[Federal Register Volume 59, Number 163 (Wednesday, August 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20812]


[[Page Unknown]]

[Federal Register: August 24, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 63 and 70

[AD-FRL-5057-7]

 

Clean Air Act Proposed Interim Approval of the Operating Permits 
Program; Washoe County District Health Department, Nevada

AGENCY: Environmental Protection Agency.

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the operating permits 
program submitted by the Washoe County District Health Department 
(Washoe or District) 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 
September 23, 1994.

ADDRESSES: Comments should be addressed to Celia Bloomfield, Mail Code 
A-5-2, U.S. Environmental Protection Agency, Region IX, Air & Toxics 
Division, 75 Hawthorne Street, San Francisco, CA 94105.
    Copies of the District's submittal and other supporting information 
used in developing the proposed rule are available for inspection 
during normal business hours at the following location: U.S. 
Environmental Protection Agency, Region IX, 75 Hawthorne Street, San 
Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Celia Bloomfield (telephone 415/744-
1249), Mail Code A-5-2, U.S. Environmental Protection Agency, Region 
IX, Air & Toxics Division, 75 Hawthorne Street, San Francisco, CA 
94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    As required under title V of the Clean Air Act (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 (see 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. The EPA's 
program review occurs pursuant to section 502 of the Act and the part 
70 regulations, 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

    This document focuses on specific elements of Washoe's title V 
operating permits program submittal that must be corrected to meet the 
requirements of 40 CFR part 70. The full program submittal, the 
Technical Support Document containing a detailed analysis of the full 
program, and other relevant materials are available as part of the 
public docket.

A. Analysis of State Submission

1. Support Materials
    Washoe submitted its title V operating permits program on November 
18, 1993, and the program was found complete on January 13, 1994. 
Washoe is authorized by State law (Nevada Revised Statues (NRS) 
445.546) to develop and administer this program for the District. 
Washoe's title V submittal includes a letter from the District Health 
Officer requesting program approval and a legal opinion from the 
District Attorney stating that Washoe has adequate authority to carry 
out all aspects of the program. Washoe's program also contains a 
complete program description, District implementing and supporting 
regulations, and all other program documentation required by 
Sec. 70.4(b), elements of the initial program submission. State 
statutes were submitted separately by the Nevada Division of 
Environmental Protection. Washoe's submittal also includes a proposed 
implementation agreement defining District and EPA responsibilities and 
commitments for administering the program. EPA and Washoe will work to 
finalize this agreement prior to final approval.
2. Regulations and Program Implementation
    Washoe's District Board of Health Regulations Governing Air Quality 
Management were revised on October 20, 1993 to provide for the 
implementation of a title V operating permits program. These 
regulations substantially meet the requirements of 40 CFR part 70, 
Sec. Sec. 70.2 and 70.3 for applicability; Sec. Sec. 70.4, 70.5, and 
70.6 for permit content, including operational flexibility; Sec. 70.7 
for public participation and minor permit modifications; Sec. 70.5 for 
criteria that define insignificant activities; Sec. 70.11 for 
requirements for enforcement authority; and Sec. 70.5 for complete 
application forms. There are a few program deficiencies that are 
outlined below as interim approval issues and detailed further in the 
Technical Support Document.
    Washoe has authority under State and local law to issue a variance 
from State and local requirements. These variance provisions are 
contained in Nevada Revised Statutes 445.506, 445.511, 445.516, 445.521 
and 445.546, and by District regulations 020.0051, 020.020, 020.0251, 
020.0253, and 020.0254. These provisions allow the Hearing Board 
discretion to grant relief from compliance with District rules and 
regulations. The EPA regards these provisions as wholly external to the 
program submitted for approval under part 70, and consequently is 
proposing to take no action on these provisions of local law. In 
addition, the EPA has no authority to approve provisions of local law, 
such as the variance provisions referred to, that are inconsistent with 
the Act. The EPA does not recognize the ability of a permitting 
authority to grant relief from the duty to comply with a federally 
enforceable part 70 permit, except where such relief is granted through 
procedures allowed by part 70. A part 70 permit may be issued or 
revised (consistent with part 70 permitting procedures) to incorporate 
those terms of a variance that are consistent with applicable 
requirements. A part 70 permit may also incorporate, via part 70 permit 
issuance or modification procedures, the schedule of compliance set 
forth in a variance. However, EPA reserves the right to pursue 
enforcement of applicable requirements notwithstanding the existence of 
a compliance schedule in a permit to operate. This is consistent with 
40 CFR 70.5(c)(8)(iii)(C), which states that a schedule of compliance 
``shall be supplemental to, and shall not sanction noncompliance with, 
the applicable requirements on which it is based.'' EPA's policy on 
variances is supported by District rule 020.0254(I) that states that 
variances may not be issued from any requirement established or 
promulgated under the Act.
3. Permit Fee Demonstration
    Section 502(b)(3) of the Act requires that each permitting 
authority collect fees sufficient to cover all reasonable direct and 
indirect costs required to develop and administer its title V operating 
permits program. Each title V program submittal must contain either a 
detailed demonstration of fee adequacy or a demonstration that 
aggregate fees collected from title V sources meet or exceed $25 per 
ton per year (adjusted from 1989 by the Consumer Price Index (CPI)). 
The $25 per ton amount is presumed, for program approval, to be 
sufficient to cover all reasonable program costs and is thus referred 
to as the ``presumptive minimum,'' (Sec. 70.9(b)(2)(i)).
    Washoe has opted to make a presumptive minimum fee demonstration. 
Washoe's fee schedule is based on average pounds of pollutants emitted 
per day. Title V sources in Washoe County are charged fees of $10 per 
average pound per day, an amount determined by the District to cover 
the direct and indirect costs of the program. Because the fee schedule 
(mathematically equivalent to $54.79 per ton per year) exceeds the 
presumptive minimum, Washoe was not required to submit a detailed fee 
demonstration. As required by Sec. 70.9(b)(2)(iv), these fees will be 
increased each year by an amount equal to or greater than the Consumer 
Price Index (030.310). In addition, sources are subject to application 
review fees. Finally, Washoe has committed to provide future accounting 
demonstrations and to make revisions to its fee structure if necessary.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Title III--Washoe has demonstrated in its title V program 
submittal broad legal authority to incorporate into permits and enforce 
all applicable requirements; however, Washoe has also indicated that 
additional regulatory authority may be necessary to carry out specific 
section 112 activities. Washoe has therefore supplemented its broad 
legal authority with a commitment to ``adopt any future standards and 
regulations related to section 112 in a timely manner as they are 
promulgated by EPA,'' (Letter from David Rice, Governor's designee, 
November 10, 1993). EPA has determined that this commitment, in 
conjunction with the broad statutory authority, adequately assures 
compliance with all section 112 requirements. The EPA regards this 
commitment as an acknowledgement by Washoe of its obligation to obtain 
further regulatory authority as needed to issue permits that assure 
compliance with section 112 applicable requirements. This commitment 
does not substitute for compliance with part 70 requirements that must 
be met at the time of program approval.
    EPA is interpreting the above legal authority and commitment to 
mean that Washoe is able to carry out all section 112 activities. For 
further discussion, please refer to the Technical Support Document and 
the April 13, 1993 guidance memorandum titled ``Title V Program 
Approval Criteria for Section 112 Activities,'' signed by John Seitz.
    b. Title IV--Washoe has committed in a letter from David Rice 
(dated February 9, 1994) to obtain by January 1, 1995 the necessary 
regulatory authority to administer an acid rain program and to make 
regulatory revisions as necessary to accommodate Federal revisions and 
additions.

B. Options for Approval/Disapproval and Implications

1. Title V Operating Permits Program Under the Authority of Section 502 
of the Act
    The EPA is proposing to grant interim approval to the operating 
permits program submitted by the Nevada Division of Environmental 
Protection on behalf of the Washoe County District Health Department on 
November 18, 1993. Following interim approval, Washoe must make the 
following changes to receive full approval:
    (1) Revise insignificant activity provisions so that they comply 
with Sec. 70.5(c). Specifically, 030.905(B)(3) must state that any 
activity at a title V facility that is subject to an applicable 
requirement may not qualify as an insignificant activity. Because 
Washoe defines insignificant activities by size, both rule 
030.020(C)(4) and the application form must require the applicant to 
list all insignificant activities in enough detail to determine 
applicability and fees, and to impose any applicable requirements.
    (2) Revise 030.020 to state that each application must contain the 
following information: (a) Description of any processes and products 
associated with alternate scenarios (Sec. 70.5(c)(2)); (b) description 
of compliance monitoring devices or activities (Sec. 70.5(c)(3)(v)); 
(c) when emissions trading provisions are requested by a source, 
proposed replicable procedures and permit terms 
(Sec. 70.4(b)(12)(iii)); and (d) statement that the source will, in a 
timely manner, meet all applicable requirements that will become 
effective during the permit term (Sec. 70.5(c)(8)). EPA has also noted 
in the Technical Support Document recommended revisions to Washoe's 
permit application form so that the form will better reflect the 
information required by regulation. In addition, rule 030.020 must 
clearly require that any application form, report, or compliance 
certification submitted in the permit application include a 
certification based on information and belief formed after reasonable 
inquiry. (Sec. 70.5(d))
    (3) Add a provision to the rule that imposes a general duty on the 
permit applicant to submit supplementary facts or corrected information 
upon becoming aware of any failure to submit relevant facts or 
submittal of incorrect information. (Sec. 70.5(b))
    (4) Revise 030.930 to provide public notice ``by other means if 
necessary to assure adequate notice to the affected public.'' 
(Sec. 70.7(h)(1))
    (5) Revise 030.960(C)(8) to state that the certifications must be 
based on information and belief formed after reasonable inquiry. 
(Sec. Sec. 70.6(c)(1) and 70.5(d))
    (6) Revise 030.970(B) to state that schedules for compliance shall 
resemble and be at least as stringent as that contained in any judicial 
consent decree or administrative order. (Sec. Sec. 70.5(c)(8)(iii)(C) 
and 70.6(c)(3))
    (7) Revise 030.950(E) to ensure that all significant permit 
modifications, other than those requiring an Authority to Construct, 
may not be placed into operation until the permitting authority has 
revised the source's part 70 permit. Washoe's program currently 
provides this implementation time frame for modifications requiring an 
Authority to Construct and modifications that are prohibited by an 
existing permit; however, the time frame must be extended to the 
remaining universe of significant modifications. (Sec. 70.5(a)(1)(ii))
    The above program deficiencies must be corrected before Washoe can 
receive full program approval. EPA may propose to grant interim 
approval at this time because the program ``substantially meets'' the 
requirements of part 70 (Sec. 70.4(d)(1)). This interim approval, which 
may not be renewed, extends for a period of up to 2 years. During the 
interim approval period, the District is protected from sanctions for 
failure to have a program, and EPA is not obligated to promulgate a 
Federal permits program in the District. Permits issued under a program 
with interim approval have full standing with respect to part 70, and 
the 1-year time period for submittal of permit applications by subject 
sources begins upon EPA's final action granting interim approval, as 
does the 3-year time period for processing initial permit applications.
2. District Preconstruction Permit Program Implementing Section 112(g) 
of the Act
    As a condition of approval of the operating permits program, Washoe 
is required to implement section 112(g) of the Act from the effective 
date of the title V program. Imposition of case-by-case determinations 
of MACT or offsets under section 112(g) will require the use of a 
mechanism for establishing federally enforceable restrictions on a 
source-specific basis. The EPA is proposing to approve Washoe's 
preconstruction permitting program found in District rules 030.000 and 
030.002 under the authority of title V and part 70 solely for the 
purpose of implementing section 112(g) during the transition period 
between title V approval and adoption of a District rule implementing 
EPA's section 112(g) regulations. EPA believes this approval is 
necessary so that Washoe has a mechanism in place to establish 
federally enforceable restrictions for section 112(g) purposes from the 
date of title V approval. Although section 112(l) generally provides 
the authority for approval of state air toxics programs, title V and 
section 112(g) provide authority for this limited approval because of 
the direct linkage between implementation of section 112(g) and title 
V. The scope of this approval is narrowly limited to section 112(g), 
and does not confer or imply approval for purposes of any other 
provision under the Act. If Washoe does not wish to implement section 
112(g) through its preconstruction permit program and can demonstrate 
that an alternative means of implementing section 112(g) exists, the 
EPA may, in its final approval action approve the alternative instead.
    This approval of Washoe's preconstruction permit program as a 
section 112(g) mechanism is for an interim period only, until the 
District is able to adopt regulations consistent with regulations 
promulgated by EPA to implement section 112(g). Accordingly, EPA is 
proposing to limit the duration of this approval to a reasonable time 
following EPA's final promulgation of section 112(g) regulations so 
that Washoe, acting expeditiously, will be able to adopt regulations 
consistent with the section 112(g) regulations. The EPA is proposing 
here to limit the duration of this approval to 12 months following 
promulgation by EPA of section 112(g) regulations. Comment is solicited 
on whether 12 months is an appropriate period considering Washoe's 
procedures for adoption of regulations.
3. Program for Straight Delegation of Section 112 Standards Under the 
Authority of Section 112(l) of the Act
    Requirements for title V program approval, specified in 40 CFR 
70.4(b), encompass section 112(l)(5) requirements for approval of a 
program for delegation of section 112 standards as promulgated by EPA 
as they apply to part 70 sources. Section 112(l)(5) requires that 
Washoe'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 Washoe's 
program for receiving delegation of section 112 standards that are 
unchanged from the Federal standards as promulgated.
    Washoe has informed EPA that it intends to employ incorporation by 
reference as the mechanism for accepting straight delegation of section 
112 standards. The details of this delegation mechanism will be set 
forth in a Memorandum of Agreement between Washoe and EPA, expected to 
be completed prior to approval of Washoe's section 112(l) program for 
straight delegations. This program applies to both existing and future 
standards but is limited to sources covered by the part 70 program.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of Washoe's submittal and other information 
relied upon for the proposed interim approval are contained in a docket 
maintained at the EPA Regional Office. The docket is an organized and 
complete file of all the information submitted to, or otherwise 
considered by, EPA in the development of this proposed interim 
approval. The principal purposes of the docket are:

    (1) To allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process; and
    (2) To serve as the record in case of judicial review. The EPA will 
consider any comments received by September 23, 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. 600 et seq., EPA 
must prepare a regulatory flexibility analysisassessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603, 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.
    The EPA's actions under section 502 of the Act do not create any 
new requirements, but simply address operating permits programs 
submitted to satisfy the requirements of 40 CFR part 70. Therefore, 
because this action does not impose any new requirements, it does not 
have a significant impact on a substantial number of small entities. 
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. 7410(a)(2).
    If the interim approval is converted to a disapproval, it will not 
affect any existing District requirements applicable to small entities. 
Federal disapproval of the District's submittal does not affect its 
state enforceability. Moreover, EPA's disapproval of the submittal does 
not impose any new Federal requirements. Therefore, EPA certifies that 
conversion from interim approval to disapproval would not have a 
significant impact on a substantial number of small entities because it 
does not remove existing District requirements nor does it substitute 
any new Federal requirements.

    Authority: 42 U.S.C.7401-7671q.

    Dated: August 5, 1994.
Nora L McGee,
Acting Regional Administrator.
[FR Doc. 94-20812 Filed 8-23-94; 8:45 am]
BILLING CODE 6560-50-F