The Mediterranean fruit fly, Ceratitis capitata (Wiedemann), is one of the world's most destructive pests of numerous fruits and vegetables. The Mediterranean fruit fly (Medfly) can cause serious economic losses. Heavy infestations can cause complete loss of crops, and losses of 25 to 50 percent are not uncommon. The short life cycle of this pest permits the rapid development of serious outbreaks.

The Mediterranean fruit fly regulations contained in 7 CFR 301.78 through 301.78-10 (referred to below as the regulations) restrict the interstate movement of regulated articles from quarantined areas to prevent the spread of Medfly to noninfested areas of the United States. Recent trapping surveys by inspectors of California State and county agencies and by inspectors of the Animal and Plant Health Inspection Service (APHIS) have revealed that an infestation of Medfly has occurred in the Hyde Park area of Los Angeles County, CA.

The regulations in § 301.78-3 provide that the Administrator of APHIS will list as a quarantined area each State, or each portion of a State, in which the Medfly has been found by an inspector, in which the Administrator has reason to believe that the Medfly is present, or that the Administrator considers necessary to regulate because of its inseparability for quarantine enforcement purposes from localities in which the Medfly has been found.

Less than an entire State will be designated as a quarantined area only if the Administrator determines that the State has adopted and is enforcing restrictions on the intrastate movement of regulated articles that are equivalent to those imposed on the interstate movement of regulated articles, and the designation of less than the entire State as a quarantined area will prevent the interstate spread of the Medfly. The boundary lines for a portion of a State being designated as quarantined are set up approximately four-and-one-half miles from the detection sites. The boundary lines may vary due to factors such as the location of Medfly host material, the location of transportation centers such as bus stations and airports, the patterns of persons moving in that State, the number and patterns of distribution of the Medfly, and the use of clearly identifiable lines for the boundaries.

In accordance with these criteria and the recent Medfly findings described above, we are amending § 301.78-3 by adding a portion of Los Angeles County, CA, to the list of quarantined areas. The new quarantined area is described in the rule portion of this document.

This rulemaking is necessary on an emergency basis to prevent the Medfly from spreading to noninfested areas of the United States. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the Federal Register .

We will consider comments that are received within 60 days of publication of this rule in the Federal Register . After the comment period closes, we will publish another document in the Federal Register . The document will include a discussion of any comments we receive and any amendments we are making to the rule as a result of the comments.

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review process required by Executive Order 12866.

In accordance with 5 U.S.C. 603, we have performed an initial regulatory flexibility analysis, which is set out below, regarding the effects of this interim rule on small entities. We do not currently have all the data necessary for a comprehensive analysis of the effects of this interim rule on small entities. Therefore, we are inviting comments concerning potential effects. In particular, we are interested in determining the number and kind of small entities that may incur benefits or costs from the implementation of this interim rule.

Under the Plant Protection Act (7 U.S.C. 7701-7772), the Secretary of Agriculture is authorized to regulate the interstate movement of articles to prevent the spread of injurious plant pests in the United States.

This interim rule amends the Medfly regulations by adding a portion of Los Angeles County, CA, to the list of quarantined areas. This action is necessary on an emergency basis to prevent the spread of the Medfly into noninfested areas of the United States.

This rule restricts the interstate movement of regulated articles from the newly quarantined area. The portion of Los Angeles County, CA, subject to quarantine under this rule is a predominantly residential area with many apartment buildings. Available information indicates that there are no entities in the quarantined area that sell, process, handle, or move regulated articles. Such entities would include fruit sellers, nurseries, growers, packinghouses, certified farmer's markets, and swapmeets.

The alternative to this interim rule was to make no changes in the regulations. After consideration, we rejected this alternative because if no action was taken, the Medfly would spread to noninfested areas of the continental United States.

This interim rule contains no information collection or recordkeeping requirements.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

An environmental assessment and finding of no significant impact have been prepared for this interim rule. The site-specific environmental assessment and programmatic Medfly environmental impact statement provide a basis for our conclusion that the implementation of integrated pest management to achieve eradication of the Medfly would not have a significant impact on human health or the natural environment. Based on the finding of no significant impact, the Administrator of the Animal and Plant Health Inspection Service has determined that an environmental impact statement need not be prepared.

The environmental assessment and finding of no significant impact were prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq. ), (2) regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA Implementing Procedures (7 CFR part 372).

Copies of the environmental assessment and finding of no significant impact are available for public inspection at USDA, room 1141, South Building, 14th Street and Independence Avenue SW., Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday, except holidays. Persons wishing to inspect copies are requested to call ahead on (202) 690-2817 to facilitate entry into the reading room. In addition, copies may be obtained by writing to the individual listed under FOR FURTHER INFORMATION CONTACT or viewed on the Internet at http://www.aphis.usda.gov/ppd/es/ppq/hydepkea.pdf.

This interim rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

Accordingly, we are amending 7 CFR part 301 as follows:

The Department of Agriculture (Department) is issuing this rule in conformance with Executive Order 12866. This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 11 of the Act provides that nothing in the Act may be construed to preempt or supersede any other program relating to beef promotion organized and operated under the laws of the United States or any State. There are no administrative proceedings that must be exhausted prior to any judicial challenge to the provisions of this rule.

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 United States Code (U.S.C.) 601 et seq. ). The Administrator of AMS has considered the economic effect of this action on small entities and has determined that this proposed rule will not have a significant economic impact on a substantial number of small entities. The purpose of RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly burdened.

In the January 26, 2001, issue of “Cattle,” the Department's National Agricultural Statistics Service (NASS) estimates that in 2000 the number of cattle operations in the United States totaled about 1.1 million. The majority of these operations subject to the Order, 7 CFR 1260.101 et seq. , are considered small businesses under the criteria established by the Small Business Administration.

The proposed rule imposes no new burden on the industry. It only adjusts representation on the Board to reflect changes in domestic cattle inventory and cattle and beef imports. This action would adjust representation on the Board, established under the Act. The adjustments are required by the Order and would result in a decrease in Board membership from 110 to 108.

The Board was initially appointed August 4, 1986, pursuant to the provisions of the Act (7 U.S.C. 2901 et seq. ) and the Order issued thereunder. Domestic representation on the Board is based on cattle inventory numbers, and importer representation is based on the conversion of the volume of imported cattle, beef, or beef products into live animal equivalencies.

Section 1260.141(b) of the Order provides that the Board shall be composed of cattle producers and importers appointed by the Secretary from nominations submitted by certified producer organizations. A producer may only be nominated to represent the unit in which that producer is a resident.

Section 1260.141(c) of the Order provides that at least every 3 years and not more than every 2 years, the Board shall review the geographic distribution of cattle inventories throughout the United States and the volume of imported cattle, beef, and beef products and, if warranted, shall reapportion units and/or modify the number of Board members from units in order to reflect the geographic distribution of cattle production volume in the United States and the volume of cattle, beef, or beef products imported into the United States.

Section 1260.141(d) of the Order authorizes the Board to recommend to the Secretary modifications in the number of cattle per unit necessary for representation on the Board.

Section 1260.141(e)(1) provides that each geographic unit or State that includes a total cattle inventory equal to or greater than 500,000 head of cattle shall be entitled to one representative on the Board. Section 1260.141(e)(2) provides that States that do not have total cattle inventories equal to or greater than 500,000 head shall be grouped, to the extent practicable, into geographically-contiguous units, each of which have a combined total inventory of not less than 500,000 head. Such grouped units are entitled to at least one representative on the Board. Each unit that has an additional one million head of cattle within a unit qualifies for additional representation on the Board as provided in § 1260.141(e)(4). As provided in § 1260.141(e)(3), importers are represented by a single unit, with the number of Board members based on a conversion of the total volume of imported cattle, beef, or beef products into live animal equivalencies.

The initial Board appointed in 1986 was composed of 113 members. Reapportionment based on a 3-year average of cattle inventory numbers and import data, reduced the Board to 111 members in 1990 and 107 members in 1993 before the Board was increased to 111 members in 1996. The Board was decreased to 110 members in 1999 and will be decreased to 108 members with appointments for terms effective early in 2003.

The current Board representation by States or units has been based on an average of the January 1, 1996, 1997, and 1998 inventory of cattle in the various States as reported by NASS of the Department. Current importer representation has been based on a combined total average of the 1995, 1996, and 1997 live cattle imports as published by the Foreign Agricultural Service of the Department and the average of the 1995, 1996, and 1997 live animal equivalents for imported beef products.

Recommendations concerning Board reapportionment were approved by the Board at its August 9, 2001, meeting. In considering reapportionment, the Board reviewed cattle inventories as well as cattle, beef, and beef product import data for the period January 1, 1998, to January 1, 2001. The Board recommended that a 3-year average of cattle inventories and import numbers should be continued. The Board determined that an average of the January 1, 1999, 2000, and 2001 Department cattle inventory numbers would best reflect the number of cattle in each State or unit since publication of the 1999 reapportionment rule.

The Board reviewed the February 28, 2001, Department's Economic Research Service circular, “Livestock, Dairy and Poultry Situation and Outlook,” to determine proper importer representation. The Board recommended the use of a combined total of the average of the 1998, 1999, and 2000 cattle import data and the average of the 1998, 1999, and 2000 live animal equivalents for imported beef products. The method used to calculate the total number of live cattle equivalents was the same as that used in the previous reapportionment of the Board. The recommendation for importer representation is based on the most recent 3-year average of data available to the Board at its August 9, 2001, meeting to be consistent with the procedures used for domestic representation.

The Board's recommended reapportionment plan would decrease the number of representatives on the Board from 110 to 108. Five States—Alabama, Illinois, Kentucky, New York, and Wisconsin—lose one member each; two States and one unit—New Mexico, Wyoming, and Importer unit—gain one member each. In addition, because South Carolina no longer has sufficient cattle inventory to qualify for a position on the Board independently, the Board proposes that South Carolina be merged with Georgia, a contiguous State that has only one member, to form a Southeast unit. The combined cattle inventory of South Carolina and Georgia would entitle the Southeast unit to two members on the Board, thus enabling both States to be represented. The States and units affected by the reapportionment plan and the current and proposed member representation per unit are as follows: (Units are listed with the State makeup recommended by the Board.)

The 2001 nomination and appointment process was in progress while the Board was developing its recommendations. Thus, the Board reapportionment as proposed by this rulemaking would be effective, if adopted, with 2002 nominations and appointments that will be effective early in the year 2003.

For reasons set forth in the preamble, it is proposed that 7 CFR part 1260 be amended as follows:

The Department of Agriculture (Department) is proposing this rule in conformance with Executive Order 12866. This rule has been determined not to be significant and, therefore, has not been reviewed by OMB.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have a retroactive effect. Section 11 of the Act provides that nothing in the Act may be construed to preempt or supersede any other program relating to beef promotion organized and operated under the laws of the United States or any State. There are no administrative proceedings that must be exhausted prior to any judicial challenge to the provisions of this rule.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA)(5 U.S.C. 601 et seq. ), the Administrator of AMS has considered the economic effect of this action on small entities and has determined that this proposed rule will not have a significant economic impact on a substantial number of small business entities. The purpose of RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly burdened.

The Department's National Agricultural Statistics Service estimates that in calendar year 2000 the number of cattle operations in the United States totaled approximately 1.1 million, including feedlot operations. There are also 45 QSBCs in the United States. The majority of these operations are considered small businesses under the criteria established by the Small Business Administration.

The proposed rule imposes no significant burden on the industry as it merely gives producers the opportunity to voluntarily pay the $1-per-head assessment on cattle of their own production prior to sale and to remit the assessments to the QSBC located in the producer's State of residence.

The impact on QSBCs would be a redistribution of an estimated maximum of one-half million dollars of the $40 million currently retained annually in total by the 45 QSBCs. The agency estimates that up to 6 million head or 20 percent of the approximately 30 million head of steers and heifers slaughtered annually are sold for slaughter under retained ownership. The agency also estimates that assessments on up to one-sixth of the cattle (1 million head) would be paid in advance to QSBCs. If the $1 assessment were paid in advance to QSBCs on these cattle, the QSBCs' 50 percent share of up to $1 million in assessments or as much as $500,000 would be redistributed among the QSBCs.

The major cattle feeding States of Texas, Nebraska, Kansas, Colorado, and Oklahoma could reasonably be expected to account for up to 80 percent of the $500,000 in reduced revenue to QSBCs annually. These States collect an average of $8 million annually and retain one-half that amount or $4 million. Assuming that the revenue to each of these five States available for State directed programs was reduced by an average of $80,000, it would represent a 2-percent decrease in the average revenue available for State directed programs in these States.

The remaining 40 QSBCs have annual State budgets that average about $500,000. An estimated net increase in annual income for these States, as a result of the advance payment of assessments, could average up to $10,000 per State representing a 2-percent increase.

Producers wishing to direct payment of assessments to the QSBC in the producers' State of residence when cattle are sent to another State for feeding under retained ownership would complete a form which would be provided to affected parties including the QSBC, the feedlot, and the packer or the collecting person.

Copies of the completed “Certification of Producer Directed Payment of Cattle Assessments” form shall be maintained on file by the producer, the QSBC or the Board, the feedlot operator, and the purchaser of the cattle for 2 years.

We estimate the average cost of the reporting burden per respondent would be $16 annually.

We estimate the total average cost of the recordkeeper burden per recordkeeper would be $8 annually.

The Administrator of AMS has considered the economic effect of this action on small entities and has determined that this proposed rule will not have a significant economic impact on a substantial number of small entities.

In compliance with OMB regulations [5 CFR part 1320] which implements PRA, the information collection requirements contained in this proposed rule are being submitted for OMB approval.

Title: Certification of Producer Directed Payment of Assessments.

OMB Number: 0581-New collection.

Expiration Date of Approval: 3 years from date of approval.

Type of Request: Approval of new information collection.

Abstract: The Act provides for a program of promotion, research, consumer information, and industry information funded by assessments paid by beef producers each time cattle are sold and by importers of cattle and beef products upon importation.

Assessments on cattle and beef imports are collected by the U.S. Customs Service at the rate of $1 per head or the equivalent. An assessment of $1 per head is due from the producer each time a producer sells cattle in the United States. The assessment is to be collected by the purchaser or other “collecting person” as provided in the rules and regulations. The producer assessments are then remitted to QSBCs in 45 States and to the Cattlemen's Beef Promotion and Research Board (Board) in the remaining States. QSBCs retain one-half of the $1 assessment for use in State directed programs and forward the other half to the Board.

Currently, QSBCs in the traditional cattle feeding States (e.g., Texas, Kansas, Nebraska, Oklahoma, and Colorado) collect and retain assessments on cattle sold that are owned by producers residing in other States. This benefits QSBCs in the States that have large numbers of cattle in feedlots owned by producers residing in other States. Some producers retain ownership of cattle and transport them to one of the cattle feeding States. To provide producers with more flexibility and to provide the opportunity for a more equitable distribution of assessment funds to States based on cattle ownership, the proposed “Certification of Producer Directed Payment of Cattle Assessments” form would be made available for use by producers who want the QSBC located in their States of residence to receive assessment funds rather than the QSBC in the State where the cattle are fed.

1. Certification of Producer Directed Payment of Assessments.

Estimate of Burden: The public reporting burden for this collection of information is estimated to average .20 hour per response.

Respondents: Producers wishing to direct payment of assessments to the QSBC in the producers' State of residence when cattle are sent to another State for feeding under retained ownership would use the form.

Estimated Number of Respondents: 1,000.

Estimated Number of Responses per Respondent: 4.

Estimated Total Annual Burden on Respondents: 800 hours.

Total cost: $16,000.

2. Maintenance of records: 2 years.

Estimate of Burden: The public recordkeeping burden for keeping this document is estimated to average .10 hour per recordkeeper.

Recordkeepers: Producers, QSBCs, feedlot operators, and purchasers.

Estimated Number of Recordkeepers: 1,260.

Estimated Total Recordkeeping Hours: 504 hours.

Estimated Total Cost: $10,080.

The total average cost of the estimated annual reporting burden per respondent would be: $16.00.

The total average cost of the recordkeeping burden per recordkeeper would be: $8.00.

Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments concerning the information collection and recordkeeping requirements contained in this action should reference the Docket Number LS-99-20, together with the date and page number of this issue of the Federal Register . Comments may be sent to Ralph L. Tapp, Chief; Marketing Programs Branch, Room 2627-S; Livestock and Seed Program, AMS, USDA; STOP 0251; 1400 Independence Avenue, SW.; Washington, DC 20250-0251; telephone: 202/720-1115 or Fax: 202/720-1125. All comments received will be available for public inspection during regular business hours at the above address. Comments also should be sent to the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503.

This proposed rule would amend the rules and regulations published in the Federal Register on February 26, 1988 (53 FR 5749) (7 CFR § 1260.301 to § 1260.315). These regulations further define the requirements of the Beef Promotion and Research Order (Order) (51 FR 21632) (7 CFR § 1260.101 to § 1260.217) under the Beef Promotion and Research Act of 1985 (Act), 7 U.S.C. 2901-2911.

The Act authorizes the establishment of a national beef promotion and research program. The final Order establishing a beef promotion and research program was published in the Federal Register on July 18, 1986, (51 FR 21632) and assessments began on October 1, 1986. The program is administered by the Board which is composed of 110 cattle producers and importers. The program is funded by a $1-per-head assessment on producer marketings of cattle in the United States and an equivalent amount on imported cattle, beef, and beef products. In 45 States, QSBCs receive the $1-per-head of cattle assessment remitted under the program and retain up to half of the $1 for State-directed programs and remit the remainder to the Board. The Board receives all import assessments and all producer assessments in the five States with relatively small cattle numbers that do not have QSBCs. In 2000, the 45 QSBCs received a total of about $80 million in assessments. QSBCs retained about $40 million and remitted approximately $40 million to the Board.

The domestic assessment, due each time cattle are sold by a producer, is collected by the buyer or “collecting person” and remitted to the Board or QSBC. The term “producer” is defined as follows: “means any person who owns or acquires ownership of cattle; provided, however, that a person shall not be considered a producer within the meaning of this subpart if (a) the person's only share in the proceeds of a sale of cattle or beef is a sales commission, handling fee, or other service fee; or (b) the person (1) acquired ownership of cattle to facilitate the transfer of ownership of such cattle from the seller to a third-party, (2) resold such cattle no later than 10 days from the date on which the person acquired ownership, and (3) certified, as required by regulations prescribed by the Board and approved by the Secretary, that the requirements of this provision have been satisfied.”

When cattle are sold within 10 days of purchase by a person who is not a producer under the above definition, the collecting person is not required to collect the $1 assessment from the person (seller), if the seller provides the collecting person with a Statement of Certification of Non-Producer Status on a form approved by the Board and the Secretary. The person claiming non-producer status must submit to the collecting person a Statement of Certification of Non-Producer Status “at the time of sale” in lieu of paying the assessment.

In a similar fashion this proposed modification to the regulations to permit producer directed payment of assessments would result in the collecting person, at the time of sale, collecting a document certifying the assessment had been paid in advance by the producer.

It is believed that this producer directed payment option would be used by producers of a relatively small share of all cattle sold. It would apply only to cattle of a producer's own production transported to another State under retained ownership for feeding prior to sale as slaughter cattle. Utilizing this option would permit a producer who retains ownership of cattle to ensure that the QSBC located in the State where the producer resides receives the $1 checkoff rather than the QSBC in the State in which the cattle are located when sold. This could increase checkoff revenue for many QSBCs such as those located in the southeastern United States that currently do not receive revenue from cattle owned and sold by producers residing in the southeastern States who use feedlots in States such as Texas, Kansas, Nebraska, Oklahoma, and Colorado to finish cattle before selling the cattle to packers.

Since States retain one-half of the $1-per-head checkoff for use in State directed programs, providing producers with the flexibility and the opportunity to direct payment of the assessment to their home State likely would increase revenue in many States such as Florida, Georgia, Alabama, and Mississippi with limited feedlot capacity.

The Department estimates that a maximum of $500,000 of the total $40 million currently retained annually by the 45 QSBCs would be redirected to States that currently do not receive revenue from cattle owned and sold by their producers. Approximately 6 million head, or 20 percent, of the estimated 30 million head of steers and heifers slaughtered annually are sold for slaughter under retained ownership. The Department estimates that assessments on up to one-sixth of the cattle (1 million head) would be paid in advance under this proposal to QSBCs.

The major cattle feeding States of Texas, Nebraska, Kansas, Colorado, and Oklahoma could reasonably be expected to account for up to 80 percent of the $500,000 in reduced revenue to QSBCs annually. These States collect an average of $8 million annually and retain one-half that amount or $4 million. Assuming that the revenue to each of these five States available for State directed programs was reduced by an average of $80,000, it would represent a 2-percent decrease in the average revenue available for State directed programs in these States.

The remaining 40 QSBCs have annual State budgets that average about $500,000. An estimated net increase in annual income for these States, as a result of the advance payment of assessments, could average up to $10,000 per State representing a 2-percent increase.

Producers desiring to direct payment of assessments could do so subject to the requirements of a new paragraph § 1260.311(f) which would read as follows:

“(f)(1) A producer who transports, prior to sale, cattle of that producer's own production to another State, may elect to make a directed payment of the $1-per-head assessment in advance to the QSBC in the State in which the producer resides, or to the Board if there is no QSBC in such State, provided that the producer fulfills the requirements set forth below:

(i) transports the cattle under retained ownership to a feedlot or similar location, and the cattle remain at such location, prior to sale, for a period not less than 30 days; and

(ii) the producer, at the time of transport, signs a Certification of Producer Directed Payment of Cattle Assessments form indicating that the assessment has been paid in advance. A copy of the certification form establishing the payment of the assessment shall be sent by the producer with the assessment when remitted to the QSBC or the Board. The producer also shall send a copy of the certification form to the feedlot operator at the time the cattle are delivered. A copy of the certification form also shall be given to the purchaser of the cattle by the feedlot operator at the time of sale.

(2) The certification form will include the following information:

1. Producer's Name.

2. Producer's social security number or Tax I.D. number.

3. Producer's address (street address or P.O. Box, city, State, and zip code).

4. Signature of Producer.

5. Producer's State of residence.

6. Number of cattle shipped to out of State feedyard under retained ownership.

7. Date cattle shipped.

8. State where cattle will be on feed.

9. Name of feedyard.

10. Address of feedyard.

(3) For those cattle for which the assessment has been producer directed and paid in advance pursuant to subparagraph (1) above, the purchaser of the cattle shall not be required to collect and remit the assessment, but shall maintain on file a copy of the Certification of Producer Directed Payment of Cattle Assessments form completed and signed by the producer who originally transported the cattle under retained ownership.

(4) For those cattle for which the assessment has been producer directed and paid in advance pursuant to subparagraph (1) above, copies of the completed Certification of Producer Directed Payment of Cattle Assessments form shall be maintained on file by the producer, the QSBC or the Board, the feedlot operator, and the purchaser of the cattle for 2 years.”

For the reasons set forth in the preamble, it is proposed that title 7 of the CFR part 1260 be amended as follows:

Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this action may be changed in light of the comments received.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2001-NE-20-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, New England Region, Office of the Regional Counsel, Attention: Rules Docket No. 2001-NE-20-AD, 12 New England Executive Park, Burlington, MA 01803-5299.

The FAA has received three reports of uncontained failures of air turbine starters that resulted in cowl damage. A number of air turbine starters have been damaged by running without oil. Investigations of the incidents have shown that over torque of the magnetic drain plug, P/N 572-510-9004, can result in the failure of the plug, which can allow oil to drain from the starter housing. Failure of the plug may not be immediately evident when it is over torqued. Replacement of the existing magnetic drain plug, P/N 572-510-9004, with a new redesigned magnetic drain plug, P/N 572-8510-9152, would reduce the potential for oil loss from the turbine starter if the plug is inadvertently over torqued, and would prevent uncontained failure of the starter due to loss of oil and possible damage to the airplane.

The FAA has reviewed and approved the technical contents of Honeywell Service Bulletin 3505582-80-1706, dated March 8, 2000, that describes procedures for replacing magnetic drain plugs, P/N 572-510-9004 and packings, P/N S9413-555, with new redesigned drain plugs P/N 572-8510-9152, and packings, P/N S3225-905; and re- marking the air turbine engine starter with a new P/N.

Since an unsafe condition has been identified that is likely to exist or develop on other CFMI CFM56-5 series turbofan engines of the same type design, with Honeywell Engines & Systems air turbine engine starters, P/N's 3505582-2, 3505582-3, 3505582-4, 3505582-12, 3505582-14, 3505582-15, 3505582-22, and 3505582-23, installed, the proposed AD would require the following actions within 500 cycles-in-service after the effective date of the proposed AD:

• Replacement of magnetic drain plug, P/N 572-510-9004, with a new redesigned magnetic drain plug, P/N 572-8510-9152.

• Replacement of packing, P/N 39413-555, with packing, P/N S3225-905.

• Re-marking of the air turbine engine starter after replacement of the magnetic drain plug.

The FAA estimates that about 512 engines installed on airplanes of U.S. registry would be affected by this proposed AD. The FAA also estimates that it would take approximately 0.1 work hours per engine to accomplish the proposed actions, and that the average labor rate is $60 per work hour. Required parts would cost approximately $787 per engine. Based on these figures, the total cost impact of the proposed AD on U.S. operators is estimated to be $406,016.

This proposed rule does not have federalism implications, as defined in Executive Order 13132, because it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the FAA has not consulted with state authorities prior to publication of this proposed rule.

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify the airspace docket number and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Nos. FAA-2001-10286/Airspace Docket No. 01-AEA-11.” The postcard will be date/time stamped and returned to the commenter. Send comments on environmental and land use aspects to: Moira D. Keane, Environmental Specialist, FAA, Eastern Regional Air Traffic Division, 1 Aviation Plaza, Jamaica, NY 11434. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of comments received. All comments submitted will be available for examination in the Rules Docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded from the FAA regulations section of the Fedworld electronic bulletin board service (telephone: 703-321-3339) or the Federal Register 's electronic bulletin board service (telephone: 202-512-1661) using a modem and suitable communications software.

Internet users may reach the FAA's web page at http://www.faa.gov or the Federal Register 's web page at http://www.access.gpo.gov/nara for access to recently published rulemaking documents.

Any person may also obtain a copy of this NPRM by submitting a request to the FAA, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591, or by calling (202) 267-8783. Communications must identify both docket numbers of this NPRM. Persons interested in being placed on a mailing list for future NPRM's should call the FAA, Office of Rulemaking, (202) 267-9677, to request a copy of Advisory Circular No. 11-2A, which describes the application procedure.

Restricted airspace at Fort Drum, NY, dates back to at least the 1960's. The current designated altitudes for the restricted area were based on past use of the installation as a National Guard facility which had primarily seasonal training requirements. The higher altitude designated for the period April 1 through September 30 reflected increased use of the restricted area by reserve components during annual summer training periods. In 1985, an U.S. Army unit, the 10th Mountain Division, was activated at Fort Drum with a full time, year-round training requirement. In addition, over the years, use of R-5201 has increased by U.S. Air Force units. The reduction of R-5201's upper limit to 20,000 feet MSL during the period October 1 through March 31 has increasingly become a limiting factor to the year-round training needs at Fort Drum.

The FAA is considering an amendment to 14 CFR part 73 to amend the designated altitudes of R-5201 Fort Drum, NY. Specifically, this action proposes to change the designated altitudes for R-5201 from “Surface to 23,000 feet MSL, April 1 through September 30; surface to 20,000 feet MSL, October 1 through March 31” to “Surface to 23,000 feet MSL.” This proposal would delete the seasonal changes to the upper altitude limit and establish 23,000 feet MSL as the upper altitude limit on a year-round basis. The 20,000 feet MSL limit adversely affects training at Fort Drum and requires units to alter their training profiles when 23,000 feet is not available. This is disruptive to training continuity and precludes the most cost-effective accomplishment of training activities. The U.S. Army has proposed this modification to better accommodate existing and forecast training requirements at Fort Drum. This action would not change the current boundaries, time of designation, or activities conducted within R-5201. Thus, as under the current rule, the restricted area's designated altitude remains 23,000 feet MSL at all times between April 1 and September 30. Under the proposed rule, the restricted area's designated altitude would change from 20,000 feet MSL to 23,000 feet MSL for the October 1 to March 31 period. Because the time of designation is not being amended, between October 1 and March 31, the restricted area would continue to be in effect only between 0600 and 1800 local time, unless a Notice to Airmen is issued 48 hours in advance; and it would continue to be in effect continuously between April 1 and September 30.

Section 73.52 of 14 CFR part 73 was republished in FAA Order 7400.8J, dated September 20, 2001.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subjected to the appropriate environmental analysis in accordance with FAA Order 1050.1D, Policies and Procedures for Considering Environmental Impacts, prior to any FAA final regulatory action.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 73 as follows:

The Federal Energy Regulatory Commission (Commission) proposes to amend § 284.12(c)(1)(ii) of its open access regulations to require that interstate pipelines permit releasing shippers to recall released capacity and renominate that recalled capacity at any of the scheduling opportunities provided by interstate pipelines. The proposed rule is intended to create more flexibility for firm capacity holders on interstate pipelines by synchronizing the Commission's regulation of recalled capacity with its standards for intra-day nominations. The proposed rule is intended to benefit the public by providing firm capacity holders with increased flexibility in structuring capacity release transactions that will result in enhanced competition across the interstate pipeline grid.

In Order No. 636, the Commission adopted regulations permitting shippers (releasing shippers) to release their capacity to other shippers (replacement shippers). 1 Under these regulations, releasing shippers were permitted to “release their capacity in whole or in part, on a permanent or short-term basis, without restriction on the terms and conditions of the release.”  2 The regulation permits releasing shippers to impose terms on a release transaction under which the releasing shipper reserves the right to recall that capacity to use the capacity itself. As an example, a shipper might include a recall condition in the event that temperature drops below a pre-determined level. 3

In July 1996, in Order No. 587, 4 the Commission incorporated by reference consensus standards approved by the Gas Industry Standards Board (GISB) designed to standardize business practices and communication protocols of interstate pipelines in order to create a more integrated and efficient pipeline grid. GISB is a private, consensus standards developer composed of members from all segments of the natural gas industry.

One aspect of GISB's standards adopted in Order No. 587 covered capacity release transactions. Of relevance here, two standards, 5.3.6 and 5.3.7, apply to recalls of capacity release transactions.

In 1996, when GISB first adopted these standards, GISB's standards provided for one nomination, at 11:30 a.m. CCT  8 for the next gas day and only one intra-day nomination at an indeterminate time. In order to create a more standardized intra-day nomination schedule, 9 GISB amended its standards to provide for three standardized intra-day nomination opportunities: an Evening nomination at 6 p.m. CCT to take effect on the next gas day, an Intra-Day 1 nomination at 10 a.m. CCT to take effect at 5 p.m. CCT on the same gas day, and an Intra-Day 2 nomination at 5 p.m. CCT to take effect at 9 p.m. CCT on the same gas day. 10 GISB, however, has not amended its capacity release recall standards to take into account its adoption of these standardized intra-day nomination opportunities.

In Order No. 637, the Commission adopted § 284.12(c)(1)(ii) of its regulations which requires interstate pipelines to “permit shippers acquiring released capacity to submit a nomination at the earliest available nomination opportunity after the acquisition of capacity.”  11 The purpose of this regulatory change was to permit capacity release transactions to take place on an intra-day basis so that released capacity can compete with pipeline capacity on a comparable basis. 12 The adoption of § 284.12(c)(1)(ii) now permits shippers to acquire released capacity at any intra-day nomination opportunity and to nominate coincident with their acquisition of capacity. 13

On February 1, 2001, GISB filed a report with the Commission, in Docket No. RM98-10-000, concerning its development of standards regarding partial day recalls of capacity. According to GISB, some members believed that partial day recalls fell within the purview of the scheduling equality requirements of Order No. 637, while others did not. Other members, GISB asserts, believe that partial day recalls are a valid business practice, irrespective of whether this practice is required by Order No. 637. Due to these disagreements, GISB reports it has been unable to reach consensus on how to proceed.

On March 16, 2001, AGA filed, in Docket Nos. RM98-10-008 and RM98-12-008, 14 a “Reply to February 1, 2001, Gas Industry Standards Board Report and Petition for Clarification and Directive from FERC Regarding Requirement for Capacity Release Scheduling Equality.” AGA argues that the Commission should require pipelines to allow partial day recalls as part of their compliance with § 284.12(c)(1)(ii). Ten comments to AGA's request were filed. 15

The Commission is proposing to revise § 284.12(c)(1)(ii) of its regulations to require pipelines to permit recalls of capacity at each nomination opportunity. Specifically, the Commission is proposing to require pipelines to permit shippers to recall released capacity and renominate such recalled capacity at each nomination opportunity provided by the pipeline according to the notice and bumping provisions applicable to interruptible shippers. 16

This proposal will enable releasing shippers to coordinate recalls of capacity release transactions and renominations of that capacity with the current intra-day nomination cycle. Under this proposal, recall rights would operate according to the same timelines that now apply to interruptible transportation.

This proposal is intended to ensure that the regulations relating to capacity release recalls remain consistent with the original intent of the Commission's capacity release regulations by providing releasing shippers with the flexibility to structure capacity release transactions that best fit their business needs. The proposal also seeks to foster greater competition for pipeline capacity by creating parity between scheduling of capacity release transactions and scheduling of pipeline interruptible service. By enabling releasing shippers to recall and renominate capacity quickly, they will have greater incentive to release capacity, providing capacity purchasers with an alternative to purchasing pipeline interruptible service. At the same time, this proposal will provide replacement shippers whose capacity is recalled the same advance notice and protection from bumping as is provided to interruptible shippers under the Commission's regulations.

The Commission has placed great reliance on GISB's development of consensus standards, because the industry is the most knowledgeable about how it operates and it is the industry that must operate under these standards. 17 However, when GISB has been unable to reach consensus on issues concerning Commission policy, the Commission has resolved the policy dispute so that the standards development process can continue. 18

A consensus of GISB's membership adopted its current standards for capacity release recalls when GISB's standards provided for only one nomination a day, at 11:30 a.m. CCT and a single non-standardized intra-day nomination . But the circumstances under which the recall standards were developed have markedly changed as the number of nomination opportunities have now expanded to four nomination opportunities. At the same time, it is apparent that the consensus supporting GISB's existing recall standards no longer exists, and GISB itself has recognized that it can no longer make progress in resolving this issue. In these circumstances, the Commission must resolve the policy question regarding partial day recalls.

In Order No. 636, the Commission established the capacity release mechanism to create competition with pipeline firm and interruptible transportation. 19 One of the fundamental tenets of the Commission's capacity release regulations is that releasing shippers have the opportunity to establish any recall conditions for their capacity. Section 284.8(b) expressly permits shippers to “release their capacity in whole or in part, on a permanent or short-term basis, without restriction on the terms and conditions of the release .”  20 In Order No. 636-A, the Commission recognized that “a releasing shipper may include terms and conditions, such as recall rights, that will ensure it has adequate peak day capacity.”  21 Thus, all recall conditions, including partial day recalls are consistent with the Commission's regulations. Moreover, in Order No. 637, the Commission sought to create greater scheduling parity between capacity release transactions and pipeline services by enabling capacity release transactions to take place on an intra-day basis at each of the four scheduling opportunities. 22 While this regulatory change enables shippers to release capacity at any nomination opportunity, the existing GISB recall standards do not permit releasing shippers to take full advantage of the intra-day nomination opportunities by recalling the capacity and renominating that capacity at each of the four scheduling opportunities. Allowing partial day recalls is, therefore, consistent with the overall regulatory changes promulgated in Order No. 637.

Permitting partial day recalls will add flexibility to shippers' rights and will better enable releasing shippers to offer released capacity that competes with the pipelines' interruptible service. The current GISB standards inhibit the ability of releasing shippers to release capacity because of their inability to quickly reclaim capacity when they require it for their own use. For example, under the current GISB standards, a releasing shipper that meets the 8 a.m. CCT notification time is unable to recall its capacity and submit a timely nomination for the next gas day at the 6 p.m. CCT Evening Nomination cycle. Moreover, a shipper that misses the 8 a.m. CCT recall notification time will miss four nomination opportunities and will be unable to have its volume flow until 48 hours after it submits the recall notification. 23

As a result of such lengthy delays, releasing shippers may not be able to use their recall rights as effectively as possible to ensure that they can retain adequate peak day capacity for their own needs. The delay in rescheduling recalled capacity also can have an adverse competitive impact on the market by reducing the amount of capacity available for release. As AGA points out, if an LDC is a provider of last resort under a state unbundling initiative and is given notice that insufficient supply is being delivered to its city-gate, the LDC will need to recall released capacity for later in the same day or, at least, for the next day. If a partial day recall right is not provided, a releasing shipper with supplier-of-last-resort obligations will be reluctant to release capacity at all since it will not be able to recall that capacity when it is needed. In that event, shippers seeking capacity will have fewer alternatives to purchasing pipeline interruptible service.

Under the Commission's proposal, the releasing shipper would be able to recall and renominate its capacity in accordance with the current nomination and scheduling timelines. For example, the shipper could notify the pipeline of its recall and renomination at the 10 a.m. CCT Intra-Day 1 nomination cycle and submit a new nomination that will become effective at 5 p.m. CCT on the same day. In processing recalls and renominations, the pipeline would follow the applicable GISB nomination standard (standard 1.3.2) in terms of providing notice to the bumped replacement shipper.

The replacement shipper also will receive the same protection against loss of service as do interruptible shippers. In Order No. 587-G, the Commission determined that interruptible shippers could be bumped by firm intra-day nominations at the first three nomination opportunities, but could not be bumped at the third intra-day nomination opportunity (5 p.m. CCT nomination, with scheduled volumes by 9 p.m. CCT). The Commission provided this protection against bumping to provide stability in the nomination system, so that shippers can be confident by late afternoon that they will receive their scheduled flows. 24 This rationale seems to apply equally to replacement shippers so that they would not have to monitor the status of their nominations after 5 p.m. CCT.

In their comments on AGA's March 16, 2001 filing, the pipelines (INGAA, DEGT, El Paso Pipeline Companies, Enron) are not opposed to some revision of the GISB standards to liberalize the recall conditions. They maintain that allowing partial day recalls requires resolution of a number of issues such as notification of the replacement shipper that its capacity is being recalled, operational provisions to ensure that the recalled party does not continue to flow gas, billing issues regarding the use of capacity for part of a day, and scheduling and nomination issues.

The Commission's proposal here is designed so as not to cause operational problems for pipelines. Some pipelines already have implemented partial day recall provisions on their systems. 25 Partial day recalls should not adversely affect scheduling procedures, since under the Commission's proposal, recalls will take place under the same nomination timeline currently used for nominating and scheduling firm and interruptible service, including bumping of interruptible service. Order No. 637 already requires pipelines to implement procedures to allocate capacity and potential imbalances and penalties associated with partial day releases, so the same procedures can be used for partial day recalls. 26

In their comments on AGA's March 16, 2001 filing, NGSA and Dynegy oppose partial day recalls. They maintain that flowing or partial day recalls undermine system reliability, because they may shut in production or result in scheduling problems, overruns, penalties, or operational flow orders. They claim that if capacity is recalled, the replacement shippers (whose capacity is recalled) may be unable to obtain replacement capacity within the same day. They further contend that flowing day recalls may undermine competition. They assert that if flowing day recalls become the default method of doing business, such recall rights will result in lowering the value of released capacity. As a consequence, they maintain, shippers may be left with no alternative other than purchasing capacity from the pipeline.

As discussed above, the use of partial day recalls should create no additional scheduling problems since recalls will be scheduled according to the existing scheduling requirements. In effect, releasing shippers using partial day recalls are creating another form of interruptible transportation to compete with pipeline interruptible capacity and shippers purchasing recallable capacity should be subject to the same scheduling rules that apply to interruptible transportation. Partial day recalls will be no more likely to result in shut-in production than interruptible transactions that are subject to being bumped under the current standards.

As discussed earlier, permitting partial day recalls should not reduce competition, as Dynegy and NGSA assert, but should enhance competition as capacity that previously was not released because of concerns about recall rights becomes available as an alternative to pipeline interruptible service. Dynegy and NGSA appear to assume that if partial day recalls are not permitted, shippers will nonetheless release the same amount of capacity. However, as AGA points out, if LDCs or other shippers need to recall capacity to ensure their own peak day capacity, they may be reluctant to release capacity at all without some assurance of the ability to recall. Since Order No. 636, the Commission has proceeded under the assumption that the best way to improve access to capacity is to provide flexibility for releasing shippers to establish the terms and conditions of releases. While including partial day recalls may make some capacity releases less valuable to replacement shippers, as Dynegy and NGSA assert, the replacement shippers will know the terms of releases upfront and can determine whether to purchase that capacity or seek more reliable capacity, and can take the recall conditions into account in determining how much the capacity is worth.

Office of Management and Budget Circular A-119 (§ 11) (February 10, 1998) provides that federal agencies should publish a request for comment in a NOPR when the agency is seeking to issue or revise a regulation containing a standard identifying whether a voluntary consensus standard or a government-unique standard is being proposed. In this NOPR, the Commission is proposing to issue its own regulation, because the existing GISB standard has not been revised to take into account changed circumstances, there is no longer consensus supporting this standard, and the existing standard fails to reflect Commission policy.

The following collection of information contained in this proposed rule has been submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507(d). The Commission solicits comments on the Commission's need for this information, whether the information will have practical utility, the accuracy of the provided burden estimate, ways to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods for minimizing respondents' burden, including the use of automated information techniques. The following burden estimate includes the costs of modifying, preparing and submitting tariff changes to reflect compliance with the Commission's proposed regulation to require pipelines to permit shippers to recall released capacity and renominate such recalled capacity at each nomination opportunity provided by the pipeline. Adoption of the proposed regulation will not place additional burdens on pipelines, because the regulation will require pipelines to use existing nomination procedures and protocols. The one-time tariff filing will not result in on-going costs.

Public Reporting Burden: (Estimated Annual Burden).

VA proposes to rewrite 38 CFR 3.202 in plain language. The current regulation, located in subpart A of part 3, discusses when and how evidence from foreign countries must be authenticated. VA proposes to create new § 3.2420 to restate the current regulation. The proposed section would be located in Subpart D, Universal Adjudication Rules That Apply to Benefit Claims Governed by part 3 of this Title.

Paragraph (a) of proposed § 3.2420 states when authentication of the signature of officials of foreign countries is required and who may provide authentication. This is a restatement of the first sentence of paragraph (a) of current § 3.202.

Paragraph (b) of proposed § 3.2420 addresses who may authenticate signatures of foreign government officials when the authentication called for in paragraph (a) of this section is not available. This is a restatement of the last sentence of paragraph (a) and the text of paragraphs (a)(1) and (a)(2) of current § 3.202. We have eliminated the requirement that only the “nearest” United States Consular Officer may certify that the signature of an official of a foreign country has been investigated and found to be authentic. We believe that requirement is unnecessarily narrow and can be broadened without diminishing the integrity of VA's programs. We have, therefore, amended this provision to allow a United States Consular Officer from another country to authenticate the signature.

Paragraph (c) of proposed § 3.2420 lists categories of evidence from foreign countries that do not require authentication of signature. This is a restatement of paragraph (b) of current § 3.202.

Paragraph (d) of proposed § 3.2420 explains that photocopies of original documents are acceptable to VA when they are genuine and free from alteration. This is a restatement of paragraph (c) of current § 3.202.

This rulemaking reflects VA's goal of making government more responsive, accessible, and comprehensible to the public. The Plain Language Regulations Project was developed as a long-term comprehensive project to reorganize and rewrite in plain language the adjudication regulations in part 3 of title 38, Code of Federal Regulations. This proposed rule is one of a series of proposed revisions to those regulations.

The Unfunded Mandates Reform Act requires (in section 202) that agencies assess anticipated costs and benefits before developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more in any given year. This proposed rule will have no consequential effect on State, local, or tribal governments.

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

The Secretary certifies that the adoption of this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The proposed rule does not directly affect any small entities. Only VA beneficiaries could be directly affected. Therefore, pursuant to 5 U.S.C. 605(B), this amendment is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The catalog of Federal Domestic Assistance Program numbers for this proposal are 64.100, 64.101, 64.104, 64.105, 64.106, 64.109, 64.100, and 64.127. 1

For the reasons set forth in the preamble, VA proposes to amend 38 CFR part 3 as follows:

This section provides additional information by addressing the following questions:

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides (NO X ), or particulate matter (PM 10 ); those that emit 10 tons per year of any single hazardous air pollutant (specifically listed under the CAA); or those that emit 25 tons per year or more of a combination of hazardous air pollutants (HAPs). In areas that are not meeting the National Ambient Air Quality Standards for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification.

Bay Area submitted, via the California Air Resources Board (CARB) its initial operating permits program to EPA on March 23, 1995. Because the Bay Area's operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval of the program, and conditioned full approval on the District revising its program to correct the deficiencies. The interim approval notice published on June 23, 1995 [60 FR 32606], described the program deficiencies and revisions that had to be made in order for the Bay Area's program to receive full approval. Since that time, the Bay Area has revised, and the California Air Resources Board, on behalf of the Bay Area, has submitted a revision to the Bay Area's operating permit program; this revision was submitted May 30, 2001. This Federal Register notice describes the changes that have been made to the Bay Area operating permit program as submitted on May 30, 2001, and the basis for EPA proposing full approval of the program.

Concurrent with our action on June 23, 1995 to grant final interim approval to the Bay Area's title V program, EPA granted, pursuant to 40 CFR part 52, final approval to the District's Federally-Enforceable State Operating Permit Program (FESOP) which is contained in portions of Regulation 2, Rule 6, and the District's Manual of Procedures, Volume II, Part 3 (MOP) thereby incorporating the FESOP into the California SIP. In the process of correcting cited deficiencies in its operating permit program, the District also revised language in Regulation 2, Rule 6 related to its FESOP rule. Even though this proposed rulemaking action discusses the District's FESOP program, today's proposed approval is for part 70 purposes only. EPA is not proposing to approve, for SIP purposes under 40 CFR part 52, those portions of Regulation 2 Rule 6 that involve the FESOP program. We can only take action on the Regulation 2, Rule 6 for SIP purposes only after the State submits it to us.

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

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

As discussed in the June 23, 1995 [60 FR 32606] rulemaking, full approval of the Bay Area operating permit program was made contingent upon satisfaction of the following conditions:

Issue (1): Bay Area was required to provide a demonstration that each activity on its insignificant activities list is truly insignificant and is not likely to be subject to an applicable requirement. Alternatively, the District may establish emissions level cut-offs, in which activities emitting below the cut-offs would qualify as insignificant. In the latter case, the District must demonstrate that the cut-off emissions levels are insignificant compared to the level of emissions from and type of units that are required to be permitted or subject to applicable requirements. In addition, Bay Area must revise Regulation 2, Rule 6 to state that activities needed to determine the applicability of, or impose applicable requirements on, the facility may not qualify as insignificant activities. (§§ 70.5(c) and 70.4(b))

Rule Change: Instead of demonstrating that each activity on the Bay Area's insignificant activity list is truly insignificant, the District corrected this deficiency by establishing significant source emissions cut-offs below which activities would be insignificant. To implement this correction, the District amended Regulation 2, Rule 6, section 239 to define “significant source” as a source that has a potential to emit of more than 2 tons per year of any regulated air pollutant, or more than 400 lbs per year of any hazardous air pollutant. In addition, the application content section of rule 2-6-405 requires operating permit applications to identify and describe each permitted source at the facility and each source or other activity that is exempt from the requirements to obtain a permit or excluded from District rules or regulations under Regulation 2, Rule 1. Furthermore, all part 70 permit applications are required to contain a list of all applicable requirements that apply to each source (Rule 2-6-405.5). Finally, Section 2.1.2 of the Manual of Procedures (“MOP”) requires applications to include other information necessary to implement and enforce other applicable requirements or determine the applicability of any such requirement on any source (whether permitted, exempt, or excluded) or any other activity.

Issue (2): Bay Area was required to include a term consistent with the Part 70 definition of “applicable requirement,” and use that term consistently in rules 2-6-409.1, 2-6-409.2 and throughout the regulation.

Rule Change: The District corrected this deficiency by revising the definition of “applicable requirement” at 2-6-202 to include a reference to the federal definition of “applicable requirement” as defined in 40 CFR 70.2. They have also added the term to 2-6-409.1 and 409.2.

Issue (3): Bay Area rule 2-6-409 was required to be revised to ensure that permit terms and conditions assure compliance with all applicable requirements (§ 70.7(a)(1)(iv)) and that permits contain emission limitations and standards (§ 70.6(a)(1)) and compliance certification requirements (§ 70.6(c)(1)) that assure compliance with all applicable requirements. Prior to being revised, the rule only required the District's operating permits to include requirements for testing, monitoring, reporting, and recordkeeping sufficient to assure compliance with the terms and conditions of the permit and the applicable requirements themselves.

Rule Changes: The District corrected this deficiency by revising the permit content section of Rule 2-6-409, to: (1) Require that all applicable requirements be included in the permit; and (2) add requirements to the compliance schedule section of permit content requirements (see 2-6-409.10.3). Furthermore, Rule 2-6-409.7 already required that the permit contain a statement that the owner or operator must comply with all permit conditions and limitations set forth in the permit. These additions will ensure that the permits contain all necessary requirements to assure compliance with applicable requirements.

Issue (4): Bay Area was required to show that certifications signed by the responsible official affirmatively state that they are based on truth, accuracy, and completeness, and that the certifications be based on information and belief formed after reasonable inquiry. Bay Area needed to revise Rules 2-6-405.9, 2-6-502, and the MOP (Sections 4.5 and 4.7), and any other certification provisions to ensure that both elements are explicitly required. (§ 70.5(d))

Rule Change: The District corrected this deficiency by revising several parts of the rule. First, the District added the following to the permit content section at 409.20: “A certification requirement for all documents submitted pursuant to a major facility review permit. For applications, compliance certifications, and reports, the certification shall state that based on information and belief formed after reasonable inquiry, the statements and information in the document are true, accurate, and complete. The certifications shall be signed by a responsible official for the facility.” Second, the District revised the application content requirements at Rule 2-6-405.9 to state that applications must contain: “A compliance certification by a responsible official of the facility that the application forms and all accompanying reports and other required compliance certifications are true, accurate, and complete based on information and belief formed after reasonable inquiry; and* * *.” Third, the District revised the Monitoring and Records section at Rule 2-6-502 to state that: “A responsible official shall certify that all such reports are true, accurate, and complete based on information and belief formed after reasonable inquiry.” Finally, the MOP Sections 4.5 and 4.7, were revised to include these provisions and section 2-6-426 was added and requires compliance certifications consistent with Part 70. (See § 70.5(d)).

Issue (5): Bay Area was required to revise Regulation 2-6 to define and require notice to affected states. Alternatively, Bay Area could have made a commitment to: (1) Initiate rule revisions upon being notified by EPA of an application by an affected tribe for state status, and (2) provide affected state notice to tribes upon their filing for state status (i.e., prior to Bay Area's adopting affected state notice rules). (§§ 70.2 and 70.8(b)

Rule Change: The District corrected this deficiency by adding the term “Affected State” at Rule 2-6-242 to provide: “A State whose air quality may be affected by a facility and that is contiguous to the State of California or a state that is within 50 miles of a permitted source within the District.” In addition, the District added notification requirements for affected states consistent with 40 CFR 70.8(b)(1) to Rule 2-6-412. The District also revised Rule 2-6-412.6, consistent with 40 CFR 70.8(b)(2), to require written notification to EPA and affected states of any refusal to accept all recommendations from an affected state received during the public comment period for a draft permit.

Issue (6): The District was required to eliminate the phrase “but not limited to” from the definition of “administrative permit amendment.” (§ 70.7(d)(1)(iv))

Rule Change: The District corrected this deficiency by revising the definition at 2-6-201 to eliminate the problematic phrase.

Issue (7): The District was required to revise Rule 2-6-404.3 to limit the universe of significant permit modification applications due 12 months after commencing operations to only those applications for revisions pursuant to section 112(g) and title I, parts C and D of the Act that are not prohibited by an existing operating permit. Except in the above circumstances, a source is not allowed to operate the proposed change until the permitting authority has revised the source's operating permit. (§ 70.5(a)(1)(ii)).

Rule Change: Bay Area corrected this deficiency by revising Rule 2-6-404.3 to be consistent with federal regulations at 40 CFR Part 70. The definition now reads: “An application for a significant permit revision shall be submitted by the applicant prior to commencing an operation associated with a significant permit revision. Where an existing federally enforceable major facility review permit condition would prohibit such change in operation, the responsible official must request preconstruction review and obtain a major facility review permit revision before commencing the change.”

Issue (8): Bay Area was required to eliminate the extended review period from the minor permit modification procedures at Rule 2-6-414.2 because it is inconsistent with Rules 2-6-410.2 and 40 CFR 70.7(e)(2)(iv).

Rule Change: The District corrected this deficiency by revising Rule 2-6-414.2 to read: “The APCO shall act on the proposed minor revision within 15 days after the end of EPA's 45-day review period or within 90 days of receipt of the permit application whichever is later.” This is now consistent with part 70 and 2-6-410.2.

Issue (9): The District was required to revise 2-6-412.1 to include notice “by other means if necessary to assure adequate notice to the affected public.” (§ 70.7(h)(1)) Rule Change: The District corrected this deficiency by adding the suggested language to Rule 2-6-412.1.

Issue (10): Bay Area was required to add a provision to the MOP (section 4.1) to state that only alternative emission control plans (AECPs) that have been approved into the SIP may be incorporated into the federally enforceable portion of the permit. (§ 70.6(a)(1)(iii))

Rule Change: The District has not revised the MOP as specified in our final interim approval. However, the District has corrected this deficiency by stating in a letter dated July 7, 2000 that there are no general AECP provisions in District rules. The only specific AECP provisions in the District rules are contained in the District coating rules, all of which have been SIP approved. Therefore, it is not possible for non-SIP-approved AECP provisions to be incorporated into the federally enforceable portion of an operating permit. Further, the language in the MOP is not inconsistent with federal regulations at Part 70, which is silent on how the District must treat AECPs. EPA understands that the District will identify only SIP-approved AECP provisions, as federally enforceable in operating permits.

Issue (11): Bay Area was required to add emissions trading provisions consistent with 40 CFR 70.6(a)(10), which requires that trading must be allowed where an applicable requirement provides for trading increases and decreases without a case-by-case approval.

Rule Change: The District corrected this deficiency by revising Rule 2-6-306—“Emissions Trading” to be consistent with 40 CFR Part 70 as follows: “The APCO shall allow emissions trading within a facility that has a major facility review permit in accordance with the procedures and restrictions set forth in Rule 2-6-418. This provision shall not apply to the phase II acid rain portion of any facility subject to this Rule.”

Issue (12): Bay Area was required to add a requirement to Regulation 2-6 that any document required by an operating permit must be certified by a responsible official. (§ 70.6(c)(1))

Rule Change: The District has added the required language at the end of Rule 2-6-409.20 which now states, “[t]he certifications shall be signed by a responsible official for the facility.”

Issue (13): Bay Area was required to revise Rule 2-6-224 and Rule 2-6-409.10 to specify that all progress reports must include: (1) Dates when activities, milestones, or compliance required in the schedule of compliance were achieved; and (2) an explanation of why any dates in the schedule of compliance were not or will not be met and any preventive or corrective measures adopted. (§ 70.6(c)(4)(i and ii))

Rule Change: Bay Area responded and revised Section 2-6-409.10 to include a requirement that compliance plans must include deadlines for achieving each item in the plan, and a requirement that progress reports must be submitted every 6 months. Also, Section 409.10.3 now includes the statement that, “[p]rogress reports shall contain the dates by which each item in the plan was achieved, and an explanation of why any dates in the schedule of compliance were not or will not be met, and any preventative or corrective measure adopted.” No changes have been made or are necessary to District Rule 2-6-224 because such changes would be redundant with the changes already made in 2-6-409.

Issue (14): Bay Area was required to revise Section 4.5 of the MOP and add a provision to Rule 2-6-409 to require that compliance certifications be submitted more frequently than annually if specified in an underlying applicable requirement. (§ 70.6(c)(4))

Rule Change: The District corrected this deficiency by adding new Section 2-6-409.17 that requires permits to include, “a requirement for annual compliance certifications, unless compliance certifications are required more frequently than annually in an applicable requirement or by the APCO.”

Issue (15): At the time of the interim approval, Bay Area indicated in its program description that it intended to process new units that do not affect any federally enforceable permit condition as “off-permit” (see Section II, p. 21 and Staff Report, pp. 3-4). Bay Area was required to submit a letter revising its program description to indicate that it will not process new units as “off-permit” or it could have revised its rule to include the part 70 off-permit provisions as defined in federal regulations at 40 CFR 70.4(b)(14) and 70.4(b)(15).

Rule Change: Bay Area corrected this deficiency by providing a letter to Jack Broadbent, Director, Region IX, Air Division, dated May 24, 2001, from the Bay Area APCO, Ellen Garvey that stated: “The District has decided not to incorporate the ‘off-permit’ provisions into its current program submittal.” Therefore, no off-permit changes will be allowed under the Bay Area program.

Issue (16): Bay Area was required to revise 2-6-222 defining “regulated air pollutant” to be consistent with the Federal definition (§ 70.2) and include pollutants subject to any requirement established under section 112 of the Act, including sections 112(g), (j), and (r).

Rule Change: The District corrected this deficiency by revising the definition of regulated air pollutant at Rule 2-6-222.5 to state, “* * * any pollutant that is subject to any standard or requirement promulgated under Section 112 of the Clean Air Act, including sections 112(g), (j) and (r).”

Issue (17): One of EPA's conditions for full title V program approval was the California Legislature's revision of the Health and Safety Code to eliminate the provision that exempts “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals” from the requirement to obtain a permit. See California Health and Safety Code section 42310(e). Even though the local Districts have, in many cases, removed the title V exemption for agricultural sources from their own rules, the Health and Safety Code has not been revised to eliminate this provision.

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

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

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

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

Rule Change: In addition to the statutory exemption in the Health and Safety Code, Bay Area's regulations contained an exemption; however, the District has since revised its regulations to allow for permitting once state law provides for it. Specifically, Regulation 1, Section 110 and Regulation 2, Rule 1 were revised to allow for permitting pursuant to the California Health and Safety Code.

The Bay Area has corrected the deficiencies cited in the interim approval on June 23, 1995 [60 FR 32606]. Thus, EPA is proposing full approval of the Bay Area operating permit program. In addition, Bay Area has made other changes to its operating permit program since we granted interim approval. These changes were not required by EPA to correct interim approval deficiencies cited in our June 23, 1995 Federal Register . EPA has reviewed the additional changes and proposes to approve most of the changes. Table 1a and 1b, respectively, list which rule and MOP subsections we are proposing to approve.

EPA is not acting on some changes that the District made to its rules; these changes were not required to correct interim approval issues and may not be approvable. See Table 2 below for a list of the rule (and MOP) sections of Bay Area's program on which EPA is not taking action. Please refer to the TSD for additional information on the basis for our decision to either approve or not act on those other changes. If a section is not listed in any of the tables below, it means that there has been no change to that section since interim approval.

This section provides additional information by addressing the following questions:

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides (NO X ), or particulate matter (PM 10 ); those that emit 10 tons per year of any single hazardous air pollutant (specifically listed under the CAA); or those that emit 25 tons per year or more of a combination of hazardous air pollutants (HAPs). In areas that are not meeting the National Ambient Air Quality Standards for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification. For example, in ozone nonattainment areas classified as “serious,” major sources include those with the potential of emitting 50 tons per year or more of volatile organic compounds or nitrogen oxides.

Where an operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval contingent on the District revising its program to correct any deficiencies. Because the San Diego operating permit program substantially, but not fully, met the requirements of part 70, EPA granted interim approval to its program in a rulemaking published on December 7, 1995 (60 FR 62753). The interim approval notice described the conditions that had to be met in order for the San Diego program to receive full approval. Since that time, the California Air Resources Board, on behalf of the San Diego has submitted one revision to the San Diego's interimly approved operating permit program; this revision is dated June 4, 2001. This Federal Register notice describes the changes that have been made to the San Diego operating permit program since interim approval was granted.

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

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

As explained in the December 7, 1995 [60 FR 62753] rulemaking, full approval of the San Diego operating permit program required satisfaction of the following conditions:

Issue (1): One of EPA's conditions for full title V program approval was the California Legislature's revision of the Health and Safety Code to eliminate the provision that exempts “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals'' from the requirement to obtain a permit. See California Health and Safety Code section 42310(e). Even though the local Districts have, in many cases, removed the title V exemption for agricultural sources from their own rules, the Health and Safety Code has not been revised to eliminate this provision.

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

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

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

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

Rule or Program Change: San Diego amended its program to require agricultural operations to obtain Title V operating permits when state law is revised.

Issue (2): San Diego was required to revise Rule 1401(c)(43) definition of “Significant Permit Modification,” to be consistent with Part 70 which requires that any significant change in monitoring permit terms or conditions be processed as a significant permit modification.

Rule Change: San Diego met this condition by amending the definition of “significant permit modification” at Regulation XIV, Rule 1401(c)(44) to include a “significant change in existing monitoring permit terms or conditions or relaxation to monitoring, recordkeeping, or reporting requirements; or * * *” See 40 CFR 70.7(e)(4).

Issue (3): San Diego was required to define affected state or, because of its cooperative agreement with Native American Tribes, EPA would accept a commitment from San Diego to: (1) Initiate rule revisions upon notification from EPA that an affected tribe has applied for state status; and (2) provide affected state notice to tribes upon a tribe's filing for state status, that is, prior to the District's adoption of affected state notice rules. See 40 CFR 70.2 and 70.8(b)(1).

Rule Change: San Diego met this requirement by revising its rule to define affected state at Rule 1401(c)(5) to mean: “any state that: (i) Is contiguous with California and whose air quality may be affected by a permit action, or (ii) is within 50 miles of the source for which a permit action is being proposed. For purposes of this rule affected state includes any federally recognized Eligible Indian Tribe.” In addition, Rule 1415 was amended to require affected states be notified by the APCO at least 45 days prior to issuance of a five year initial permit to operate, a revised permit resulting from an application for significant modification or renewal of such a permit.

Issue (4): San Diego was required to revise Rule 1410(h)(7), paragraph 2 to require permit reopening procedures for any inactive status permit that is modified to reflect new applicable requirements upon being converted to active status if there are 3 years or more remaining on the term of its 5-year permit. See 40 CFR 70.7(f)(1)(i).

Rule Change: San Diego met this condition by deleting, in its entirety, subsection (7) of rule 1410. The rule, therefore, no longer allows inactive status permits to be reactivated.

Issue (5): San Diego was required to remove any activities from the District's list of insignificant activities that are subject to a unit-specific applicable requirement and adjust/add size cut-offs to ensure that the listed activities are truly insignificant. See 40 CFR 70.4(b)(2) and 70.5(c).

Rule Change: San Diego met this condition by revising its list of insignificant activities to remove activities (or impose size limits on units) that were subject to any unit-specific applicable requirements (e.g., refrigeration units are now limited to a charge of less than 50 pounds of a Class I or II ozone depleting compound). San Diego also included a justification as to why certain emission units are included in the insignificant activities list. San Diego's justification relied on district emission factors and expected operations from the subject emission units and/or included the analysis that was conducted in 1999 by a workgroup, including staff from the ARB, EPA Region 9 and CAPCOA, who developed a model list of insignificant activities. San Diego also removed language in the introduction to Appendix A to no longer allow insignificant activities to be exempt from the permit requirements of Regulation XIV.

Issue (6): San Diego was required to remove the reference to Rules 1410 (j) and (k) in Rule 1410(i). 1 This reference to minor and significant permit modifications in the provisions for administrative permit amendments could have be read to be inconsistent with the definition of “significant permit modification” (Rule 1401(c)(43)), which correctly defaulted unspecified changes to the significant permit modification process. In addition, EPA required the District to remove the word “include” from the phrase, “These shall include the following” in the administrative permit amendment section (Rule 1410(i)). See 40 CFR 70.7(d).

Rule Change: San Diego met this condition by revising Rule 1410 (i) to remove the reference to subsections (j) and (k) and to remove the phrase that included the word, “include.”

Issue (7): The District must revise either the definition of “federally mandated new source review” or the definition of “federally enforceable requirement” to clearly include minor new source review as an applicable requirement under title V.

Rule Change: San Diego met this requirement by revising Rule 1401(c)(20) to now define Federally Mandated New Source Review (NSR) as “* * * new source review that would be required by the approved State Implementation Plan (SIP).”

The EPA proposes full approval of the operating permits program submitted by San Diego County based on the revisions submitted on June 4, 2001 which satisfactorily address the program deficiencies identified in EPA's December 7,1995 Interim Approval Rulemaking. See 60 FR 62794. In addition, the District has revised and submitted as part of its revised program, changes to two forms:

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

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

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

This section provides additional information on today's rulemaking:

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include (but are not limited to) those that have the potential to emit: (1) 50 tons per year or more of volatile organic compounds or nitrogen oxides (NO X ) in a serious non-attainment; (2) 70 tons per year of particulate matter (PM 10 ) in a PM 10 non-attainment area; (3) 10 tons per year of any single Hazardous Air Pollutant (as defined under section 112 of the CAA); or (4) 25 tons per year or more of a combination of Hazardous Air Pollutants (HAPs).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This section provides additional information by addressing the following questions:

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides (NO X ), or particulate matter (PM 10 ); those that emit 10 tons per year or more of any single hazardous air pollutant (HAP) listed under the CAA; or those that emit 25 tons per year or more of a combination of HAPs. In areas that are not meeting the National Ambient Air Quality Standards for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the non-attainment classification. For example, in ozone non-attainment areas classified as “serious,” major sources include those with the potential of emitting 50 tons per year or more of volatile organic compounds or nitrogen oxides.

Where an operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval contingent on the state revising its program to correct the deficiencies. Because the District's operating permit program substantially, but not fully, met the requirements of part 70, EPA granted interim approval to the District's program on November 1, 1995. This Federal Register notice describes the changes that the District's has made to its operating permit program (Rules 1301, 1303, 1304 and 370) since interim approval was granted.

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

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

As discussed above, EPA granted final interim approval on November 1, 1995 (60 FR 55460) to the District's title V program. As stipulated in that rulemaking, full approval of the District operating permit program was made contingent upon satisfaction of certain conditions. In response to EPA's interim approval action, the District revised its operating permit program (Rules 1301, 1303, 1304 and 370) to remove the deficiencies identified by EPA. The District made its revised rule available to public review and comments. It also held a workshop on September 27, 2000. On January 18, 2001, the District adopted the revisions. The revised program was submitted to EPA on April 5, 2001. We have included below a discussion of each of the interim approval deficiencies, the conditions for correction, and a summary of how the District has corrected the deficiency. The Technical Support Document (TSD) for this action includes the District's submittal and more details of the revisions made. In the discussion here, each of the EPA cited deficiencies identified in the July 10, 1995 Federal Register notice (see 59 FR 60104) that proposed the interim approval is listed followed by a brief description of the District's revisions to its operating permit program to remove these deficiencies.

Issue a. Variances: Rule 1305.G(1) had to be revised to read “The terms and conditions of any variance or abatement order that would prescribe a compliance schedule shall be incorporated into the permit as a compliance schedule, to the extent required by Part 70 rules.”

District's Response to Issue a. After reviewing District Rule 1305.G(1) EPA has determined that the rule already incorporates all of the above language and that no further revision of the rule is required.

Issue b. Permit Content: Rule 1303.D.1.f., permit content requirements, had to be revised to provide adequate specificity with regard to the applicable recordkeeping requirements. See § 70.6(a)(3)(ii)(A) and (B).

District's response to Issue b. The District incorporated all of the above requirements in Rule 1303.D.1.f.

Issue c. Insignificant Activities: The District had to provide a demonstration that activities that are exempt from permitting under Rule XIII, (pursuant to Rule 202, the District's permit exemption list) are truly insignificant and are not likely to be subject to an applicable requirement. Alternatively, Rule XIII may restrict the exemptions to activities that are not likely to be subject to an applicable requirement and emit less than District-established emission levels. The District would have to establish separate emission levels for HAP and for other regulated pollutants and demonstrate that these emission levels are insignificant compared to the level of emissions from and type of units that are required to be permitted or subject to applicable requirements. See § 70.4(b)(2).

Additionally, Rule XIII had to be revised to require that insignificant activities that are exempted because of size or production rate be listed in the permit application. See § 70.5(c). See 1302.D.1.f., Definition of Insignificant Activities.

Additionally, Rule 1301 definition of “Insignificant Activities” had to be revised deleting the last sentence, which contradicts the requirement 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. See § 70.5(c).

District's response to Issue c. The District deleted the current definition of “Insignificant Activities” and added: “Insignificant emission levels” means the emission levels from any emission unit, that for regulated air pollutants excluding Hazardous Air Pollutants, are less than 2 tons per year potential to emit, and less than 0.5 tons per year potential to emit of any Hazardous Air Pollutants regulated under Section 112(g) of the Clean Air Act.

The District also deleted the last sentence in the definition of “Insignificant Activities” and added: “Insignificant Activities mean activities whose emissions do not exceed insignificant emission levels”. Activities exempted because of size, emission levels, or production rate shall be listed in the permit application.

Issue d. Definition of Administrative Permit Amendment: The District had to revise Rule 1301, definition of “Administrative Permit Amendment” Part 6. Santa Barbara had to define by rule what “other changes” will be determined to be administrative permit amendments. In order for “other changes” to qualify as an administrative permit amendment, the specific changes must be approved by the Administrator as part of the part 70 program. See § 70.7(d)(1)(iv).

District's response to Issue d. The District deleted part 6 of the definition of “Administrative Permit Amendment” which would have allowed the Control Officer and the USEPA to incorporate “other changes” into a permit as an Administrative Permit Amendment.

Issue e. Operational Flexibility Notification: Rule 1304.E.2 and E.3 had to be revised to incorporate a requirement that sources notify EPA of changes made under the operational flexibility provisions. See § 70.4(b)(12).

District's response to Issue e. The District added to the second paragraph of 1303.E.2: “The owner or operator shall also provide written notification to USEPA of emission trades made, a minimum of seven days in advance.”

The District also added to the first paragraph of 1303.E.3: “The owner or operator shall also provide written notification to USEPA, a minimum of seven days in advance, of express permit conditions contravened.”

Issue f. Public Notification Requirement: The District had to revise Rule 1304.D.6 to include notice “by other means if necessary to assure adequate notice to the affected public.” See § 70.7(h)(1).

District's response to Issue f. The District added to the first paragraph of 1304.D.6: “Notice shall be provided by other means if necessary to assure adequate notice to the affected public.”

Issue g. Significant Changes to Monitoring Requirements: Rule 1301, definition of “Minor Permit Modification” part (4) had to be revised to read “The modification does not involve any relaxation of any existing reporting or recordkeeping requirements in the permit, or any significant changes to existing monitoring requirements in the permit.” See §§ 70.7(e)(2)(i)(2) and 70.7(e)(4)(i).

District's response to Issue g. The District revised the definition of “Minor Permit Modification” part 4 of 1301.C to add the exact language cited above.

Issue h. Form of Applicable Requirement: The District rule did not require the identification of any difference in form from the applicable requirement upon which the term or condition is based. Regulation XIII had to be revised to include this requirement. This requirement is included in the Standard Permit Format. See § 70.6(a)(1)(i).

District's response to Issue h. The District added text to Rule 1303.D.1. to require that each Part 70 permit include elements that describe the origin of and authority for each permit term and condition and identify any difference in form as compared to the applicable requirement upon which the term or condition is based.

Issue i. Applicable Requirement Trading: The District had to add emissions trading provisions to Rule 1301 consistent with § 70.6(a)(10), which require that trading must be allowed where an applicable requirement provides for trading increases and decreases without a case-by-case approval.

District's response to Issue i. The District revised Rule 1301.D.1.s. and added all of the required provisions consistent with § 70.6(a)(10).

Issue j. Prompt Reporting of Deviations: Santa Barbara had not defined “prompt” in their program with respect to reporting of all deviations. Part 70 of the operating permits regulations requires prompt reporting of deviations from the permit requirements. Section 70.6(a)(3)(iii)(B) requires the permitting authority to define prompt in relation to the degree and type of deviation likely to occur and the applicable requirements. Santa Barbara's requirement for reporting of deviations was limited to deviations due to emergency upset conditions. Under part 70, deviations include, but are not limited to, upset conditions. In our final interim approval, we provided Santa Barbara three options to correct this deficiency. Santa Barbara had to revise rule 1303.D.1.g to be consistent with the more inclusive part 70 requirement.

District's response to issue j. The District revised Rules 1303.D.1.g. and h. to require the reporting of all permit deviations within 7 days after discovery of the violation.

Issue k. Exemptions: The District had to delete Rule 1301.B.4. Section 70.3(b) requires that major sources, affected sources (acid rain sources), and solid waste incinerators regulated pursuant to section 129(e) of the CAA may not be exempted from the program. Although Section 129(g)(1)(3) of the CAA exempts solid waste incineration units subject to Section 3005 of the Solid Waste Disposal Act, part 70 does not exempt these units. Any solid waste incineration unit that meets the definition of “major source” under part 70 would be subject to the requirement to obtain a part 70 permit regardless of the unit's applicability under Section 129.

District's response to issue k. The District deleted Rule 1301.B.4. which exempted solid waste incineration units from the operating permit program.

Issue l. Recordkeeping for off-permit changes: Santa Barbara's rule did not require that the permittee keep records describing off-permit changes and the emissions resulting from these changes. Santa Barbara's rule had to be revised to be consistent with the requirements of § 70.4(b)(14)(iv).

District's response to issue l. Under the District's rules, a source is required to obtain an Authority to Construct or minor modification for all changes at a Part 70 source. The application for the Authority to Construct describes the changes and the emissions resulting from the change.

Issue m. Definition of Title I Modifications and Significant Part 70 Permit Modifications: Rule 1301 defined “modification” to include all modifications under 40 CFR part 60. However, the definitions of “title I (or major) modification” and “significant part 70 permit modification” did not clearly define all modifications under part 60 as title I modifications and did not clearly ensure that they will be treated as significant permit modifications. In order to receive full approval, Santa Barbara had to clarify the definitions of “title I (or major) modification” and “significant part 70 permit modification” to include all modifications under 40 CFR part 60.

District response to issue m. The District revised the definitions of “Significant Part 70 Permit Modification” and “Title I (or Major) Modification” in Rule 1301.C. by adding clarifing language that these modifications include all modifications under 40 CFR Part 60.

Issue n. Reporting of an Emergency: In order to obtain an affirmative defense in an emergency, Santa Barbara required in Rule 1303.F.d., among other things, that the permittee submit a description of the emergency within 4 days of the emergency. Santa Barbara had to revise 1303.F.d. to require submittal of notice of emergency to the permitting authority within 2 working days of the time when emission limitations were exceeded due to the emergency, to be consistent with § 70.6(g)(3)(iv) and in order to maintain the affirmative defense of emergency.

District response to issue n. The District revised Rule 1303.F.4. to require the permittee to submit a description of the emergency and all mitigating and corrective actions taken to the District within two (2) working days of the emergency.

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

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

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

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

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

In addition to addressing interim approval deficiencies, the District has also adopted additional changes to its operating permit program. EPA has reviewed these changes and has determined that they are approvable. We have listed these other changes below.

The District revised the definitions of “Part 70 Source” and “Major Source of Regulated Air Pollutants (excluding Hazardous Air Pollutants)” to reflect the redesignation of attainment status.

The District revised its rules to allow for permit terms of less than five years.

Today, we are proposing to fully approve the District's revised operating permit program (Rules 1301, 1303, 1304 and 370). We have determined that the revisions made by the District removes the deficiencies identified by us in 1995. In addition, the District has made other changes to its operating permit program that are unrelated to the changes made to correct interim approval deficiencies. EPA is also proposing to approve these changes. We will make our final decision on our proposal after considering public comments submitted during the 30-day period from this publication date.

EPA requests comments on the program revisions discussed in this proposed action. Copies of the California submittals and other supporting documentation used in developing the proposed full approval are contained in docket files maintained at the EPA Region 9 office. The docket is an organized and complete file of all the information submitted to, or otherwise considered by, EPA in the development of this proposed full approval. The primary purposes of the docket are: (1) To allow interested parties a means to identify and locate documents so that they can effectively participate in the approval process, and (2) to serve as the record in case of judicial review. EPA will consider any comments received in writing by November 19, 2001.

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

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

Throughout this document, “we,” “us” and “our” refer to EPA.

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides ( NO X ), or particulate matter (PM 10 ); those that emit 10 tons per year or more of any single hazardous air pollutant (HAP) listed under the CAA; or those that emit 25 tons per year or more of a combination of HAPs. In areas that are not meeting the National Ambient Air Quality Standards (NAAQS) for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the non-attainment classification.

San Luis Obispo County is classified as an attainment area for all NAAQS.

Where an operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval contingent on the State revising its program to correct any deficiencies. Because the District's operating permit program substantially, but not fully, met the requirements of part 70, EPA granted interim approval to the District's program on November 1, 1995 (60 FR 55460).

This Federal Register notice describes the changes that the District has made to its Rule 216 (District's Operating Permit Program) since interim approval was granted. The District also revised its Rule 201 (Equipment Not Requiring a Permit) to correct one of the deficiency issues. Our notice also describes the change to this rule.

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

EPA received a letter from one organization who commented on what they believe to be deficiencies with respect to Title V programs in California. We are not taking any actions on those comments in today's action and will respond to them by December 1, 2001. As stated in the Federal Register notice published on December 11, 2000, (65 FR 77376) EPA will respond by December 1, 2001 to timely public comments on programs that have obtained interim approval; and EPA will respond by April 1, 2002 to timely comments on fully approved programs. We will publish a notice of deficiency (NOD) when we determine that a deficiency exists, or we will notify the commenter in writing to explain our reasons for not making a finding of deficiency. A NOD will not necessarily be limited to deficiencies identified by citizens and may include any deficiencies that we have identified through our program oversight.

As discussed above, EPA granted final interim approval on November 1, 1995 (60 FR 55460) to the San Luis Obispo County Air Pollution Control District's (“District”) Title V program. As stipulated in that rulemakings, full approval of the District operating permit program was made contingent upon satisfaction of certain conditions. In response to EPA's interim approval action, the District made major revisions to its Rule 216 (Operating Permit Program), and some revisions to its Rule 201 (Equipment not Requiring a Permit) to remove the deficiencies identified by EPA. The District made its revised rule available to public review and comment, and held a hearing on its proposed action on March 28, 2001. After adoption on March 28, 2001, these revised rules were submitted to EPA via the California Air Resources Board (CARB) on May 18, 2001. We have included below a discussion of each interim approval deficiency issue (as enumerated and explained in our 1995 proposed and final actions on the District's operating permits program (see 60 FR 45685 and 60 FR 55460)), our conditions for correction, followed by a summary of how the District has corrected the deficiency. The Technical Support Document (TSD) for this action includes the District's submittal and details on the revisions made.

Issue 1. In our 1995 action, we identified two problematic items related to dealing with insignificant activities in the District's Operating Permits Program. These identified items were in the District's Rule 201 (Equipment not Requiring a Permit). The District was required to remove any activities from the District's list of insignificant activities that are subject to a unit-specific applicable requirement. (Reference 40 CFR 70.4(b)(2) and 70.5(c)).

District's Response to Issue 1. The District corrected this deficiency by amending its Rule 201.M to require a permit for any comfort air conditioning and refrigerant unit that contains more than 50 pounds of refrigerant. The District also added a new section to Rule 201.A about agricultural equipment. The revised rule now states that a Federal Title V Permit shall always be required for any source that is subject to District Rule 216, Federal Part 70 Permits, including agricultural sources as allowed for in the California Health and Safety Code. With this addition, the District will not need to revise its operating permit rule should California law change on exempting agricultural equipment.

Issue 2. The District was required to revise the definitions of “Minor Part 70 Permit Modification” in Rule 216 C.13, to ensure that significant changes to existing monitoring permit terms or conditions, rather than just relaxations of existing monitoring terms, are processed as significant permit modifications. (Reference: 40 CFR 70.7(e)(4)).

District's Response to Issue 2. The District revised Rule 216.C.15.d. to state that minor modifications do not involve any significant change to any existing federally-enforceable monitoring term or condition or involve any relaxation of reporting or recordkeeping requirements in the Part 70 Permit.

Issue 3. The District was required to revise Rule 216 J.1.b. to include notice “by other means if necessary to assure adequate notice to the affected public.”(Reference 40 CFR 70.7(h)(1)).

District's Response to Issue 3. The District added 216.J.1.b.3 to address EPA's concerns. The revised rule now requires that any notice of a preliminary decision shall be provided by other means if necessary to assure adequate notice to the affected public.

Issue 4. San Luis Obispo County was required revise Rule 216 H.1.a.4. and L.1.e. to further limit the types of significant permit modifications that may be operated prior to receiving a final part 70 permit revision to only those modifications that are subject to section 112(g) or required to have a permit under Title I, parts C and D of the CAA and that are not otherwise prohibited by an existing part 70 permit. (Reference 40 CFR 70.5(a)(1)(ii)).

District's Response to Issue 4. The District made several changes to correct the deficiency issues. Several parts of Section H of Rule 216 were revised to clarify the timing for implementing various types of modification requests. These changes are as follows.

• Significant Part 70 Permit Actions—APCO must take final action to approve the application before the source may be operated pursuant to the modification (Rule 216.H.1.a.4).

• Minor Part 70 Permit Modifications—APCO must take final action to approve the application before the source may be operated pursuant to the modification (Rule 216.H.3.a).

• Non-Federal Minor Changes—a source requesting a non-federal minor change to its Part 70 Permit must submit an application for a modified Part 70 Permit to the District, with a copy to the EPA (Rule 216.H.4.a).

In addition Section L was revised as follows:

• Rule 216.L requires that when a complete application to modify a Part 70 Permit has been submitted, the stationary source must be operated in compliance with all applicable conditions on its Part 70 Permit, except as allowed under “Administrative Part 70 Permit Amendment”, and all applicable conditions on an Authority to Construct for the modification issued pursuant to Rule 202 (Permits), and Rule 218 (Federal Requirements for Hazardous Air Pollutants), until the Part 70 Permit is revised or the modification is denied.

• Section 216.L.1.e. clarifies the requirements by stating that the protection granted by Subsections L.1.a through c for a significant Part 70 Permit modification shall not be applicable where a federally-enforceable condition of an existing Part 70 Permit would prohibit the modification of a source corresponding to the significant Part 70 Permit modification. In this case, the source shall obtain such modification to the source's Part 70 Permit prior to commencing operation of the modified portion of the source.

Issue 5. The District was required to revise Rule 216 to establish a binding requirement that the Part 70 Permit Format will be included in all part 70 permits or revise Rule 216 to fully address all part 70 permit content requirements within the Rule. (Reference 40 CFR 70.6).

District's Response to Issue 5. The District significantly revised its Rule 216.F to ensure that each Part 70 Permit conforms to an EPA approved format and includes EPA's required elements. The revised Rule 216.F now requires more specific information instead of referencing to an approved format. For example it requires that Part 70 permit include the following elements:

• Monitoring requirements that assure use of terms, test methods, units, averaging periods, and other statistical conventions consistent with the applicable requirement.

• Requirements concerning the use, maintenance, and, where appropriate, installation of monitoring equipment or methods.

• Detailed records of required monitoring information.

Other revisions to Rule 216.F include:

• A new provision stating that no permit revision shall be required, under any approved economic incentives, marketable permits, emissions trading and other similar programs or processes for changes that are provided for in the permit.

• Specifying “prompt” reporting requirements as a verbal report as soon as reasonably possible, but in any case within four (4) hours after the deviation's detection, followed by a written report within 10 calendar days of having corrected the deviation.

• Clarify requirements for inspection and entry to facilities.

In addition the District revised its Rule 216.G to:

• Require applicants to include EPA in their notification when they are permitted to operate under an emissions cap that allows them to trade emissions within the emissions cap with 30 calendar days written notification. If the District objects to the emissions trade, the source, the District, and the EPA shall attach each such notice to their copy of the relevant permit.

• Include EPA in notification requirements under operational flexibility.

Issue 6. The District was required to revise Rule 216 to define and provide for giving notice to and responding to comments from affected States. Alternatively, San Luis Obispo could have made a commitment to: (1) Initiate rule revisions upon being notified by EPA of an application by a tribe for State status, and (2) provide affected State notice to tribes upon their filing for State status (i.e., prior to revising Rule 216 to incorporate affected State notice procedures). (Reference 40 CFR 70.2, 70.7(e)(2)(iii), and 70.8(b)).

District's Response to Issue 6. The District revised Rule 216.C.3 to define “Affected State” as:

(a) Whose air quality may be affected by the issuance, modification, or re-issuance of a Part 70 permit and that is contiguous to the State of California; or

(b) That is within 50 miles of the permitted source.

The District also revised Rule Section 2 of 216.J.2.b (Minor Part 70 Permit Modifications) and 216.J.2.c (Significant Part 70 Permit Actions) to provide that the APCO shall provide, to the EPA and any affected State, written notification of any refusal by the District to accept all recommendations that an “affected” State submitted for the Part 70 permit. The notice shall include the District's reasons for not accepting such recommendations.

Issue 7. The District was required to revise the rule to limit the exemption in Rule 216 D.4 for solid waste incineration units required to obtain a permit pursuant to section 3005 of the Solid Waste Disposal Act to those units that are not a major source. Section 70.3(b) states that all major sources, affected sources (acid rain sources), and solid waste incinerators regulated pursuant to section 129(e) of the CAA may not be exempted from Title V permitting. Although section 129(g)(1) of the CAA exempts solid waste incineration units subject to section 3005 of the Solid Waste Disposal Act from regulation under section 129, these units are still subject to Title V and part 70 if they are also major sources. (Reference: 40 CFR 70.3(a)(1)).

District's Response to Issue 7. The District deleted its Rule 216.D.4, therefore removing any exemptions from permitting of solid waste incineration units subject to Section 3005 of the Solid Waste Disposal Act.

Issue 8. San Luis Obispo County was required to revise Rule 216 H.4. to require that the permittee keep records describing non-federal minor changes (e.g., off-permit changes) and the emissions resulting from these changes. (Reference: 40 CFR 70.4(b)(14)(iv)).

District's Response to Issue 8. The District responded that while the District's original program submittal envisioned allowing off-permit non-federal minor changes, such actions were not allowed under the actual program that was implemented. In fact, any source subject to an applicable requirement in the District must first notify the District. For example, the District Rule 202 requires that an application be filed and approved before a non-federal minor change can be made, and failing to do so is a misdemeanor under California law and subject to fines and penalties. In sum, the District does not and will not allow off-permit changes. We agree with the District that the issue is moot because the District's revised Rule 216 has now clarified its procedure for various types of permit modification requests. In correcting our deficiency issue 4, the District has also responded to issue 8 and addressed our concerns resulting from the description of off-permit changes in the original program submittal.

Issue 9. One of EPA's conditions for full title V program approval was the California Legislature's revision of the Health and Safety Code to eliminate the provision that exempts “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals' from the requirement to obtain a permit. See California Health and Safety Code section 42310(e). Even though the local Districts have, in many cases, removed the title V exemption for agricultural sources from their own rules, the Health and Safety Code has not been revised to eliminate this provision.

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

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

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

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

In addition to the changes necessary to correct interim approval issues, the District made two other changes to its rule that we propose to approve as part of today's action. First, the District expanded Section A of its Rule 216 to allow the District's program to be suspended during any time period in which a 40 CFR Part 71 operating permit program is being administered. The two exceptions to this are when EPA objects to a permit or when EPA and the District agree, via a delegation agreement, to not suspend all or part of the District's rules. In the latter case, the delegation agreement would describe the terms, conditions and scope of the District's authority for implementing Part 71. This is approvable because it clarifies how the District's program will be administered during time periods where Part 71 is in place.

Second, the District added a statement to its definition of potential to emit (“PTE”) at Rule 216.C.18 to state that limiting conditions must be legally and practicably enforceable by EPA and citizens or by the District. The last paragraph of Rule 216.C.18 (previously Rule 216.C.6) now reads as follows:

We propose to approve this revision because even though the new definition is not consistent with Part 70, it is consistent with the new meaning of potential to emit at 40 CFR § 70.2 as established by a 1996 court decision. In Clean Air Implementation Project v. EPA , No. 96-1224 (D.C. Cir. June 28, 1996), the court remanded and vacated the requirement for federal enforceability for potential to emit limits under part 70. Therefore, even though part 70 has not been revised, it should be read to mean, “federally enforceable or legally and practicably enforceable by a state or local air pollution control agency.” 1

EPA has issued several guidance memoranda that discuss how the court rulings affect the definition of potential to emit under CAA § 112, New Source Review (NSR) and Prevention of Significant Deterioration (PSD) programs, and title V. 2 In particular, the memoranda reiterate the Agency's earlier requirements for practicable enforceability for purposes of effectively limiting a source's potential to emit. 3 For example, practicable enforceability for a source-specific permit means that the permit's provisions must, at a minimum: (1) Be technically accurate and identify which portions of the source are subject to the limitation; (2) specify the time period for the limitation (hourly, daily, monthly, and annual limits such as rolling annual limits); (3) be independently enforceable and describe the method to determine compliance including appropriate monitoring, recordkeeping and reporting; (4) be permanent; and (5) include a legal obligation to comply with the limit. EPA will rely on San Luis Obispo County implementing this new definition in a manner that is consistent with the court's decisions and EPA policies. In addition, EPA wants to be certain that absent federal and citizen's enforceability, San Luis Obispo County's enforcement program still provides sufficient incentive for sources to comply with permit limits. This proposed rulemaking serves as notice to San Luis Obispo County about our expectations for ensuring the permit limits they impose are enforceable as a practical matter (i.e., practicably enforceable) and that its enforcement program will still provide sufficient compliance incentive. In the future, if San Luis Obispo County does not implement the new definition consistent with our guidance, and/or has not established a sufficient compliance incentive absent Federal and citizen's enforceability, EPA could find that the District has failed to administer or enforce its program and may take action to notify the District of such a finding as authorized by 40 CFR 70.10(b)(1).

We have determined that the District has addressed our specific concerns identified as interim approval issues. Therefore, we are now proposing to fully approve the District's Operating Permit Program. We are also proposing to approve two additional changes that were made beyond those necessary to correct interim approval issues.

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

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

In reviewing State operating permit programs submitted pursuant to Title V of the Clean Air Act, EPA will approve State programs provided that they meet the requirements of the Clean Air Act and EPA's regulations codified at 40 CFR part 70. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a State operating permit program for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews an operating permit program, to use VCS in place of a State program that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer.

This section provides additional information by addressing the following questions:

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides (NO X ), or particulate matter (PM 10 ); those that emit 10 tons per year of any single hazardous air pollutant (specifically listed under the CAA); or those that emit 25 tons per year or more of a combination of hazardous air pollutants (HAPs). In areas that are not meeting the National Ambient Air Quality Standards for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification. For example, in ozone nonattainment areas classified as “severe,” major sources include those with the potential of emitting 25 tons per year or more of volatile organic compounds or nitrogen oxides. Part of Mojave is located in an area designated as severe nonattainment for ozone. Hence, the potential to emit threshold for major sources in that area is 25 tons per year or more of volatile organic compounds or nitrogen oxides.

Where an operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval contingent on the state revising its program to correct the deficiencies. Because the Mojave operating permit program substantially, but not fully, met the requirements of part 70, EPA granted interim approval to its program in a rulemaking published on February 5, 1996 (61 FR 4217). The interim approval rulemaking incorporated by reference the conditions described in the July 3, 1995 (60 FR 34488) proposed rulemaking for interim approval that had to be met in order for the Mojave program to receive full approval. On June 4, 2001, the California Air Resources Board, on behalf of Mojave, submitted the District's revised operating permit program that contains the needed changes for full approval identified in the interim approval rulemaking. This document describes these changes.

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

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

As stipulated in the February 5, 1996 (61 FR 4217) rulemaking, full approval of the Mojave operating permit program was made contingent upon satisfaction of the following conditions:

(1) Mojave must revise Rule 1203(G)(3)(g), which prohibits the permit shield from applying to administrative permit amendments and significant permit modifications, to include a reference to minor permit modifications as well. In accordance with 40 CFR 70.7(e)(2)(vi), the permit shield cannot apply to minor permit modifications, and the rule must state this clearly.

The District revised Rule 1203(G)(3)(g) to prohibit the permit shield from applying to minor permit modifications as well.

(2) Mojave must add a provision for sending the final permit to EPA, in accordance with 40 CFR 70.8(a)(1). Mojave's Rule 1203(B)(1)(c) only provides for sending the proposed permit to EPA.

The District added provision 1203(B)(1)(e) to specifically require that the final permit be provided to EPA.

(3) Mojave must adopt Rule 1210 (Acid Rain Provisions of Federal Operating Permits), in accordance with 40 CFR 70.4(b)(11)(iv).

The District adopted Rule 1210 on June 28, 1995.

(4) Mojave must amend Rule 1206(A)(1)(a)(i), which provides that no reopening is required if the effective date of the additional applicable requirement is later than the date on which the permit is due to expire. However, if the original permit or any of its terms and conditions are extended pursuant to 40 CFR 70.4(b)(10), the permit must be reopened to include a new applicable requirement, and a statement must be made to this effect in Mojave's rule, in accordance with 40 CFR. 70.7(f)(1)(i).

The District added a provision Rule 1206(A)(1)(a)(i) to require the permit to be reopened if a new applicable requirement's effective date falls during an extension of a Title V permit's expiration date pursuant to Rule 1202(E)(2).

(5) Mojave must clarify in Rule 1203(G)(3)(b) that the permit shield shall not limit liability for violations which occurred prior to or at the time of the issuance of the federal operating permit. This is so that violations which are continuing at the time of permit issuance will not be shielded from potential enforcement action, in accordance with 40 CFR 70.6(f)(3)(ii).

The District modified Rule 1203(G)(3)(b) to clarify that the permit shield would not limit liability for violations which occurred prior to or which were ongoing at the time of the issuance of the Federal Operating Permit.

(6) In accordance with 40 CFR 70.5(c), Mojave must provide a demonstration that activities that are exempt from part 70 permitting are truly insignificant and are not likely to be subject to an applicable requirement. Alternatively, Mojave may restrict the exemptions (including any director's discretion provisions) to activities that are not likely to be subject to an applicable requirement and emit less than District-established emission levels. The District should establish separate emission levels for HAPs and for other regulated pollutants and demonstrate that these emission levels are insignificant compared to the level of emissions from and type of units that are required to be permitted or subject to applicable requirements.

Instead of demonstrating that each activity on Mojave's insignificant activity list is truly insignificant, the District elected to establish significant source emissions level cut-offs below which activities would presumably be insignificant. To implement this, the District amended Rule 219(D)(1)(a) to lower the cut-off threshold from five to two tons per year of any regulated air pollutant or 10% of the applicable threshold for determination of a major facility, whichever is less. For a Hazardous Air Pollutant (HAP), the cut-off threshold is any de minimis level promulgated pursuant to CAA section 112(g), any significance level defined in 40 CFR 52.21(b)(23)(i), or 0.5 ton per year of any such HAP, whichever is less.

(7) Mojave must add the word “and” at the end of sections (b) and (c) in Rule 219(B)(2), in order to clarify that the four gatekeepers must all apply in order for equipment to be exempt from getting a federal operating permit, in accordance with 40 CFR 70.5(c).

The District made the required change to Rule 219(B)(2).

(8) Mojave must add to Rule 1203(D)(1)(e)(i) a reference to the requirement for the clear identification of all deviations with respect to reporting, in accordance with 40 CFR 70.6(a)(3)(iii)(A).

The District modified Rule 1203(D)(1)(e) to require the identification of all instances of deviations in monitoring reports.

(9) Mojave must add to Rule 1203(D)(1)(e)(ii) a reference to the requirement to specify the probable cause and corrective actions or preventive measures taken with regard to reporting a deviation, in accordance with 40 CFR 70.6(a)(3)(iii)(B).

The District modified Rule 1203(D)(1)(e)(ii) to require prompt and adequate reporting pursuant to requirements in Rule 430, which specify that cause and corrective actions must be identified in reporting deviations .

(10) In addition to the District-specific issues arising from Mojave's program submittal and locally adopted regulations, California state law currently exempts agricultural production sources from permit requirements. In order for this program to receive full approval (and avoid a disapproval upon the expiration of this interim approval), the California Legislature must revise the Health and Safety Code to eliminate the exemption of agricultural production sources from the requirement to obtain a permit.

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

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

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

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

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

The EPA proposes full approval of the operating permits program submitted by Mojave based on the revisions submitted on June 4, 2001, which satisfactorily address the program deficiencies identified in EPA's February 5, 1996 Interim Approval Rulemaking. See 61 FR 4217.

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

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

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

This section provides additional information by addressing the following questions:

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides ( NO X ), or particulate matter (PM 10 ); those that emit 10 tons per year of any single hazardous air pollutant (specifically listed under the CAA); or those that emit 25 tons per year or more of a combination of hazardous air pollutants (HAPs). In areas that are not meeting the National Ambient Air Quality Standards for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification. For example, in ozone nonattainment areas classified as “severe,” major sources include those with the potential of emitting 25 tons per year or more of volatile organic compounds or nitrogen oxides. EPA has classified the Sacramento Metropolitan Area as a severe nonattainment area for ozone (40 CFR 81.305).

The California Air Resources Board submitted an administratively complete permitting program on behalf of the District on August 1, 1994. Because the District's operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval of the program, and conditioned full approval on the District revising its program to correct the deficiencies. Thus, EPA granted interim approval to the District's program in a rulemaking published on August 4, 1995 (60 FR 39862). The interim approval notice described the program deficiencies and revisions that had to be made in order for the District program to receive full approval. Since that time, the District has revised and the California Air Resources Board, on behalf of the District, has submitted a revision to the District's operating permit program by letter dated June 1, 2001. This Federal Register document describes the changes that have been made to the Sacramento operating permit program as submitted on June 1, 2001, and the basis for EPA proposing full approval of the program.

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

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

As discussed in the August 4, 1995 (60 FR 39862) rulemaking, full approval of the Sacramento operating permit program was made contingent upon satisfaction of the following conditions:

Issue (1): One of EPA's conditions for full title V program approval was the California Legislature's revision of the Health and Safety Code to eliminate the provision that exempts “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals” from the requirement to obtain a permit. See California Health and Safety Code section 42310(e). Even though the local Districts have, in many cases, removed the title V exemption for agricultural sources from their own rules, the Health and Safety Code has not been revised to eliminate this provision.

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

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

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

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

Issue (2): The District was required to revise its insignificant activities permit exemption list or submit information or criteria justifying these exemptions. (40 CFR 70.5(c)).

Rule or Program Change: The District corrected this deficiency by revising its List and Criteria to incorporate the insignificant activities developed by the EPA-ARB-CAPCOA Insignificant Activities Workgroup. The District included justifications for each of the identified activities. The District also revised the List and Criteria in order to clarify that insignificant emission units are not exempt from Title V.

Issue (3): The District's limits on operational flexibility were not as explicitly restrictive as the limits contained in 40 CFR 70.4(b)(12) concerning Title I modifications.

Rule or Program Change: The District corrected this deficiency by revising Rule 207, section 308.3.b., to not allow owners and operators to make operational changes that are significant Title V permit or Title I modifications.

Issue (4): The District was required to change its rule to adopt appropriate permit issuance deadlines for sources that were initially deferred from the program due to their actual emissions but did not obtain federally enforceable limits on their potential to emit.

Rule or Program Change: The District corrected this deficiency by revising Rule 207, section 301.1, to require owners and operators of stationary sources with a potential to emit at or above major source trigger levels but with actual emissions below levels stated in section 301 to submit complete Title V permit applications by no later than June 30, 2001.

Issue (5): The District was required to add emissions trading provisions to the rule consistent with 40 CFR 70.6(a)(10). The permit content section of the rule must allow provisions for trading within the facility where an applicable requirement provides for trading increases and decreases without case-by-case approval.

Rule or Program Change: The District did not make any rule changes to address this deficiency. However, the District believes that Rule 207 contains the necessary language to ensure permits will include terms and conditions to allow emissions trading without case-by-case approval if allowed by an applicable requirement. EPA now agrees that Rule 207 contains language consistent with 40 CFR 70.6(a)(10). See Rule 207, section 308.

Issue (6): The District rule was to explicitly require that the permit include fugitive emissions in the same manner as stack emissions (40 CFR 70.3(d)).

Rule or Program Change: The District corrected this deficiency by revising Rule 207, section 305.1, to require that fugitive emissions shall be included in the Title V permit in the same manner as stack emissions. The District also revised its List and Criteria to require sources to characterize fugitive emissions in the Title V permit application.

Issue (7): The District rule was required to state that the District will provide public notice by means other than newspaper notice and a mailing list when necessary to ensure that adequate notice is given (40 CFR 70.7(h)).

Rule or Program Change: The District corrected this deficiency by revising Rule 207, section 403.1, to match the language in 40 CFR 70.7(h). The rule now requires for public notice that notice also be given by other means such as the District Website, community groups, and public meetings when necessary to ensure that adequate notice is given.

Sacramento has corrected the deficiencies cited in the interim approval on August 4, 1995 (60 FR 39862), and EPA proposes full approval the Sacramento operating permit program Rule 207. Sacramento made two additional changes to Rule 207 that were not necessary to correct interim approval issues. EPA is acting to approve a rule change concerning potential to emit and is not acting on a rule change concerning the effective date of the rule.

EPA proposes to approve a revision to the Rule 207, Section 226, definition of “potential to emit.” The District revised the definition of potential to emit to state that limitations on the physical or operational design capacity, including emissions control devices and limitations on hours of operation, may be considered only if such limitations are federally enforceable or legally and practicably enforceable by the District (emphasis added). This change is consistent with litigation affecting EPA's consideration of the potential to emit issue. In Clean Air Implementation Project v. EPA, No. 96-1224 (D.C. Cir. June 28, 1996), the court remanded and vacated the requirement for federal enforceability for potential to emit limits under part 70. Even though part 70 has not been revised it should be read to mean, “federally enforceable or legally and practicably enforceable by a state or local air pollution control agency.”  1

EPA proposes to approve this revision because Sacramento's rule is consistent with the current meaning of potential to emit at 40 CFR 70.2. EPA has issued several guidance memoranda that discuss how the court rulings affect the definition of potential to emit under CAA section 112, New Source Review (NSR) and Prevention of Significant Deterioration (PSD) programs, and title V. 2 In particular, the memoranda reiterate the Agency's earlier requirements for practicable enforceability for purposes of effectively limiting a source's potential to emit. 3 For example, practicable enforceability for a source-specific permit means that the permit's provisions must, at a minimum: (1) Be technically accurate and identify which portions of the source are subject to the limitation; (2) specify the time period for the limitation (hourly, daily, monthly, and annual limits such as rolling annual limits); (3) be independently enforceable and describe the method to determine compliance including appropriate monitoring, recordkeeping and reporting; (4) be permanent; and (5) include a legal obligation to comply with the limit.

EPA will rely on Sacramento implementing this new definition in a manner that is consistent with the court's decisions and EPA policies. In addition, EPA wants to be certain that absent federal and citizen's enforceability, Sacramento's enforcement program still provides sufficient incentive for sources to comply with permit limits. This proposal provides notice to Sacramento on our expectations for ensuring the permit limits they impose are enforceable as a practical matter (i.e., practicably enforceable) and that its enforcement program will still provide sufficient compliance incentive. In the future, if Sacramento does not implement the new definition consistent with our guidance, and/or has not established a sufficient compliance incentive absent Federal and citizen's enforceability, EPA could find that the District has failed to administer or enforce its program and may take action to notify the District of such a finding as authorized by 40 CFR 70.10(b)(1).

Sacramento deleted the effective date provision of Rule 207 which stated that the rule becomes effective on the date it is approved by EPA. EPA is currently evaluating the approvability of this change to Rule 207. Because EPA has not yet determined whether this change is approvable under the requirements of 40 CFR part 70, and since this change was not required by EPA for Sacramento to receive full program approval, EPA is taking no action on this change at this time.

EPA requests comments on the program revisions discussed in this proposed action. Copies of the Sacramento submittal and other supporting documentation used in developing the proposed full approval are contained in docket files maintained at the EPA Region IX office. The docket is an organized and complete file of all the information submitted to, or otherwise considered by, EPA in the development of this proposed full approval. The primary purposes of the docket are: (1) To allow interested parties a means to identify and locate documents so that they can effectively participate in the approval process, and (2) to serve as the record in case of judicial review. EPA will consider any comments received in writing by November 19, 2001.

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

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

This section provides additional information by addressing the following questions:

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides ( NO X ), or particulate matter (PM 10 ); those that emit 10 tons per year of any single hazardous air pollutant (specifically listed under the CAA); or those that emit 25 tons per year or more of a combination of hazardous air pollutants (HAPs). In areas that are not meeting the National Ambient Air Quality Standards for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification. For example, in ozone nonattainment areas classified as “extreme,” major sources include those with the potential of emitting 10 tons per year or more of volatile organic compounds or nitrogen oxides. EPA has classified the South Coast Air Basin as an extreme nonattainment area for ozone and a serious nonattainment area for PM 10 (70 ton per year major source threshold). (See 40 CFR 81.305).

The California Air Resources Board submitted to EPA the District's title V program on December 27, 1993, except for the District permit application forms, which were submitted on March 6, 1995. On March 30, 1995, EPA deemed the District's operating permit program to be administratively complete. Because the District's operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval of the program, and conditioned full approval on the District revising its program to correct the deficiencies. Thus, EPA granted interim approval to the District's program in a rulemaking published on August 29, 1996 (61 FR 45330). The interim approval notice described the program deficiencies and revisions that had to be made in order for the District program to receive full approval. Since that time, the District has revised and the California Air Resources Board, on behalf of the District, has submitted revisions to the District's operating permit program on August 2, 2001, and October 2, 2001. This Federal Register notice describes the changes that South Coast has made to its operating permit program to correct interim approval deficiencies, and the basis for EPA proposing full approval of these changes. EPA is not taking action on other rule changes made since interim approval.

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

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

As discussed in the August 29, 1996 (61 FR 45330) rulemaking, full approval of the South Coast operating permit program was made contingent upon satisfaction of the following conditions:

Issue (1): One of EPA's conditions for full title V program approval was the California Legislature's revision of the Health and Safety Code to eliminate the provision that exempts “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals” from the requirement to obtain a permit. See California Health and Safety Code section 42310(e). Even though the local Districts have, in many cases, removed the title V exemption for agricultural sources from their own rules, the Health and Safety Code has not been revised to eliminate this provision.

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

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

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

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

Issue (2): The District was required to revise its insignificant activities permit exemption list or submit information or criteria justifying these exemptions. (40 CFR 70.5(c)).

Rule or Program Change: In 1998, the District revised its Technical Guidance Document by deleting the List of Insignificant Activities. The District now requires Title V permit applicants to list all equipment claimed as exempt from New Source Review permit requirements (per Rule 219). The District created Form 500-B, List of Exempt Equipment, for this purpose. EPA interprets this list of “exempt” equipment to apply only to New Source Review requirements. Any equipment exempt from permitting per Rule 219 is not exempt from the Title V permit program, is subject to all applicable requirements, and must be listed in the Title V permit along with all applicable requirements.

Issue (3): The District was required to revise its minor permit modification procedures to not allow significant permit modifications to be processed as minor permit modifications. (40 CFR 70.7(e)(2)(i)(3),(4), and (4)(A).)

Rule or Program Change: The District revised Rules 3000(b)(12) and 3005(c) to correct this deficiency. Rule 3005(c) now allows minor permit revision procedures to be used only for permit revisions described in Rule 3000(b)(12), and does not allow modifications which result in emission increases up to the higher “ de minimis ” emission thresholds contained in Rule 3000(b)(6) to be processed as minor permit revisions. The District made the following three revisions to correct the deficiencies specifically cited in the 1996 Federal Register document:

(1) The District added to Rule 3000(b)(12)—Minor Permit Revision—sections (viii) and (ix) that allow minor permit revisions for NSPS and NESHAP sources provided that the source “is not an installation of a new permit unit subject to an NSPS pursuant to 40 CFR part 60, or a NESHAP pursuant to 40 CFR part 61 or 63; and is not a modification or reconstruction of an existing permit unit, resulting in new or additional NSPS requirements pursuant to 40 CFR part 60, or new or additional NESHAP requirements pursuant to 40 CFR part 61 or 63;”

(2) The District revised Rule 3005(c) to refer to a minor permit revision definition consistent with 40 CFR part 70, and does not allow revisions that trigger other regulatory requirements such as New Source Review. In addition, Rule 3005(d), Group Processing Procedures for Multiple Minor Permit Revisions, only allows minor permit revisions if emissions from such changes are collectively below 5 tons per year of criteria pollutants; and

(3) District Rule 3000(b)(12)(vii) only allows minor permit revisions for any Title V permit revision that does not establish or change a permit condition that a facility has assumed to avoid an applicable requirement.

Issue (4): Initial implementation of the District program did not include all Title V sources and the District received source category limited interim approval. The District's regulation, however, included language that expanded the applicability of the program three years after the program effective date, and ensured that all Title V sources will be permitted within five years of full, partial, or interim approval by EPA of the District Title V program. Although EPA considered this “phase-in” to be an interim approval issue, no change to the regulation is required to resolve the issue.

Rule or Program Change: No rule revision was necessary to correct this deficiency, since the phase-in period ended in February 2000 and the issue is now moot. All known Title V sources have by this time submitted Title V permit applications as required by Rules 3001(b) and 3003(a)(3).

Issue (5): The District was required to amend Rule 3005(d), Group Processing Procedures for Multiple Minor Permit Revisions, to delete reference to Rule 3000(b)(6), the District's higher de minimis significant permit revision levels when instructing an applicant of its responsibilities.

Rule or Program Change: To correct this deficiency, the District revised Rule 3005(c)(1), Minor Permit Revisions Applicability, to delete the reference to the higher de minimis significant permit revision levels contained in Rule 3000(b)(6). Rule 3005(d)(1) now clearly states that group processing procedures for multiple minor permit revision applications are only valid for emissions collectively below 5 tons per year. Although still referencing Rule 3000(b)(6), Rule 3005(d)(2) now has no bearing on whether applications subject to group processing provisions qualify as minor permit revisions.

Issue (6): The District was required to amend Rule 3004(a)(4)(C) to conform with part 70 language. The rule required that the permit include periodic monitoring or recordkeeping representative of the source's compliance for the terms of the permit” rather than “with the terms of the permit.” 40 CFR 70.6(a)(3)(i)(B).

Rule or Program Change: To correct this deficiency, the District revised the language of Rule 3004(a)(4)(C) from “for the term of the permit” to “with the terms of the permit.”

Issue (7): The District was required to revise Rule 3004(a)(9) to specify that any trading of emission increases and decreases allowed without changes to the permit must meet the requirements of the part 70 program. 40 CFR 70.6(a)(10)(iii).

Rule or Program Change: To correct this deficiency, the District revised Rule 3004(a)(9)(C) to state that the terms and conditions of emission trades “must meet all applicable requirements and requirements of this regulation.”

Issue (8): The District was required to amend its operating permit program to provide that a source that is granted a general permit shall be subject to enforcement action for operating without a permit if the source is later determined not to qualify for the conditions and terms of the general permit, regardless of any applicable shield provisions. 40 CFR 70.6(d)(1).

Rule or Program Change: The District added Rule 3004(e)(8) to correct this deficiency. The rule states that if the equipment that has been approved for coverage under a general permit is later determined not to qualify for the conditions and terms of the general permit, the Title V facility shall be subject to enforcement action for operating without a Title V permit.

Issue (9): The District was required to amend Rule 3002(g)(1). The rule allows an emergency to constitute an affirmative defense if properly signed, contemporaneous operating logs or other credible evidence are kept at the facility, but the rule did not require the logs or other evidence to demonstrate that conditions set out in the rule were met by the facility. 40 CFR 70.6(g)(3).

Rule or Program Change: To correct this deficiency, the District revised Rule 3002(g)(1) to require that properly signed, contemporaneous operating logs or other credible evidence that demonstrates compliance with the rule are kept at the facility.

Issue (10): The District was required to modify the definition of “renewal” in Rule 3000(b)(22) to clarify that permits will be renewed at least every 5 years, regardless of whether renewal is necessary to incorporate new regulatory requirements.

Rule or Program Change: To correct this deficiency, the District revised Rule 3000(b)(22) to reference Rule 3004(f), Permit Expiration and Renewal, which specifies that except for solid waste incineration facilities, Title V permits expire 5 years from the date of issuance unless such permits have been renewed. Rule 3004(f) further states that Title V permits for solid waste incineration facilities subject to section 129(e) of the Clean Air Act expire 12 years after issuance, but must be reviewed every 5 years. See 40 CFR 70.4(b)(3)(iii) and (iv).

Issue (11): The District was required to revise Rule 3005(g)(1), changes that violate an express permit term or condition, to not allow changes that would violate compliance certification requirements instead of compliance plan requirements. Clean Air Act Section 502(b)(10).

Rule or Program Change: To correct this deficiency, the District revised Rule 3005(i)(1)(C)(i) from “compliance plan requirements” to “compliance certification requirements.” The rule now correctly states that changes that would violate compliance certification requirements are not allowed.

Issue (12): The District was required to revise Rule 3005(g) to specify that the District and the source must attach a copy of any notice of Clean Air Act Section 502(b)(10) changes to the permit. 40 CFR 70.4(b)(12).

Rule or Program Change: To correct this deficiency, the District added Rule 3005(i)(1)(D) which states that the District and the facility have attached the written notice to their copy of the relevant permit.

Issue (13): The District was required to add provisions to Rule 3005(i) to specify the following: (1) Any change allowed under this section must meet all applicable requirements and shall not violate existing permit terms; (2) the source must provide contemporaneous notice to the District and EPA; and (3) the source must keep a record of the change. 40 CFR 70.4(b)(14).

Rule or Program Change: To correct this deficiency, the District revised Rule 3005(k), Prohibition on Changes Not Specifically Allowed by Permit, and Rule 3005(i), Operational Flexibility. Rule 3005(i)(1)(C)(i) requires a change to meet all regulatory requirements; Rule 3005(i)(1)(A) requires contemporaneous notice; and Rule 3005(i)(1)(D) requires recordkeeping in that the written notice must be attached to the relevant permit. Rule 3005(i)(1) prohibits the violation of express permit terms as required under 40 CFR 70.4(b)(14).

Issue (14): The District was required to either submit to EPA an approvable version of Rule 430, Breakdown Provisions, for inclusion into the State Implementation Plan, or revise Rule 3002(g), Emergency Provisions, by deleting the reference to Rule 430 as a requirement a source must meet to avail itself of an affirmative defense. 40 CFR 70.6(g).

Rule or Program Change: On October 2, 2001, the California Air Resources Board on behalf of the District requested to EPA that Rule 3002(g)(6), the reference to Rule 430, be withdrawn from the original Title V program and from the August 2, 2001, submittal. By removing Rule 3002(g)(6) from the federal Title V program, the District corrected this program deficiency.

South Coast has corrected the deficiencies cited in the interim approval on August 29, 1996 (61 FR 45330), and EPA proposes full approval the South Coast operating permit program. EPA is only taking action to approve program changes made by South Coast to correct interim approval deficiencies. EPA is not taking action on other program changes made since interim approval was granted, but will evaluate these additional changes and take appropriate action at a later date.

EPA requests comments on the program revisions discussed in this proposed action. Copies of the South Coast submittals and other supporting documentation used in developing the proposed full approval are contained in docket files maintained at the EPA Region IX office. The docket is an organized and complete file of all the information submitted to, or otherwise considered by, EPA in the development of this proposed full approval. The primary purposes of the docket are: (1) To allow interested parties a means to identify and locate documents so that they can effectively participate in the approval process, and (2) to serve as the record in case of judicial review. EPA will consider any comments received in writing by November 19, 2001.

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

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

Throughout this document, “we,” “us” and “our” refer to EPA.

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides ( NO X ), or particulate matter (PM 10 ); those that emit 10 tons per year or more of any single hazardous air pollutant (HAP) listed under the CAA; or those that emit 25 tons per year or more of a combination of HAPs. In areas that are not meeting the National Ambient Air Quality Standards (NAAQS) for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the non-attainment classification.

Ventura County is classified as a severe non-attainment area for ozone. Therefore, for reactive organic compounds or nitrogen oxides, the threshold for obtaining an operating permit is 25 tons per year or more of either reactive organic compounds or nitrogen oxides. Ventura County meets the NAAQS for all other pollutants.

Where an operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval contingent on the state revising its program to correct any deficiencies. Because the District's operating permit program substantially, but not fully, met the requirements of part 70, EPA granted interim approval to the District's program on November 1, 1995.

This Federal Register document describes the changes that the District has made to its Rule 33 (District's operating permit program) since interim approval was granted.

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

EPA received a letter from one person who commented on what he believes to be deficiencies with respect to title V programs in California. We are not taking any actions on those comments in today's action and will respond to them by December 1, 2001. As stated in the Federal Register document published on December 11, 2000, (65 FR 77376) EPA will respond by December 1, 2001 to timely public comments on programs that have obtained interim approval; and EPA will respond by April 1, 2002 to timely comments on fully approved programs. We will publish a notice of deficiency (NOD) when we determine that a deficiency exists, or we will notify the commenter in writing to explain our reasons for not making a finding of deficiency. A NOD will not necessarily be limited to deficiencies identified by citizens and may include any deficiencies that we have identified through our program oversight.

As discussed above, EPA granted final interim approval on November 1, 1995 (60 FR 55460) to the District's title V program. As stipulated in that rulemaking, full approval of the District operating permit program was made contingent upon satisfaction of certain conditions. In response to EPA's interim approval action, the District revised its Rule 33 (operating permit program) to remove the deficiencies identified by EPA. The District held a workshop (November 30, 2000), made the draft revised rule available to public review and comments (March/April 2001), and adopted the revisions on April 10, 2001. The revised program was submitted to EPA on May 21, 2001. We have included below a discussion of each of the interim approval deficiency issues (as enumerated and explained in EPA's proposed action in 1994 (see 59 FR 60104)), our conditions for correction, and a summary of how the District has corrected each of these deficiency issues. The Technical Support Document (TSD) for this action includes the District's submittal and details of the revisions made.

Issue a. Insignificant activities—Rules 33.2 and 23 provide the framework for Ventura's insignificant activities provisions. For its program to be fully approvable, Ventura needed to provide a demonstration that activities classified as “insignificant” are truly insignificant and are not likely to be subject to an applicable requirement. Alternatively, the District could restrict insignificant activities to those that are not likely to be subject to an applicable requirement and emit less than District-established emission levels. The District needed to establish separate emission levels for HAPs and for other regulated pollutants and demonstrate that these emission levels are insignificant compared to the level of emissions from and type of units that are required to be permitted or subject to applicable requirements. (Reference: 40 CFR 70.4(b)(2) and 70.5(c))

District's response to issue a. The District revised its Rule 33 to add a new term under its Rule 33.1.10. The new term defines and specifies “Insignificant Activity” to address EPA's deficiency issue. The revision satisfies the part 70 requirements.

Issue b. Revision process for significant changes to monitoring terms and conditions—the definitions of “minor permit modification” and “significant part 70 permit modification” in Rule 33.1 needed to be revised to ensure that significant changes to existing monitoring permit terms or conditions are processed as significant permit modifications. (Reference: 40 CFR 70.7(e)(4)).

District's response to Issue b. The District revised its Rule 33 to address EPA's requirement. The newly adopted Rule 33.1.11.d states that the modification does not involve any significant change to any existing federally-enforceable monitoring term or condition or involve any relaxation of reporting or recordkeeping requirements in the part 70 permit.

Issue c. Operation of modifications prior to permit revision—except in the case when a federally enforceable permit condition would prohibit it, Ventura's Rule 33.9 A.1. allowed sources to make significant modifications prior to receiving a part 70 permit revision. In order to be consistent with part 70, Ventura was required to revise its rule so that the only changes that may be operated prior to receiving a part 70 permit revision are those modifications subject to section 112(g) and title I, parts C and D of the Act, and those that are not prohibited by the existing part 70 permit. Under part 70, if a proposed change does not meet these criteria, the source may not make the change until the permitting authority has revised the source's part 70 permit. (Reference 40 CFR 70.5(a)(1)(ii)).

District's response to Issue c. The District replaced the last paragraph of its Rule 33.9.A.1 with the following: “The protection granted by this subsection for a significant part 70 permit modification shall not be applicable unless the modification was subject to section 112(g), or part C or D of title I of the federal Clean Air Act and the existing part 70 permit for the stationary source does not prohibit the modification. If either of these conditions is not met, the modified portion of the stationary source shall not be operated until the modified part 70 permit is issued.”

Issue d. Public notice—VCAPCD needed to revise Rule 33.7 B. to include notice “by other means if necessary to assure adequate notice to the affected public.” (Reference: 40 CFR 70.7(h)(1)).

District's response to Issue d. The District added a new section to its Rule 33.7. This new section (33.7.B.2.g) requires the District to provide notice by other means if necessary to assure adequate notice to the affected public.

Issue e. Permit Content—Ventura's permit content requirements are found in Rules 33.3 and 33.9. At the time of interim approval, these regulatory provisions adequately addressed nearly all of the part 70 requirements. Certain elements (e.g., §§ 70.6(a)(3)(ii)(B) and 70.6(a)(6)(i)), are more fully detailed in the General Part 70 Permit conditions, which were submitted in Appendix B.2.b. of Ventura's part 70 program submittal. Ventura needed to establish a binding requirement that the General Part 70 Permit Conditions will be included in all part 70 permits. Ventura could accomplish this by modifying its regulation to reference the general conditions that were submitted and approved by EPA, or by more fully addressing the conditions within the regulation. (Reference: 40 CFR 70.6(a)).

District's response to Issue e. The District significantly revised Sections A and B of its Rule 33.3 to incorporate EPA's requirements. For example, Rule 33.3.A.3 now requires conditions that establish all applicable emissions monitoring and analysis procedures, emissions test methods or continuous monitoring equipment required under all applicable requirements, and related recordkeeping and reporting requirements. It also requires, as necessary, conditions concerning the use, maintenance, and, where appropriate, installation of monitoring equipment or methods. Further, all applicable recordkeeping and monitoring requirements must include details such as date, place and time of sampling or measurements.

Issue f. Recordkeeping requirements—VCAPCD needed to revise the permit content requirements of Rule 33.3 to provide adequate specificity with regard to the applicable recordkeeping requirements. (Reference: 40 CFR 70.6(a)(3)(C)(ii)).

District's response to Issue f. The District incorporated all of the above requirements in Rule 33.3.A.3. For example, the rule now specifies that permits incorporate all applicable data such as:

• Date, place as defined in the permit, and time of sampling or measurements;

• Date(s) analyses were performed;

• Company or entity that performed the analyses;

• Analytical techniques or methods used;

• Results of such analyses; and

• Operating conditions as existing at the time of sampling or measurements.

Support information includes all calibration and maintenance records and all original strip chart recordings for continuous monitoring instrumentation, and copies of all reports required by the part 70 permit.

Issue g. Emissions trading under applicable requirements—Ventura County needed to add emissions trading provisions consistent with § 70.6(a)(10), which requires that trading must be allowed where an applicable requirement provides for trading increases and decreases without a case-by-case approval. (Reference 40 CFR 70.6(a)(10)).

District's response to Issue g. The District included EPA's requirement in its Rule 33.3.A.6, which states that: “Applicable conditions for allowing trading under a voluntary emission cap accepted by the permittee, and for allowing trading under applicable requirements to the extent that such requirements provide for trading emissions without a case by case approval of each trade. Such conditions shall include all terms required under section A of this rule to determine compliance and shall meet all applicable requirements.”

Issue h. Compliance schedule—At the time of interim approval, Rule 33.3 B.2, which requires that a schedule of compliance be included in the permit, did not create an explicit link with Rule 33.9 B.4., which details the contents of a compliance schedule. Thus, VCAPCD needed to revise Rule 33.3's permit content requirements to ensure that all elements of the compliance schedule under § 70.5(c) are incorporated into the permit. (Reference: 40 CFR 70.6(c)(3), 70.6(c)(4)).

District's response to Issue h. The District revised its Rule 33.3 to include EPA's requirements. Rule 33.3.A.8 now requires that if the stationary source is not in compliance with any federally-enforceable requirement, it must have a schedule of compliance that is approved by the District Hearing Board, meets all requirements of Rule 33.2.A.7, and includes a condition that requires submittal of a progress report on the schedule of compliance at least semiannually.

Issue i. EPA notification of operational flexibility changes—Rule 33.5.D needed to be revised to incorporate EPA notification of changes made under the operational flexibility provisions, either by providing for it within the regulation, or by making the general permit conditions, which do specify EPA notification, required elements of each permit. (Reference 40 CFR 70.4(b)(14)(ii)).

District's response to Issue i. The District revised the first paragraph of its Rule 33.4.D to reflect EPA's requirements. The revised paragraph is as follows: “The owner or operator of any stationary source required to obtain a part 70 permit will be allowed to contravene an express part 70 permit condition with 30 days written notification to both EPA and the District unless the District objects in writing to the change within the 30 day notice period.”

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

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

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

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

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

Today, we are proposing to fully approve the District's revised Rule 33 (operating permit program). We have determined that the revisions made by the District remove the deficiencies identified by us in 1995. We will make our final decision on our proposal after considering public comments submitted during the 30-day period from this publication date.

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

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

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

This section provides additional information by addressing the following questions:

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

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides ( NO X ), or particulate matter (PM10); those that emit 10 tons per year of any single hazardous air pollutant (specifically listed under the CAA); or those that emit 25 tons per year or more of a combination of hazardous air pollutants (HAPs). In areas that are not meeting the National Ambient Air Quality Standards for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification. For example, in ozone nonattainment areas classified as “serious,” major sources include those with the potential of emitting 50 tons per year or more of volatile organic compounds or nitrogen oxides.

Where an operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval contingent on the state revising its program to correct the deficiencies. Because the MBUAPCD operating permit program substantially, but not fully, met the requirements of part 70, EPA granted interim approval to the program in a rulemaking published on October 6, 1995 (60 FR 52332). The interim approval notice described the conditions that had to be met in order for the MBUAPCD program to receive full approval. Since that time, MBUAPCD has submitted one revision of its interimly approved operating permit program, on May 9, 2001. This Federal Register document describes the changes that have been made to the MBUAPCD operating permit program since interim approval was granted.

To solicit citizens comments on the operating permit programs, on December 11, 2000, EPA published a document to announce a 90-day comment period for members of the public to identify deficiencies they perceive exist in State and local agency operating permits programs (see 65 FR 77376). The deficiencies the public claims exist could be either deficiencies in the substance of the approved program or deficiencies in how a permitting authority is implementing its program. Where EPA agrees that there is deficiency, it will publish a notice of deficiency on or before December 1, 2001, and establish a time frame for the permitting authority to take action to correct the deficiency.

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

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

As stipulated in the October 6, 1995 rulemaking, full approval of the MBUAPCD operating permit program was made contingent upon correction of deficiencies identified by EPA. MBUAPCD corrected all of these deficiencies in the revised title V program submitted to EPA on May 9, 2001. The corrections consist of the addition of new rule language, the deletion of problematic old rule language, or in one case, a commitment in the May 9, 2001 submittal to revise Rule 218 upon being notified by EPA of an application by an affected tribe for state status. The deficiencies identified by EPA when interim approval of the MBUAPCD title V program was granted, as well as the corrections made by MBUAPCD to address these deficiencies, are summarized below. The Technical Support Document (TSD) in the Docket for this rulemaking contains the full text of EPA's description of each deficiency in the 1995 rulemaking, as well as complete descriptions of how MBUAPCD corrected the deficiencies, including the revised rule language.

(1) Acid rain sources and solid waste incineration units are required to obtain a permit pursuant to section 129(e) of the Act and may not be exempted from the requirement to obtain a title V permit, in accordance with 40 CFR 70.3(b).

MBUAPCD revised Rule 218 so that it no longer exempts these types of sources from the requirement to obtain a title V permit. Under the revised rule, these sources must obtain title V permits even if they otherwise qualify for one of the exemptions listed in Rule 218.

(2) Revise the definition of “Administrative Permit Amendments.” 40 CFR 70.7(d)(1)(iii) and 40 CFR 70.7(e)(4)).

MBUAPCD revised this definition, which now states that an administrative amendment “requires more frequent monitoring or reporting requirements for the stationary source. * * *” This definition distinguishes administrative amendments from permit modifications that increase monitoring or reporting requirements, which must be processed as significant permit modifications.

(3) Revise the definition of “Federally Enforceable Requirement” to be consistent with 40 CFR 70.2.

MBUAPCD revised this definition so that instead of referring to “District prohibitory rules that are in the State Implementation Plan (SIP),” it now refers to “any standard or other requirement provided for in the State Implementation Plan (SIP) approved or promulgated by USEPA.”

(4) Revise of the definition of “Minor Permit Modification” to require that a minor permit modification may not establish or change a permit condition used to avoid a federally enforceable requirement to which the source would otherwise be subject, in accordance with 40 CFR 70.7(e)(2)(i)(A)(4).

MBUAPCD revised this definition so that a permit modification that would “establish or change any permit condition used to avoid a federally enforceable requirement to which the source would otherwise be subject” cannot be processed as a minor permit modification.

(5) Require the compliance certification within the permit application to indicate the source's compliance status with any applicable enhanced monitoring and compliance certification requirements of the Act, in accordance with 40 CFR 70.5(c)(9)(iv).

MBUAPCD revised the permit application section of Rule 218 to require that permit applications include “a description of the compliance status of each emissions unit within the stationary source with respect to federally enforceable requirements including any applicable enhanced monitoring and compliance certification requirements of the Act.”

(6) Revise the application compliance certification requirement to be consistent with 40 CFR 70.5(c)(8)(iii)(C).

MBUAPCD has modified Rule 218 by incorporating the exact language of 40 CFR 70.5(c)(8)(iii)(C).

(7) Provide a demonstration that activities that are exempt from title V permitting are truly insignificant and are not likely to be subject to an applicable requirement. Alternatively, Rule 218 may restrict the exemptions to activities that are not likely to be subject to an applicable requirement and emit less than District-established emission levels (40 CFR 70.5(c) and 40 CFR 70.4(b)(2)).

MBUAPCD added a new definition of “insignificant activity” to Rule 218 that establishes emission levels that are used to determine whether or not an activity qualifies as insignificant. The emission levels are two tons per year of any criteria pollutant, and the lesser of 1,000 pounds per year, the section 112(g) de minimis levels, or other Title I significant modification levels for Hazardous Air Pollutants and other toxics as identified in 40 CFR 52.21(b)(23)(i). EPA and the District agree that an activity that is subject to a source-specific applicable requirement does not qualify as insignificant, even if its emissions are less than the District-established emission levels.

(8) Revise Rule 218 to provide that the APCO shall also give public notice “by other means if necessary to assure adequate notice to the affected public,” in accordance with 40 CFR 70.7(h)(1).

MBUAPCD revised Rule 218, which now states that the “notification shall be published in at least one newspaper of general circulation within the District and by other means if necessary to assure adequate notice to the affected public. * * *”

(9) Revise Rule 218 to include the contents of the public notice as specified by 40 CFR 70.7(h)(2).

MBUAPCD revised Rule 218 to explicitly require that the information required by 40 CFR 70.7(h)(2) be included in each public notice of the District's intent to issue, significantly modify, or renew a permit. This section of part 70 requires that public notices identify specific information, including the affected facility, the name and address of the permittee, the activities involved in the permitting action, and name, address, and telephone number of a person whom citizens may contact for additional information.

(10) Revise Rule 218 to provide that the District shall keep a record of the commenters and of the issues raised during the public participation process so that the Administrator may fulfill her obligation to determine whether a citizen petition may be granted (40 CFR 70.7(h)(5)).

MBUAPCD added new language to Rule 218 that states that the “APCO shall keep a record of the commenters and of the issues raised during the public participation process so that the Administrator of the USEPA may fulfill their obligation to determine whether a citizen petition may be granted.”

(11) Revise Rule 218 to provide EPA with an additional 45 days to review a permit that the District proposes to issue that has been revised as a result of comments received from the public during concurrent public and EPA review of the proposed permit (40 CFR 70.8(a)(1)).

MBUAPCD added new language to Rule 218 that states that “If the permit is revised due to comments received from the public, the revised permit will be forwarded to USEPA for an additional 45-day review period.”

(12) Revise Rule 218 to define and provide for giving notice to affected states per 40 CFR 70.2 and 70.8(b). Alternatively, MBUAPCD may make a commitment to: (1) Initiate rule revisions upon being notified by EPA of an application by an affected tribe for state status, and (2) provide affected state notice to tribes upon their filing for state status (i.e., prior to Monterey's adopting affected state notice rules).

MBUAPCD addressed this deficiency by making a formal commitment in its May 9, 2001 submittal of its title V program to EPA to revise Rule 218 upon notification by EPA of an affected state within 50 miles of the District.

(13) Revise Rule 218 to require that permits shall be reopened under specific circumstances as required by 40 CFR 70.7(f).

MBUAPCD revised Rule 218 to require that permits be reopened under specific circumstances described in the Rule, which are based on the requirements in 40 CFR 70.7(f).

(14) Revise Rule 218 to provide, consistent with 40 CFR 70.7(e)(2)(iv), that the District shall take action on a minor permit modification application within 90 days of receipt of the application or 15 days after the end of the 45-day EPA review period, whichever is later.

MBUAPCD revised Rule 218 to incorporate these time frames.

(15) Revise Rule 218 to specify the possible actions that may be taken on a minor permit modification application (40 CFR 70.7(e)(2)(iv)).

MBUAPCD added new language to Rule 218 that describes four possible actions that may be taken on a minor permit modification. The possible actions include issuing the permit modification, denying the application, determining that the application must be processed according to significant modification procedures, or revising the draft permit modification and submitting it to EPA as a proposed permit modification.

(16) The California Legislature must revise state law to eliminate the exemption of agricultural production sources from the requirement to obtain a title V permit.

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

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

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

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

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

MBUAPCD adopted revisions to District Rule 218, Title V: Federal Operating Permits, on February 21, 1996, March 26, 1997, and April 18, 2001. These revisions are unrelated to the rule revisions made to address interim approval deficiencies, which are described in section A above. With two exceptions, EPA is proposing to approve the rule changes made by MBUAPCD in 1996, 1997, and 2001. The changes that we are proposing to approve are summarized below. EPA is not taking action at this time on MBUAPCD's revision of the definition of “major source” in Rule 218 and the effective date of revised Rule 218. The reader should refer to the TSD for additional information on the nature of the rule changes EPA is proposing to approve and the basis for EPA's proposed approval, as well as EPA's reasons for not taking action on the definition of “major source” and the effective date change. EPA is proposing to approve the following changes to Rule 218:

• Replace the term “reactive organic compounds” with “volatile organic compounds” (Sections 2.2.4 and 4.3.4) and refer to District Rule 101.

• Delete the definitions for “halogenated hydrocarbons” and “reactive organic compound”.

• Add a permit shield provision. (Section 4.4)

The EPA proposes full approval of the operating permits program submitted by MBUAPCD based on the revisions submitted on May 9, 2001, which satisfactorily address the program deficiencies identified in EPA's October 6, 1995 Interim Approval Rulemaking. See 60 FR 52332.

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

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

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