for major
new and major modified sources in accordance with the area's
nonattainment classification under section 181 for ozone.
11. As discussed in Section 184 of the CAA, the state regulation
must require all applicable new source requirements to be met by
sources locating in the ozone transport region (OTR). These provisions
must also ensure that new or modified major stationary sources obtain
VOC and, presumptively, NOX offsets at a ratio of at least
1.15 to 1 in order to obtain a NSR permit. Higher offset ratios apply
in areas classified as serious or above.
12. The state regulation must ensure that any new or modified major
stationary source of NOx satisfies the requirements applicable to any
new or modified major stationary source of VOC, unless a special NOx
exemption is granted by the Administrator under CAA section 182(f).
13. State plans must, for serious and severe ozone nonattainment
areas, implement sections 182(c)(6), (7) and (8) with regard to
modifications.
IV. Summary of Regulatory Revisions
EPA discusses below the major changes by which Virginia has amended
its NSR regulation. These changes include changes necessary to bring
Virginia's NSR regulation into conformity with federal requirements and
other changes not required by federal mandate. Because new subsections
have been added, this SIP revision includes changes in the manner in
which the regulation is codified. Listed below are the subsections in
Virginia's regulation and the major proposed changes:
Section 120-08-03 A--Applicability (Amended)
Virginia has modified this subsection by including a provision to
deter a company from constructing or modifying a facility in increments
to avoid permit requirements. The provision states that where a source
is constructed or modified in contemporaneous increments which
individually are not subject to approval and which are not part of a
program of construction or modification in planned incremental phases
approved by the board, all such increments shall be added together for
determining applicability. It further states that an incremental change
is contemporaneous with the particular change only if it occurs between
the date five years before construction on the particular change
commences and the date that the increase from the particular change
occurs.
Section 120 08 03 B--Definitions (Amended)
Virginia has modified many of the definitions found in this
subsection. Key changes in the definitions are discussed below:
1. Allowable Emissions--Virginia modified this definition to
indicate that any limits on emissions used when calculating allowable
emissions must always be federally enforceable.
2. Building, structure, facility, or installation--Virginia
modified its former definition of ``building, structure, or facility''
by now making this a definition of ``building, structure, facility, or
installation. (Emphasis
[[Page 13813]]
added). In conjunction with this change, Virginia deleted its former
separate definition of ``installation.''
3. Federally enforceable--Virginia modified this definition to
include permits issued under an EPA approved program that is
incorporated into the SIP and expressly requires adherence to any
permit issued under such program.
4. Major Modification--Virginia made several modifications to this
definition to indicate that certain provisions or changes must always
be federally enforceable. In particular, the definition now states that
any ``physical change or change in the method of operation'' shall not
include ``[u]se of an alternative or raw material which a source was
capable of accommodating before December 21, 1976, unless the change
would be prohibited under any federally and state enforceable permit
condition * * *'' (emphasis added). In addition the definition now says
that such a change shall not include ``[a]n increase in the hours of
operation or the production rate, unless the change in the hours of
operation or the production rate would be prohibited under any
federally and state enforceable permit condition * * *'' Virginia also
deleted several items from its listing of items which do not qualify as
physical changes or changes in method of operation.
5. Major Stationary Source--Virginia revised this definition to
make its major source thresholds for sources located in ozone
nonattainment areas consistent with EPA's requirements. Virginia
specifies that a major stationary source includes not only sources
which emit, or have the potential to emit, 100 tons per year or more of
any pollutant subject to regulation under the CAA, but also sources
which emit ``50 tons per year or more of volatile organic compounds or
nitrogen oxides in nonattainment areas classified as serious in
Appendix K,'' or ``25 tons per year or more of volatile organic
compounds or nitrogen oxides in ozone nonattainment areas classified as
severe in Appendix K.'' Virginia also added to this definition a
listing of the source categories from which fugitive emissions must be
considered when determining if a source is major.
6. Net emissions increase--Virginia modified this definition to
specify when increases or decreases in actual emissions are
contemporaneous and when they are creditable.
7. Nonattainment pollutant--In this definition Virginia modified
the statement ``For ozone nonattainment areas, the nonattainment
pollutant shall be volatile organic compounds (including
hydrocarbons)'' by adding ``and nitrogen oxides.''
8. Potential to Emit--In this definition Virginia now requires
limits on potential to emit to be federally enforceable.
9. Reconstruction--In this definition Virginia removed a provision
which stated that the assessment of whether or not a reconstructed
stationary source is subject to a new source performance standard had
to take into account any economic or technical limitations on
compliance with applicable standards of performance which are inherent
in the proposed replacements.
10. Significant--Virginia includes a new provision indicating that
in serious or severe ozone nonattainment areas a 25 ton per year
increase in volatile organic compound or nitrogen oxide emissions would
be considered a significant emissions increase.
Section 120-08-03 C--General (Amended)
Virginia modified the general subsection by adding a provision
stating that it may combine in one permit the requirements for
emissions units subject to more than one of Virginia's regulatory
requirements applicable to permitting, and that Virginia may also
require a combined application for such emissions units. The permitting
requirements for which such combined permits and applications may be
required include those of Virginia's NSR regulation for sources
locating in nonattainment areas and those of two other Virginia
regulations, entitled, ``Permits--New and Modified Sources,'' and
``Permits--Major Stationary Sources and Major Modifications Locating in
Prevention of Significant Deterioration Areas.''
Section 120-08-03 D--Applications (Amended)
Virginia modified the applications subsection by revising its
specification of the scope of permit applications. Virginia also added
provisions defining who must sign permit applications and requiring the
signer to certify that ``the information submitted is, to the best of
my knowledge and belief, true, accurate, and complete.''
Section 120-08-03 F--Standards/Conditions for Granting Permits
(Amended)
Virginia made several changes in the standards and conditions
subsection, which establishes the requirements which must be met before
a permit can be issued. One major changed requirement pertains to
offsets. Virginia now requires that a permit applicant demonstrate that
``By the time the source is to commence operation, sufficient
offsetting emissions reductions shall have been obtained * * * such
that total allowable emissions of qualifying nonattainment pollutants
from existing sources in the region, from new or modified sources which
are not major emitting facilities, and from the proposed source will be
sufficiently less than total emissions from existing sources, as
determined in accordance with the requirements of this section, prior
to the application for such permit to construct or modify so as to
represent (when considered together with any applicable control
measures in the State Implementation Plan) reasonable further progress
* * *'' The only exception involves areas identified as zones where
economic development should be targeted, in which emissions of a
pollutant ``resulting from the proposed new or modified stationary
source shall not cause or contribute to emissions levels which exceed
the allowance permitted for such pollutant for such area from new or
modified major stationary sources in the State Implementation Plan.''
Virginia also added a provision requiring that any emission reductions
required as a precondition of the issuance of a NSR permit ``shall be
state and federally enforceable before such permit may be issued.''
Virginia also modified its provision requiring applicants to
demonstrate, through an analysis of alternative sites, sizes,
production processes, and environmental control techniques for the
proposed source, that the benefits of the proposed source would
significantly outweigh the environmental and social costs imposed as a
result of its location, construction, or modification.
Section 120-08-03 G--Action on Permit Application (Amended)
Virginia amended this subsection to specify that Virginia must
notify applicants in writing of deficiencies in their permit
applications. Virginia also (1) deleted certain public participation
provisions from this section which it now includes in a separate
section of the regulation; and (2) revised its description of permit
processing steps by including in the description a reference to public
participation requirements found elsewhere in the regulation.
Section 120-08-03 H--Public Participation (Added)
Virginia added a new subsection detailing public participation
requirements. This subsection requires the applicant to provide the
public with notice of its application for a permit and then, within 30
to 60 days, to provide
[[Page 13814]]
a public briefing. In addition, the subsection provides that Virginia
must provide a public comment period of at least 30 days, and hold a
public hearing, before it makes a decision on a permit application. The
Commonwealth's Board has the option of providing a public briefing
prior to the public comment period. In all cases, the public must be
provided with the opportunity to review relevant information.
Section 120-08-03 I--Compliance Determination and Verification by
Performance Testing (Amended, Formerly Designated as Section 120-08-03
H, This Section Replaces the Original Section 120-08-03 I, Which Was
Deleted)
Virginia modified this subsection by specifying that source owners
are responsible for conducting tests if any such tests are required.
Section 120-08-03 J--Application Review and Analysis (Formerly
Designated as Section 120-08-03 K, This Section Replaces the Original
Section 120-08-03 J, Which Was Deleted)
Virginia made no changes to this subsection.
Section 120-08-03 K--Circumvention (Formerly Designated as Section 120-
08-03 L)
Virginia made no changes to this subsection.
Section 120-08-03 L--Interstate Pollution Abatement (Formerly
Designated as Section 120-08-03 M)
Virginia made no changes to this subsection.
Section 120-08-03 M--Offsets (Amended, Formerly Designated as Section
120-08-03 N)
Virginia allows the crediting of emission reductions resulting from
shutting down an existing source or curtailing production or operating
hours below baseline levels if the shutdown or curtailment is in
effect, if it occurred on or after January 1, 1991, and if it is
permanent, quantifiable, and federally and state enforceable. Virginia
requires that the increased emissions of the air pollutant(s) from the
new or modified source must be offset by an equal or greater reduction
in the actual emissions of such air pollutant(s) from the same or other
sources. In the case of sources emitting ozone precursors (VOC and
NOx), the emission reductions must be greater than the
increases by certain specified ratios, which are highest in the areas
with the worst designated air quality levels. In most cases the
reductions must be obtained from the same source or from other sources
in the same nonattainment area. However, Virginia may allow reductions
in ozone precursor emissions to be obtained from sources outside the
nonattainment area if the other area has an equal or greater
nonattainment designation than the area where the source is located and
the emissions from the other area contribute to a violation of the
ambient air quality standard(s) in the area where the new or modified
source is to be located. Virginia allows reductions to be credited only
if they are not otherwise required by its regulations. Virginia does
allow incidental emission reductions to be credited, provided they are
not required by regulation and meet certain other requirements. In this
section Virginia also includes a special provision allowing increases
in emissions from rocket engine and motor firing to be offset by
alternative or innovative means.
Section 120-08-03 N--De Minimis Increases and Stationary Source
Modification Alternatives for Ozone Nonattainment Areas Classified as
Serious or Severe (Added)
Virginia specifies in this new subsection that VOC emissions
increases resulting from modifications at sources in serious or severe
ozone nonattainment areas can not be considered de minimis unless the
increase in net emissions does not exceed 25 TPY when aggregated with
all other net increases in emissions from the source over any period of
5 consecutive calendar years which includes the calendar year in which
such increase occurred.
Section 120-08-03 Q--Reactivation and Permanent Shutdown (Added)
Virginia specifies in this new subsection that a source which is
reopened after having been determined to be shutdown must obtain a
permit. Virginia also sets forth criteria by which sources are formally
determined to be shutdown.
Section 120-08-03 R--Transfer of Permits (Added)
Virginia establishes in this new subsection provisions pertaining
to transfer of permits.
Section 120-08-03 S--Permit Invalidation, Revocation, and Enforcement
(Added)
Virginia sets forth in this new subsection the conditions under
which owners of sources subject to permitting requirements may be
subject to enforcement action and when permits may be invalidated or
revoked.
Section 120-08-03 T--Existence of Permit No Defense (Added)
Virginia specifies in this new subsection that the existence of a
permit under this section shall not constitute a defense to a violation
of the Virginia Air Pollution Control Law or these regulations and
shall not relieve any owner of the responsibility to comply with any
applicable regulations, laws, ordinances and orders of the governmental
entities having jurisdiction.
V. EPA Analysis
EPA's has determined that the amendments to Virginia's NSR
regulations are consistent with the CAA and currently promulgated
federal NSR regulations with one exception. Virginia's NSR regulation
allows persons who intend to build or modify a major source in a
nonattainment area to take credit for emission reductions obtained from
shutdowns or curtailments of production or operating hours which took
place prior to the source's application for a new source review permit
(prior shutdown or curtailment credits) even if EPA has not approved an
attainment plan for the nonattainment area. Current EPA regulations,
developed prior to the CAA Amendments of 1990, provide that States
having nonattainment areas without EPA approved attainment
demonstrations may allow persons intending to build or modify sources
located in those areas to take credit for emission reductions resulting
from shutdowns or curtailments of production or operating hours only
if: (1) The reductions occurred on or after the date the new proposed
source or modification files a permit application, or, (2) if the
applicant can establish that the proposed new source is a replacement
for the shutdown or curtailed source. See 40 CFR 51.165
(a)(3)(ii)(C)(2). Thus, under current EPA regulations, states are
prohibited from crediting emission reductions which occurred prior to
the date the new proposed source or modification files a permit
application (prior shutdown or curtailment credits) unless EPA has
approved an attainment demonstration for the area. It is important to
note that Virginia's current SIP regulations do not contain this so-
called ``shutdown prohibition.''
Virginia's revised NSR regulation affirmatively allows persons
seeking to build new major sources or major modifications to take
credit for emission reductions resulting from shutdowns or
[[Page 13815]]
curtailments of production or operating hours if those shutdowns or
curtailments occurred after January 1, 1991. Because Virginia's
regulation allows persons seeking to construct new major sources or
major modifications in a nonattainment area for which EPA has not
approved an attainment plan to take credit for shutdowns or
curtailments which occurred prior to the date they filed their permit
application, Virginia's NSR regulation appears not to conform with the
existing EPA prohibition on the use of prior shutdown or curtailment
credits in nonattainment areas for which EPA has not approved an
attainment demonstration. This prohibition is found at 40 CFR
51.165(a)(3)(ii)(C)(2).
However, on July 23, 1996, EPA published in the Federal Register a
comprehensive rulemaking which proposed significant changes to the
current PSD and nonattainment NSR rules. This proposed rulemaking is
hereinafter referred to as the ``NSR Reform Rulemaking.'' See 61 FR
38311. The NSR Reform Rulemaking proposes to revise regulations for the
approval and promulgation of SIPs and the requirements for preparation,
adoption, and submittal of implementation plans governing the NSR
programs mandated by Parts C and D of Title I of the CAA. Specifically,
Section VII.A of EPA's NSR Reform Rulemaking, entitled ``Emissions
Credits Resulting From Source Shutdowns and Curtailments,'' proposes to
eliminate the current restrictions on crediting of emissions reductions
from source shutdowns and curtailments that occurred after 1990. In the
NSR Reform Rulemaking, EPA proposes two different alternatives for
eliminating the prior shutdown prohibition. The second of these
alternatives, entitled ``Shutdown Alternative 2'', generally lifts the
current offset restriction applicable to emissions reductions from
source shutdowns and source curtailments for all nonattainment areas
and all pollutants where such reductions occur after the base year of
the emissions inventory used (or to be used) to meet the applicable
provisions of Part D of the CAA. See proposed
Sec. 51.165(a)(3)(ii)(C)(5) [Alternative 2], 61 FR 38314. Under this
alternative, States could allow pre-application emission reductions
from source shutdowns or curtailments to be used as offsets in all
nonattainment areas and for all pollutants provided such reductions
occurred after the base year of the emissions inventory used by the
State to meet the applicable provisions of Part D of the CAA.
As explained above, Virginia's NSR rule allows sources to take
credit for emissions reductions from shutdowns or curtailments of
production or operating hours which occurred after January 1, 1991.
This is consistent with Alternative 2 of EPA's NSR Reform Rulemaking,
which credits only those emissions reductions from source shutdowns and
curtailments occurring after 1990, i.e., the base year of the emissions
inventory used to meet the applicable provisions of Part D of the CAA.
Thus, EPA believes that Virginia's NSR regulation is generally
consistent with ``Shutdown Alternative 2'' as described in EPA's
proposed NSR Reform Rulemaking, because both Virginia's rule and
Alternative 2 allow sources to take credit only from emission
reductions or curtailments occurring after January 1, 1991.
Because Virginia's NSR regulation is generally consistent with
Alternative 2 of EPA's proposed NSR Reform Rulemaking (as discussed
above), and because approval of the revised version of Virginia's NSR
regulation submitted on November 9, 1992 would strengthen the SIP to be
consistent with the CAA's provisions for NSR, EPA believes that
Virginia's revised NSR regulation warrants limited approval. If EPA
promulgates Alternative 2, this limited approval of Virginia's NSR
regulations would convert to a full approval.
The alternative shutdown related provision set forth in EPA's NSR
Reform Rulemaking proposal is entitled ``Shutdown Alternative 1.'' This
alternative proposes, for ozone nonattainment areas, to lift the
current offset restriction applicable to emissions reductions from
source shutdowns and curtailments in such areas without EPA-approved
attainment demonstrations, provided the emissions reductions occur
after November 15, 1990 and the area has kept current with the CAA's
scheduled Part D ozone nonattainment planning requirements. See
proposed Sec. 51.165(a)(3)(ii)(C)(5) and (6) [Alternative 1].
EPA acknowledges that either Alternative 1 or 2 may be eventually
incorporated into the final NSR Reform Rulemaking upon its final
promulgation. It is also noted that while EPA is with this rulemaking
proposing to grant limited approval of Virginia's NSR regulation based
on the rule's consistency with Shutdown Alternative 2 in EPA's NSR
Reform rulemaking, the Commonwealth may need to amend its NSR
regulation if Shutdown Alternative 1 rather than Shutdown Alternative 2
is promulgated. If Alternative 1 is promulgated, EPA would determine
the status of Virginia's conformance with Part D ozone planning
requirements for any nonattainment area. If Virginia's SIP were not
current with the Part D ozone planning requirements for any
nonattainment area, EPA would make a SIP call for Virginia to amend its
NSR rule to conform with Alternative 1 as provided in EPA's final NSR
Reform Rulemaking.
Virginia's regulation does not state that any emission reductions
must also have occurred after the base year of the emissions inventory
used (or to be used) to meet the applicable provisions of Part D of the
CAA. If an area in Virginia is designated as a new nonattainment area
in the future, the baseline year of the inventory used in the
attainment demonstration for that area would likely be after the
January 1, 1991 baseline year used for areas designated as
nonattainment at the time of the 1990 CAA amendments. Because Virginia
does not state in its NSR regulation that any emission reductions must
also have occurred after the base year of the emissions inventory used
(or to be used) to meet the applicable provisions of Part D of the CAA,
Virginia would have to modify its NSR rule if, in the future, Virginia
is required to do a new attainment demonstration because a new area in
Virginia is designated as nonattainment or a current nonattainment area
fails to meet its statutory attainment deadline.
After making its NSR submittal to EPA on November 9, 1992, in 1995
Virginia adopted legislation that provides, 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 law, Va. Code section 10.1-1198, provides a
privilege that protects from disclosure documents 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
[[Page 13816]]
demonstrate a clear, imminent and substantial danger to the public
health or environment; or (4) that are required by law.
On December 29, 1997, the Office of the Attorney General provided a
legal opinion that states, with regard to the Privilege law: Virginia's
Immunity law, Va. Code section 10.1-1199, provides that ``[t]o the
extent consistent with requirements imposed by federal law,'' (emphasis
added) 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. Thus, EPA has determined that
Virginia's Privilege and Immunity legislation will not preclude the
Commonwealth from enforcing its NSR program consistent with the CAA's
requirements.
VI. Proposed Action
EPA is proposing limited approval of the revisions to the Virginia
SIP NSR regulations submitted on November 9, 1992 because such approval
would strengthen the SIP so that it meets the NSR requirements of the
CAA as discussed herein. EPA is soliciting public comments on the
issues discussed in this document or on other relevant matters. These
comments will be considered before taking final action. Interested
parties may participate in the Federal rulemaking procedure by
submitting written comments to the EPA Regional office listed in the
ADDRESSES section of this document. Nothing in this action should be
construed as permitting or allowing or establishing a precedent for any
future request for revision to any state implementation plan. Each
request for revision to the state implementation plan shall be
considered separately in light of specific technical, economic, and
environmental factors and in relation to relevant statutory and
regulatory requirements.
VII. Administrative Requirements
A. Executive Order 12866
The Office of Management and Budget (OMB) has exempted this
regulatory action from E.O. 12866 review.
B. Regulatory Flexibility Act
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA
must prepare a regulatory flexibility analysis assessing the impact of
any proposed or final rule on small entities. 5 U.S.C. 603 and 604.
Alternatively, EPA may certify that the rule will not have a
significant impact on a substantial number of small entities. Small
entities include small businesses, small not-for-profit enterprises,
and government entities with jurisdiction over populations of less than
50,000. SIP approvals under section 110 and subchapter I, part D of the
Clean Air Act do not create any new requirements but simply approve
requirements that the State is already imposing. Therefore, because the
Federal SIP approval does not impose any new requirements, EPA
certifies that it does not have a significant impact on any small
entities affected. Moreover, due to the nature of the Federal-State
relationship under the CAA, preparation of a flexibility analysis would
constitute Federal inquiry into the economic reasonableness of state
action. The Clean Air Act forbids EPA to base its actions concerning
SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246,
255-66 (1976); 42 U.S.C. 7410(a)(2).
C. Unfunded 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 rule that includes a Federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate; or to
private sector, of $100 million or more. Under Section 205, EPA must
select 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. EPA has determined that the approval
action proposed does not include a Federal mandate that may result in
estimated costs of $100 million or more to either state, local, or
tribal governments in the aggregate, or to the private sector. This
Federal action approves pre-existing requirements under State or local
law, and imposes no new requirements. Accordingly, no additional costs
to state, local, or tribal governments, or to the private sector,
result from this action.
The Administrator's decision to approve or disapprove Virginia's
NSR SIP revision will be based on whether it meets the requirements of
section 110(a)(2)(A)-(K) and part D of the Clean Air Act, as amended,
and EPA regulations in 40 CFR part 51.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Hydrocarbons,
Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and
recordkeeping requirements.
Authority: 42 U.S.C. 7401-7671q.
Dated: March 9, 1998.
W. Michael McCabe,
Regional Administrator, Region III.
[FR Doc. 98-7489 Filed 3-20-98; 8:45 am]
BILLING CODE 6560-50-P
