[Federal Register Volume 59, Number 142 (Tuesday, July 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18187]

[[Page Unknown]]

[Federal Register: July 26, 1994]


40 CFR Part 70



Clean Air Act Proposed Approval, Operating Permits Program; State 
of Hawaii

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed approval.


SUMMARY: The EPA proposes to grant interim approval to the Operating 
Permits Program submitted by the State of Hawaii. Alternatively, EPA 
proposes to grant full approval if specified changes are made. Hawaii's 
Operating Permit Program was submitted for the purpose of complying 
with Federal requirements that mandate that States develop, and submit 
to EPA, programs for issuing operating permits to all major stationary 
sources and to certain other sources.

DATES: Comments on this proposed action must be received in writing by 
August 25, 1994.

ADDRESSES: Comments should be addressed to the contact indicated in FOR 
FURTHER INFORMATION CONTACT, attention Docket No. HI-94-OPS-P. Copies 
of the State's submittal and other supporting information used in 
developing the proposed full/interim approval are available for 
inspection between 9 a.m. and 5 p.m. Monday through Friday at the 
following location: EPA Region IX, 75 Hawthorne Street, San Francisco, 
CA 94105. A courtesy copy of certain documents may be available for 
inspection at: Clean Air Branch, Environmental Management Division, 
State Department of Health, 919 Ala Moana Boulevard, Honolulu, Hawaii 
96814, telephone (808) 586-4200.

FOR FURTHER INFORMATION CONTACT: Ed Pike (telephone 415/744-1248), A-5-
2, United States Environmental Protection Agency, Region IX, Air and 
Toxics Division, 75 Hawthorne Street, San Francisco, CA 94105.


I. Background and Purpose

A. Introduction

    As required under title V of the Clean Air Act (``the Act'') as 
amended (1990), EPA has promulgated rules that define the minimum 
elements of an approvable State operating permits program and the 
corresponding standards and procedures by which the EPA will approve, 
oversee, and withdraw approval of State operating permits programs (57 
FR 32250 (July 21, 1992)). These rules are codified at 40 Code of 
Federal Regulations (CFR) part 70. Title V requires States to develop, 
and submit to EPA, programs for issuing these operating permits to all 
major stationary sources and to certain other sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within 1 year after receiving the submittal. EPA's program 
review occurs pursuant to section 502 of the Act, and the part 70 
regulation, which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, EPA may grant the program interim approval for 
a period of up to 2 years. If EPA has not fully approved a program by 2 
years after the November 15, 1993 date, or by the end of an interim 
program, it must establish and implement a Federal program.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials
    The Governor of Hawaii submitted an administratively complete part 
70 permitting program on December 20, 1993 for the State of Hawaii with 
a letter requesting EPA's approval. The program includes a legal 
opinion from the Attorney General of Hawaii stating that the State of 
Hawaii's Department of Health has adequate legal authority to carry out 
the program. The program also contains a description of how the 
Department of Health intends to implement the program consistent with 
the requirements of the Clean Air Act Amendments of 1990 (42 U.S.C. 
7401-7671q) and 40 CFR part 70. The program includes supporting 
documentation such as evidence of the procedurally correct adoption of 
the permitting rule, permit application forms, and a model permit. EPA 
intends to develop an implementation agreement with Hawaii, although an 
implementation agreement is not required for this proposed action.
2. Regulations and Program Implementation
    Hawaii's part 70 permitting regulation is contained in title 11, 
chapter 60.1 of the Hawaii Administrative Rules (HAR). Hawaii has 
notified EPA in a letter dated June 13, 1994 that the part 70 program 
includes the following: General Requirements--subchapter 1 (except 
subsections 6, 8, 12, 13, 15, 16, and 17); Covered Sources--subchapter 
5; Hazardous Air Pollutants--subchapter 9 (except sections 179 and 180 
on ambient concentrations and NESHAP adoption by reference); and the 
covered source fee requirements--subchapter 6, sections 111 through 
116. EPA will accept public comment on all aspects of Hawaii's 
submittal that are related to part 70 program requirements. Hawaii's 
part 70 permitting rule meets the main requirements of part 70 as 
described below:
    a. Applicability (40 CFR 70.2 and 70.3). Sources required to obtain 
a permit under Hawaii's program are defined as covered sources. 
Hawaii's definition of covered source includes all major part 70 
sources. The rule also includes non-major sources subject to a section 
112 standard, other than sources subject solely to the section 112(r) 
accidental release requirements, and any source subject to a section 
111 standard of performance adopted by the State (HAR sections 1 and 
    b. Permit content (40 CFR 70.6). Each covered source permit must 
contain emission limitations and standards to ensure compliance with 
all applicable requirements. Permits will also contain certain 
operational flexibility requirements (HAR sections 90 and 96).
    c. Public participation (40 CFR 70.7). The public will be provided 
with notice of, and an opportunity to comment on, each draft covered 
source permit, permit renewal, and significant modification (HAR 
section 99).
    d. Permit modifications (40 CFR 70.7). Sources may apply for 
expedited permit changes for minor permit modifications. Significant 
modifications must undergo all part 70 permit issuance procedures (HAR 
sections 103 and 104).
    e. EPA oversight (40 CFR 70.8). Each covered source permit, 
renewal, and minor or significant modification is subject to EPA 
oversight and veto (HAR section 95).
    f. Enforcement authority (40 CFR 70.11). The Hawaii Revised 
Statutes (HRS) directly provide for enforcement and penalties for civil 
and criminal violations of permits and rules (HRS 342B part IV). The 
regulation (HAR section 18) forbids variances from any federal 
regulation or any covered source federally enforceable permit term or 
    g. Relationship to title I preconstruction requirements. Hawaii's 
permitting program combines part 70 and Prevention of Significant 
Deterioration (title I, part C of the Act) requirements. Upon part 70 
program approval, preconstruction permits issued to new covered sources 
will include all part 70 requirements and also Hawaii's Prevention of 
Significant Deterioration requirements under 40 CFR 52.21. This part 70 
approval does not address or modify EPA's current delegation of 40 CFR 
52.21, Prevention of Significant Deterioration, to Hawaii under 40 CFR 
3. Permit Fee Demonstration
    Hawaii's fee analysis demonstrates that the state will collect 
sufficient revenue to implement the permitting program. Hawaii will 
collect permit fees of $37 per ton of regulated air pollutant as 
defined in section 114 from covered sources, which meets both the 
Sec. 70.9 presumptive minimum and Hawaii's projected resource 
requirements. State law establishes a dedicated account to ensure that 
permit program fees are used to fund the permitting program (HRS 
section 342B-32).
4. Provisions Implementing the Requirements of Other Titles of the Act
    Hawaii has demonstrated in its title V program submittal adequate 
legal authority to implement and enforce all section 112 requirements. 
This legal authority is contained in Hawaii's enabling legislation (HRS 
chapter 342B, including Sec. 12); the Attorney General's legal opinion 
that chapter 342B authorizes Hawaii to carry out all section 112 
activities; and regulatory provisions that incorporate all applicable 
requirements into each covered source permit. EPA has determined that 
this broad legal authority adequately assures compliance with all 
section 112 requirements.
    EPA is interpreting the above legal authority and Hawaii's rule to 
mean that Hawaii can, and will, carry out all section 112 activities. 
These activities include, but are not limited to, the following:
    a. Section 112 Emission standards. The rule requires that covered 
source permit terms and conditions ensure compliance with all section 
112 standards, including existing and future standards promulgated 
under sections 112 (d), (f), and (h) and the General Provisions (40 CFR 
part 63, subpart A, and HAR section 81, definition of applicable 
requirements, section 90).
    b. Case-by-case MACT determinations. The rule requires sources to 
comply with CAA sections 112(g) and 112(j) case-by-case Maximum 
Achievable Control Technology (MACT) requirements and authorizes the 
director to make such case-by-case determinations (HAR sections 174-
    c. Early reductions. The rule authorizes the director to establish 
an alternate emission limit under the CAA section 112(i)(5) early 
reductions program (40 CFR 63 subpart D) and requires compliance with 
any alternate emission limit.
    d. Accidental releases. The rule requires sources to prepare and 
submit a risk management plan, and defines the submittal of a risk 
management plan as an applicable requirement. Sources must address 
their compliance with risk management plan requirements in biannual 
certifications (HAR sections 81, 86, and 178).
    Hawaii's program does not need to include title IV acid rain 
requirements because the acid rain program applies only to the 48 
contiguous United States.

B. Options for Approval/Disapproval and Implications

1. Full Approval
    The EPA proposes to fully approve the operating permits program 
submitted to EPA for the State of Hawaii on December 20, 1993 if 
certain insignificant activities are removed or capped and the permit 
application shield is expanded. EPA intends to consider at least all 
changes submitted prior to September 15 in the final approval. EPA has 
determined that the program is otherwise adequate to meet the minimum 
elements of a State operating permits program as specified in 40 CFR 
part 70.
    EPA is proposing to approve the program if the State makes the 
changes listed below. Please refer to the Technical Support Document, 
which is included in the docket, for additional details.
    a. Insignificant activities. The rule must not allow the director 
to determine what activities are insignificant without EPA approval of 
these activities or the criteria that delineate such activities (40 CFR 
70.5(a)). Therefore, sub-section 82(f)(7) must be deleted or include 
criteria, such as emission levels, for determining which activities are 
insignificant. Section 70.5 requires that Hawaii submit a list of 
insignificant activities with criteria demonstrating that the 
activities listed are insignificant. The director's discretion clause 
is bounded by the requirement that the source submit enough information 
to determine and impose all applicable requirements. However, the rule 
does not contain the required criteria, such as the type of equipment 
or emission rate, for determining whether activities designated under 
Sec. 82(f)(7) are insignificant (40 CFR 70.4(b)(2)).
    EPA is proposing that an emissions cap of two tons per year would 
constitute an approvable criterion for ensuring that any activities 
designated under this clause would not hinder the State's ability to 
make applicability determinations and impose all applicable 
requirements and fees. Therefore, the director's discretion clause may 
be approved if it includes criteria, such as an emissions cap, that 
will ensure that any activities designated by the director are 
insignificant. For toxic or hazardous air pollutants, the threshold 
would be twenty-five percent of any title I modification threshold or 
1000 pounds per year, whichever is less. Hawaii may also choose to 
impose a more stringent cap.
    EPA is proposing that restrictions on the following insignificant 
activities are also necessary to qualify for full approval: paint spray 
booths, water pump motors, and portable fuel burning equipment. EPA 
believes that these activities could emit significant amounts of 
emissions triggering applicable requirements and these activities must 
contain an emissions cap.
    EPA is seeking comments on whether Hawaii's permit program should 
be fully approved if any of the changes to these specific activities on 
Hawaii's list of insignificant activities are not made and which (if 
any) should not preclude full approval of the program.
    b. Permit application shield. The program must expand the permit 
application shield to include existing sources that become subject to 
the program due to rulemaking changes to qualify for full approval. For 
example, a noncovered (non-part 70) source will be required to obtain a 
covered (part 70) source permit if it becomes subject to an EPA MACT 
standard under CAA section 112(d). Both part 70 and Hawaii's rule (40 
CFR 70.7(b) and HAR section 82(a)) prohibit sources from operating 
without a required operating permit. However, Hawaii's rule does not 
include the part 70 provision that newly subject sources may 
temporarily operate without a permit if they submit a timely and 
complete application (40 CFR 70.7(b)).
2. Interim Approval
    The EPA is proposing to grant interim approval to the operating 
permits program under Sec. 70.4(d) if the changes required for full 
approval as described above are not made prior to final promulgation of 
this rulemaking. EPA can grant interim approval because Hawaii's permit 
program substantially meets the approval process, and requirements of 
part 70 as discussed in section II(A) of this notice. The problems 
noted above will not prevent Hawaii from issuing permits that are 
consistent with part 70 on an interim basis. Interim approval, which 
may not be renewed, would extend for a period of two years. During the 
interim approval period, the State is protected from sanctions for 
failure to have a program, and EPA is not obligated to promulgate a 
Federal permits program in the State. Permits issued under a program 
with interim approval have full standing with respect to part 70, and 
the three year time period for processing the initial permit 
applications begins upon interim approval. Permits issued by Hawaii 
prior to EPA's full or interim approval of the program are not 
considered part 70 permits until reissued under a program that has been 
approved at the time the permit is reissued.
3. Program for Straight Delegation of Section 112 Standards
    The requirements for part 70 approval, specified in 40 CFR 70.4(b), 
encompass the section 112(l)(5) approval requirements for a program for 
delegation of section 112 standards as promulgated by EPA. Section 
112(l)(5) requires that Hawaii's program contain adequate authorities, 
adequate resources for implementation, and an expeditious compliance 
schedule, which are also requirements under part 70. Therefore, the EPA 
is also proposing to grant approval under section 112(l)(5) and 40 CFR 
63.91 of Hawaii's program for receiving delegation of section 112 
standards that are unchanged from Federal standards as promulgated. EPA 
proposes to grant 112(l) approval whether Hawaii is granted full or 
interim approval because the program contains sufficient authority to 
implement and enforce delegated section 112 standards. This delegation 
applies to both major and non-major part 70 sources subject to section 
112 standards because Hawaii's permitting program applies to all 
sources subject to section 112 standards.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
full/interim approval, particularly the changes necessary for full 
approval. Copies of the State's submittal and other information relied 
upon for the proposed alternatives of full approval and interim 
approval are contained in a docket maintained at the EPA Regional 
Office. A courtesy copy of certain technical documentation may also be 
available for inspection from the State of Hawaii. 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/
interim approval. The principal purposes of the docket are:
    (1) to allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process, and
    (2) to serve as the record in case of judicial review. The EPA will 
consider any comments received by August 25, 1994.

B. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.

C. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. section 600 et. 
seq., EPA must prepare a regulatory flexibility analysis assessing the 
impact of any proposed or final rule on small entities. 5 U.S.C. 
sections 603 and 604. Alternatively, EPA may certify that the rule will 
not have a significant impact on a substantial number of small 
entities. Small entities include small businesses, small not-for-profit 
enterprises, and government entities with jurisdiction over populations 
of less than 50,000.
    Operating permits program approvals under section 502 of the Act, 
including interim approvals under section 502(g) of the Act, do not 
create any new requirements, but simply approve requirements that the 
State is already imposing. Therefore, because the federal operating 
permits program approval does not impose any new requirements, I 
certify that it does not have a significant impact on any small 
entities affected. Moreover, due to the nature of the federal-state 
relationship under the Act, preparation of a regulatory flexibility 
analysis would constitute federal inquiry into the economic 
reasonableness of state action. The Act forbids EPA to base its actions 
concerning operating permits programs on such grounds. Union Electric 
Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C. section 
    If the program is granted an interim approval which is subsequently 
converted to a disapproval, it will not affect any existing state 
requirements applicable to small entities. Federal disapproval of the 
State submittal does not affect its state-enforceability. Moreover, 
EPA's disapproval of the submittal would not impose a new federal 
requirement. Therefore, EPA certifies that such a disapproval action 
would not have a significant impact on a substantial number of small 
entities because it does not remove existing state requirements nor 
does it substitute a new federal requirement.

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

List of Subjects in 40 CFR Part 70

    Environmental Protection Agency, Administrative practices and 
procedures, Air pollution control, Environmental protection, Hawaii, 
Intergovernmental relations, Operating permits, and Reporting and 
recordkeeping requirements.

    Dated: July 11, 1994.
Felicia Marcus,
Regional Administrator.
[FR Doc. 94-18187 Filed 7-25-94; 8:45 am]